Robert Shiller Asks: ‘Why Is The U.S. Stock Market So High?’

By Robert Shiller as published on Tuesday by The Guardian The level of stock markets differs widely across countries. And right now, the United States is leading the world. What everyone wants to know is why — and whether its stock market’s current level is justified. We can get a simple intuitive measure of the differences between countries by looking at price-earnings ratios. I have long advocated the cyclically adjusted price-earnings (CAPE) ratio that John Campbell (now at Harvard Un

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3 thoughts on “Robert Shiller Asks: ‘Why Is The U.S. Stock Market So High?’

  1. At last, a truthful admission and the data that shows the disconnect between the market and “reality.” Real growth doesn’t explain stocks or bonds. It’s not real earnings. And it’s sure as hell not the strong form efficient market hypothesis. Weak real growth in income for decades. Matching weak real growth in earnings. The market is just a happy-go-lucky Golden Retriever … la la la la .. just throw me a stick and I’ll run up the hill … It still seems to me that the best support comes from the fact that there are only three big things to do with one’s money and one of them, cash, mostly stinks.

  2. “Real growth doesn’t explain stocks or bonds. It’s not real earnings.” If we look at the potential for global economic growth on a physical/fiscal critical resource/population/market growth basis – there appears to be no such potential.

    We have already maxed out the planets ability to support more humans without massive and perhaps critical ecosystem degradation and collapse. While this degradation is a far slower moving train wreck than climate and environmental alarmist project – it is an undeniable fact with undeniable disastrous consequences.

    However, if you spend much time looking at the hard bottlenecks that limit both economic growth and human population growth (more or less the same eventually) – it turns out that climate change is just an irritant – not a bottleneck compared to others. There are two hard interactive finite critical resource bottlenecks to both economic and population growth that have no current solutions in sight – sufficient economically viable energy to supply the global energy demand and to support economically viable phosphate sourcing and processing (including making recycling economically viable) (https://www.slideshare.net/DevFutures/dana-cordell-phosphorus-scarcity) to support global food production levels for our still growing global populatoin. And that do so without creating resource wars and general global chaos.

    It’s amazing to me the number of economist that make growth projections either with no knowledge of or that don’t consider the finite resource limitation impacts on those projections. Assuming no source of near “free” energy source is found in the next 30 years – the increasing energy demands of ever dilute critical finite resource – sourcing and processing will collapse not only growth, but the human population as well. Population collapses tend to be hard on economic growth projections.

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