I think that story makes sense for when the profit rate falls (as from the late 1960s in the US). But as Doug notes, it's currently rising (though methinks K-waves are BS). I think the current Bull market is more similar to that of the 1920s, when the profit rate was rising, especially in the corporate sector. High profits allow high stock valuations. Also the strong profit flow allows corps to buy back their own stock (a current phenomenon, not seen much in the 1920s). Third, the rightward shift of the income distribution that accompanies the rising profit rate gives money to the classes most likely to speculate. Finally, the "nothing succeeds like success" attitude spawned by successful union-busting, wage-cutting, etc., encourages the optimism that can be the basis for "irrational exuberance."
>To fulfil their new role
>as not only store of value but as investment outlet for
>overaccumulated capital, those financial assets must
>be increasingly capable of generating their own self-
>expansion, and also be protected (at least temporarily)
>against devaluation in the form of both financial
>crashes and inflation.
Financial assets can't be "self-expansive" unless production is also profitable.
The rest is interesting, but I don't have time/energy to comment.
In fact, I'm going to drop off this list. Too many obligations, too little time.
Jim Devine jdevine at popmail.lmu.edu & http://clawww.lmu.edu/Departments/ECON/jdevine.html