"Last week I was
swamped with interviews, both radio and television, to discuss the meaning of
the markets hitting new all-time highs. The general consensus of the analysts
and economists that I was pitted against was that the rise in capital markets,
given weak current economic data and a resurgence of the Eurozone crisis, is
clearly a sign of economic strength. This, combined with rising corporate
profitability, makes stocks the only investment worth having. My arguments were
much more pragmatic."
"So, while the
markets have surged to "all-time highs" - for the majority of
Americans who have little, or no, vested interest in the financial markets
their view is markedly different. While the mainstream analysts and economists
keep hoping with each passing year that this will be the year the economy comes
roaring back - the reality is that all the stimulus and financial support
available from the Fed, and the government, can't put a broken financial
transmission system back together again. Eventually, the current disconnect
between the economy and the markets will merge. My bet is that such a
convergence is not likely to be a pleasant one.
