Is a Stock Market Bubble Coming?

Is a Stock Market Bubble Coming?

News Worth Mentioning

Latest News

News from Europe

Science Tech Med News

Climate Change News

Second Amendment News

Socialism News

Mauldin City News

Posts on Twitter

Political Cartoons

News Archive
  2020 Jan.-Apr.
  2019 Jan.-Jun.,
  2018 Jan.-Jun.,
  2017 Jan. 1-20,
Jan. 21-Dec.
  2016 Post-Election,

privacy search engine

Friends dont't let
friends get tracked

News Sources
Worth Mentioning

Aerospace and Defense Technology

Americans for Limited Government

AP News

Asia Times

Astronomy & Astrophysics

Aviation Week &
Space Technology

The Ayn Rand Institute
The New Ideal

Babylon Bee (satire)

BBC News

Bearing Arms


Big League Politics

The BL

Black Community News

The Blaze


Campus Reform

Canada Free Press

Capitalism Magazine

Center for Disease Control

Center for Individualism


CNBC Premarket

Comically Incorrect

Conservative Review

Conservative Treehouse

The Conversation
Academic rigor, journalistic flair

Crime Prevention Research Center


Daily Caller

Daily Torch cartoons

Daily Wire

The Dan Bongino Show

Diamond and Silk


The Drive

Drudge Report

Dr. Michael Hurd

The Epoch Times

Express (Britain)

Fact Check

The Federalist


Flyover Culture


Foreign Policy

Foundation for
Economic Education

Fox News
Fox Business


Freedom Headlines


Frontpage Mag - David Horowitz Freedom Center

The Future of Capitalism

The Gateway Pundit

Greenville Symphony Orchestra

Greenwich Mean Time

Gregg Jarett

Herald Mail Media

The Heritage Foundation

The Hill

House of Sunny Podcast

House Freedom Fund news




Independent Journal Review


Irish Central Newsletter


Judicial Watch

KitCo Gold & Silver

Law Enforcement Today

Legal Insurrection
Branco political cartoons


MAGA Daily Report

Market Watch

McClatchy DC

Michelle Malkin

Military Times

mrc News Busters

NASA Spaceflight History


Proceedings of the National Academy of Sciences

The National Pulse

National Review


The New Ideal

New York Post



The NOQ Report

NRA-ILA Legal & Legislative News

The Observer

One America News Network

Pacific Legal Foundation

Patriot Network

Patriot Post

PJ Media

The Pluralist

Political Geography Now


PoliticsHome (Britain)


Red State

The Register


Rush Limbaugh


Science Alert

Second Amendment Foundation

Seeking Alpha

Senate Conservative Fund news

Simpsonville Sentinel

Sloan Kettering
Cancer Center News

Stand for America

Stat Medical News

Stilton's Place

Thomson Reuters Foundation


Trending Views

True Pundit

Trump Transition Website

Trump's accomplishments

Trump's policy positions

Truth Finder
Public Records Search

Turning Point USA

Victims of Socialism

Visual Capitalist

Washington Examiner

Washington Free Beacon

The Wealthiest Investor

Western Journalism

Whatfinger News

The White House


Go to top

Political Commentary
Home Page

All Skills Are Learned
and the Method Is Key

The Foundations
of Freedom

Everyone is Smart but Trump

Climate Change
A Political Tool

Politics Trumps Economics Redux

Who Are the Good Guys?

Slavery Today!

Justice Clarence Thomas and the Lost Constitution

Politics Trumps Economics

The World's Second Constitution

Why America is Great

President Trump
in pictures

US stocks a better buy

Economic Arteries

The Left against
the First Amendment

Is a Stock-Market
Bubble Coming?

Individual Rights
States' Powers

Thanksgiving Toast
to the Old Breed

George Washington

Business As Usual
at the White House


Who Gets To Decide?

America Rebounds!

The Trump Economic
Paradigm Change

What's wrong
with the EU

The Trump Presidency

The Election -
What Happened?
First Monday speech
5 December 2016

Mike Rowe on
Burning the Flag

Socialism means
giving your freedom
to the government

Second Amendment


This is Hillary

Where We Live

Honorable Politicians


Citizen Politicians

So You Want Socialism?

