"...Fourth, ultra-low long-term interest rates and credit spreads continue. This has been the support of everything above, global real estate, private equity and m&a deals, emerging market and all other valuation issues, etc. The failure to come to grips with this has been a major problem for bears..."

it wasn't the low interest so much as the vast amount of leverage being created in globalized financial markets. in their defense, the bears could never have seen it coming. Greenspan allowed a "criminalization" of credit. (when the iron curtain fell, democracy didn't flow in - a criminal empire poured out) Greenspan, the woody-allen-wanna-be, allowed the financial world to eclipse the real world, to our collective detriment.

financialization goes to the heart of the stagflation Q. the kind of inflation occuring has to be made clear - is it inflation caused by easy credit or rising wages (not this time around!) ??? both of those SHOULD be offset by an expanded pie. Monopoly, however, is never offset, because monopoly shrinks the pie to the benefit of the few (Batra claims inequity causes ressession, but never really says why). monopoly is the root of inflation.

but the real economy is suffering deflation - you wouldn't know it, because the financial economy is inflating - but its an inflation which is the result of A) dim witted Reagan-voting Voodoo Econ deregulation (privatized monopolies) and B) market cartels (the corporate aristocracy monopolizing between themselves). it all comes down to monopoly money (aka, financialization-haha)

its the stagflation/inflation Q which is probably the most revelant when it comes to picking a market top. real inflation will end up saving the irresponsible "growth forever" margin investor. a real inflation will make the stupid and the irresponsible look smart AGAIN and give the bears the shaft AGAIN. a real inflation will keep not only the price of gold high, but will also keep stocks high.

but imagine a world where oil continues to climb (peak oil) while gold drops - ie, the market wakes up because there is no inflation riding over the horizon to save the mindless borrower. at that point, they edge for the exits - the US$ becomes strong - although the opposite what you'd think. when gold goes a bit down & the US$ goes a bit up, that's when the hidden leviathon of global leverage will contort. that's when this golden era of financialization begins to decline.

its all totally backwards from the 1970s.

a high gold price = a good time to invest in IPOs = no market top

BUT if the market sees inflation as monopoly

gold declines = get out of tech & financials = market top