To address the "what happened in Japan in the 80's" question........
Irrational exuberance at its finest...
There was so much capital sloshing around in Japan in the mid to late eighties, that a common argument put forward to support the valuations, was the "weight of money" argument. So much money, chasing a finite amount of shares, would support valuations into perpetuity it was posited....... Sound familiar?
You can also imagine, that every argument under the sun about why the extreme valuations were warranted, was put forward and believed by everyone..
Well, the poor bunny's that waded in in 1987 thro 1990 ARE STILL UNDERWATER......
I'm not saying that the US is doing an 80's Japan, (naturally there a host of other issues at play here also).
But rampant market euphoria, and markets ignoring reality, and silly valuations always make me nervous, and this chart reminds me why!!
An entire other post around what the BoJ has done subsequently, is probably in order as a follow on....
It now has assets of well over 200% of GDP, ie, 7 times what the FED has done.. (it owns over 80% of all Japans's ETF's for example), and its yield curve control programme, and negative I rates, and has all that reinflated the market past the 90 high???? No not even close!
(20min delay)