Free Republic

The stock market's torrid rally has left it vastly overvalued and vulnerable to a horrific plunge, says Henry Blodget, editor-in-chief of Business Insider. "Every valid valuation measure I look at suggests that stocks are at least 40 percent overvalued," he writes on the service. Among examples Blodget cites is that the cyclically adjusted price-earnings ratio, based on 10 years of profits, stands at 25, compared with a long-term average of 15. In addition, the current ratio of stock market capitalization to revenue is 1.6, compared with a long-term average of 1.0, he notes. And the ratio of stock market capitalization...

To listen to all the moaning out of the House of Representatives yesterday, you could be forgiven for thinking that the Republicans are losing the fiscal battle in Washington. Actually, they're winning. To see this, you just need to step back and look at the tax deal and the country's fiscal trends from a broader perspective. Yesterday, the American government voted to extend almost all of the Bush Tax Cuts permanently. Not temporarily, as a stimulus measure. Permanently. Ever since the Bush Tax Cuts were first enacted in 2001--temporarily, as a stimulus measure--one goal of the Republican party has been...

A few days ago, when Hank Paulson called the heads of the nine families to Washington and shoved cash down their throats, he announced that the banks would use this new taxpayer cash to lend. They won't, of course. They'll hoard it like a starving family who has just been given a grocery cart full of food. And after a few days of silence, even the banks are finally admitting that. So it's back to the drawing board for Paulson & Co. Next steps? Find a way to force the banks to write their assets down to nuclear winter levels,...