David Stockman on the Mother of All Stock Market Manias

by David Stockman

It seems that only 0.1% of the time during the last 70 years has the S&P 500 traded at a higher forward PE (price-to-earnings) multiple than it does today. That’s equal to 4 weeks out of the 3,640 weeks since 1950.

In a world faced by COVID lockdowns, staggering amounts of debt, central bank money-pumping extremes, and outright fiscal insanity in Washington, why is the present moment more propitious for the valuation of corporate earnings than during 99.9% of the time since the Korean War?

Of course, it is not. Not remotely so.

Instead, the Fed and the other central banks have led the robo-machines, day-traders, and Robinhood waifs into the most hideous stock-chasing mania in recorded history.

Here are just a few of the market extremities:

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