Reply #3: liquidity

[rapier]

Stock price inflation, particularly the most speculative areas like the dot coms are a totally different subject. The only similarity is that stocks rose on liquidty, ie money available to buy them, just like homes are.

Stock prices have nothing directly to do with the economy. Stocks rise and fall on liquidity, ie. moeny sloshing around the system to buy them.. When the credit spigot stopped in telecom in early 2001 that kicked a leg from the markets support. Liquidity is failing as we speak. I would be shocked if stocks are much higher than now for a very long time. There isn't enough liquidty, as everyone is saddled with debt.