>>>Can you actually provide a valid list of reasons as to why you don't think the Dow cannot hit 17,000 in the next 2 years<<<
See my earlier post. For starters, margin debt is at the highest level in history.
What it shows, among other things, is that the insatiable appetite for credit that has been such a critical element in the various asset bubbles in recent years (housing, private equity, hedge funds, etc., etc.), hugely aided and abetted by the open-spigot policy of the Federal Reserve, has been a powerful reason for the great revival in the stock market.
As Alan notes, the combined debit balances of the Big Board and Nasdaq have reached a record high of $303.29 billion. That tops the previous peak of $299.93 billion, set at the end of March 2000.
Essentially, we view the chart as a profile in extreme speculation. And, as we saw in 2000, that kind of excess is typically the perfect prelude to a fall. Reflecting on the spike in margin debt, Alan asks, "How can anyone in a fiduciary capacity buy into this rally at this juncture?"
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