party like it’s 1929

You can see from the graph that the total stock market valuation relative to corporate profits historically averages around 1.2. It was as low as 0.35 in 1942 and 0.45 in 1983.

Crazy-high is over 2.8. It touched that level briefly in 1929 and then again briefly in 2022.

There is concern about inflation in the economy due to years of “easy money” policies and fiscal deficits. But the most significant inflation has been in the valuation of financial assets. It’s been extreme now for almost thirty years.