No question about it. The Dow and S&P have been going straight up for months. Not even a single triple digit down day.

  • The Housing market is crashing - The market doesn’t care.
  • Inflation is at the high end of the Feds comfort zone - Fed who? says Mr Market
  • North Korea has nukes - Market shrugs it off.
  • OPEC cuts oil production - So what says the market.
  • Iran/Nigeria/Venezuela problems could spike oil prices - We got reserves.
  • Amaranth collapse - Did something happen? Buy Buy Buy.
  • Too much money chasing too few investment opportunities - Private Equity buying anything they can for an LBO
  • High flying stocks and companies based on eyeball count are back. - Myspace, Facebook, YouTube and anything that’s Web 2.0
  • Momentum funds are back - Lets chase the market, what a brilliant idea. NOT
  • Mutual Fund Mondays are back - Retail investors chasing mutual funds that have already outperformed.

AND finally

  • Frequent use of the scariest words in the investing: “This times its different because….” - Yea right, its different because people want to fool themselves into believing its different

So does that seem like a Goldilocks scenario? To me it seems like a Deja vu from 2000. A lot of people (who seem to live in a Toy story world) are convinced the markets are heading “to infinity and beyond”. Ok I’m exaggerating, but at the very least we need a 5% (600 points) correction to remove froth from the markets. An 8-10% correction would be better IMO.