starting from around 1980, the US kicked off a 40-year trend of lower interest rates from a very high level. This kept reducing the hurdle rate for valuing companies and other assets, resulting in structurally rising valuations. It also reduced the cost of borrowing to buy those assets, which incentivized taking out leverage and buying those

... See more

It’s the most extreme divergence between consumer sentiment and the stock market in over 40 years. This next version of the chart shows the same data, but it’s measured in terms of how far they are off from their highs. We have look back at the early 1980s to find a similarly low sentiment reading while stocks were near their highs: This divergence

... See more