> (4) Then there are trends--usually not sufficiently long term to count--in
> preferences between stock markets, bond markets, real estate markets, and
> so on, that could account for massive movements of money and changes in
> valuation.
Hmm, one thought comes to mind here: the history of capitalism seems to be a warped upwards spiral (I'm picturing a psychedelic Slinky, for some reason) of all forms of capital. The US stock bubble is the obvious example, but in fact all forms of debt have been growing faster than the GDP for some time. Total US debt, public plus private, is what, some 180% of GDP, and the figures for Central Europe and Japan are even higher. Maybe the US financial system, due to its history, uses market equity where East Asia and the EU use bank lending. The thing is, you can bail out banks, but bailing out stock markets implies the effective nationalization of assets -- a la China's buyup of reeling Hong Kong stocks last year. We can't have *that* in America, now can we.
-- Dennis