For a really long time now, I've been explaining (and so have other realists) that the overpricing of pretty pieces of paper (aka stocks, bonds, treasury bills, etc.) caused by the gambling games of cocaine-fueled, high-strung nitwits in high-rise brokerage offices and delusional day-traders glued to their hand-held devices has nothing to do with real production values, revenue growth, profit generation, and economy improvements.
It's shocking to me that people seriously accept the stock market "rally" of the past few months as a sign of tangible fiscal gains. The same goes for the rise in housing prices resulted from the unprecedentedly low mortgage rates artificially kept down by the US Treasury.
Don't you people understand that, just like with a terminal patient, this is a temporary remission before the downfall? You cannot take a candy wrapper that worth 1 cent and say that its price is $430 just because there is a schmuck who is willing to shell out that kind of money for it and hope that there is another idiot out there who will pay $450. Any, more or less logical, person should understand that the real value behind the candy wrapper is still 1 cent, regardless of how much money you pay for it. But apparently the general public is severely lacking common sense and logical aptitude.
You know what else they are lacking? The disposal income - the money to spend, the moolah to throw around, the dollars to buy the products of the very companies, whose stocks comprise these people's pension and college funds. If the consumer market contracts, how can companies generate revenues? How can a nation experience a recovery, when 99.9% of it is getting poorer and poorer by the minute?
This issue of the constant reduction of consumer spending is at the core of the economic disasters ahead of us. And apparently the public-stock billionaires, whose wealth is so easily added up and compiled into lists in the Forbes's offices, have already caught up with the reality - they are in high-gear disposal mode.
Please-please read this MONEYNEWS' article about Billionaires Dumping Stocks. In addition to listing the relevant verifiable facts, it also refers readers to the voice of reason - an economist with an impeccable prediction record who foresees a market adjustment as dramatic as 90%!!! And if you want a really full picture read the other articles linked below as well.