Weekend Charting and Chat - 13 February 2015, page-10

Remember the 1929 Stock Market Boom? Just before the crash, economist, Irving Fisher famously stated that the market had reached "a permanently high plateau".

In 1999, just before the end of the dot.com boom, Glassman and Hassett published their famous book: Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market.

The Real Estate Bubble of 2000-2006 was fueled by a belief that real estate prices never go down.

In 2008, Oil was in a Bubble - and hit a high of 147.27 barrel on 11 July. In June, 2008, the head of the Russian giant, Gazprom, predicted Oil would go to $250 a barrel.

So what's happening now? Here's a snippet I've come across this weekend:

From the New York Times:

London — When art prices rise and rise, there’s always talk of a “bubble.” But could the 21st-century contemporary art boom be a bubble that never really bursts?

Oh,Oh.

Meanwhile - Robert Shiller, Nobel Laureate in Economics, 2013, tweeted:

My CAPE (cyclically adjusted price earnings) ratio reached 27.60 at close of market today, passing 2007 high. http://www.econ.yale.edu/~shiller/data/ie_data.xls …
9:17 AM - 14 Feb 2015

Robert Shiller is well-known for having predicted the end of the last two big booms - the dot.com boom and the American real estate boom.

Shiller is now calling the state of the American stock market, the new normal boom. (The new normalwas a term used by Bill Gross to describe the secular stagnation that he sees prevailing in America.) When Shiller talks about a "boom" - he's presenting a cautionary tale.

News stories about booms never ending are not an especially good timing device. Nor is Shiller's Cyclically Adjusted Price Earnings.

But .................... the second suggests that anybody who thinks the current state of affairs will continue indefinitely is ................................... I'll leave you to finish that sentence.

Redbacka