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It's not just that the U.S. stock market has continued to defy gravity that's so worrisome. It's the fact that stock prices continue to defy the laws of investment physics - and that the masses seem so calm about it.
When the financial markets are operating in "normal" mode, stocks are what investment pros refer to as "discounting mechanisms." That means that the prices they trade at today are based on some expected mix of future corporate earnings, economic growth in both the United States and other key world markets, and the outlook for such market-influencers as inflation, interest rates and monetary and fiscal policies.
But thanks to the easy-money policies of Team Bernanke, we all know this isn't a "normal-mode" market.
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