Authorized Not Imposed

Against Rights and Freedom

vs. America

Speech to County GOP

The Economy

Being America

The Individual
vs. Statism

To-Do List

Unite or Die

Lost Trust

Quotable Quotes

Go to top

4 January 2018

Read this article about the stock market's rise above 25,000 for the first time today.

Here are the key paragraphs:

For many years, the market's rise was met with skepticism and hostility, earning it the widely used description as the most-hated bull rally in history. That antipathy has been seen as part of the reason for the market's durability, however, by investors who often like to cite John Templeton's maxim that bull markets "are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria."

But the market's 2017 performance convinced many observers that the bull is in a new phase. Some have warned that stocks could be in the midst of or on the cusp of a "melt-up," a rapid surge higher as investors who fear they've missed out on the rally stampede into the market. Such melt-ups are usually followed by sharp selloffs as buyers exhaust themselves.

Well-regarded value investor Jeremy Grantham, in a Wednesday note, said he sees a "possible / probable bubble" forming that could lead to a meltup in the next six months to two years that would likely be followed by a meltdown.

Here are my thoughts on the comments made in those paragraphs.

To use a phrase I have used before, politics trumps economics.

In other words, the changes President Trump has done and which one can expect he will continue to do free up the market of political controls.   As long as the economy - and therefore the market - is freed of political interference, it will continue to grow.

And as long as Trump continues peeling back regulations, the economy will continue to have new possibilities to grow, and so the stock market should rightfully respond by continuing to grow.

Will there be a bubble, and will it burst?   Certainly.   Development and stock buyers' exuberance will propel continued growth, until it overextends beyond what makes sense in the changed political climate.

What happens when the bubble bursts?   It depends on the cause of the burst.   There are two possibilities (excluding world war and comets, volcanos, or other natural calamities).

If, as noted above, the market simply over-extends beyond what makes sense, it will collapse back to a more sensible level - by first collapsing a bit below that level, and then rebounding more closely back up to that level.   If this is the case, hold on to your investments; wait it out.   Or sell some, and buy more on the downturn.

Contrarily, If the cause is political, like the passage of the Smoot-Hawley Act of 1929, then that political action - i.e., increased restrictions - means you should then sell your stocks.   The impact will be serious: a depression / recession.   In this case, buy back in at the new, reduced stock-market levels after the dive and re-stabilization of stock prices.

This would be like recognizing the implicit impossibility and impending failure of the Clinton-Bush effort (i.e., 1998-2002) to require banks to make sub-standard mortgage loans, predicting how quickly it will grow and how soon it will impact the economy, and figure out what signs to watch for that will indicate the market is close to reaching a peak, which happened in 2007, and then getting out, selling your stocks.   Then getting back into the market in 2008 or 2009, at the new re-stabilized level, and riding the new growth all over again, as we have been doing since then.

One virtual certainty about politics: when Trump leaves office, even if it is his Vice President Mike Pence who succeeds him, I doubt Trump's successor will have the brains and see the value in continuing what Trump is doing.   Barring any other possible halt to economic growth, I expect it at least to slow down once Trump leaves office.   Watch out for the next President's uttering of some phrase like, "Well, President Trump overdid it a bit."   That is your cue of what the next President's impact will be.   If his comments are negative, expect a downturn.

The U.S. economy soared under President Calvin Coolidge, who said, "That government governs best that governs least," and he did so.   The Roaring Twenties was the result.   It was his successor, the also-Republican President Herbert Hoover, who was responsible for the Smoot-Hawley Act.   And we all know the result of that:   the Great Depression, the 12 years of the socialist policies of Franklin D. Roosevelt, and World War II.   It was not until 1954 that the U.S. finally reached the same level that it had been in 1929.   A whole generation saw their fortunes lost, hopes dimmed, and lives and careers ruined, and then compounded by so many killed in WWII, and for the U.S., the Smoot-Hawley Act deserves the lion's share of the blame.

This is history from which a lessons-learned review can be immensely relevant to your well-being and prosperity.   Be aware of the facts as the future unfolds.

--   Scott Crosby

Go to top