I’ve long said the stock market is over valued. I note the Motley Fool has just sent me an email saying (and I can’t find a link on line):

This time last year, financial experts were calling for the second Great Depression... the market was plunging to its lowest level in over a decade... and panicked investors were dumping stocks as fast as they could.

Since then, we've witnessed an unprecedented market rebound and seen investors just like you not only fully recover, but actually build small fortunes -- simply by keeping their heads and making a few prudent decisions.

But now, with historic unemployment rates, a ballooning federal deficit, and mounting foreign debt fears, the "experts" on Wall Street are forecasting a market crash that could make the last one pale in comparison

I think this is glaringly obvious. This is the FTSE 100 for the last three years. The S&P 500 looks very similar:

We’re not out of recession with any certainty.

The cuts to come are going to be crippling for the economy.

Unemployment is going to rise without a doubt as spending cuts are implemented.

Currency crises are in the offing.

And whilst it’s true the market has corrected a little of late it’s running at a current index value higher than those seen in 2005. That’s madness.

When this crashes — as surely it will, the only question is whether it will be the precursor of depression or in reaction to its onset. Either way those who argue markets are rational need their sanity checked.