Note to Self: The question is whether our current market values are in fact "Pangloss" values, and are going to come back to earth at some point, with the shock provided by that return to earth providing a nasty expectational shock that will cause a depression—but with that return to earth delayed long enough to plausibly reelect Trump—or whether current values are appropriate given underlying fundamentals, and are in fact about the only thing keeping us out of a depression right now...

My sense is that "we need to raise reserve requirements in a boom" is very good policy; but that "we need to pop this bubble" is almost always very bad policy.

And we do not appear to have any (large) equity bubble. The weirdness is all in bond prices:

S P 500 PE Ratio 90 Year Historical Chart MacroTrends

#notetoself #finance #macro