RG: You say: *no way should the US major market indicies be at current levels*
Why not? Because you say so? Because of some great manipulation in all asset classes, all over the world, all at the same time? Because the liquidity that was lost in the real estate melt-down has been partially replaced by the federal government? Don*t be silly...
The global economy is in fairly good shape. Globally, assets are appreciating in the expectation of CONTINUED growth. Millions are being lifted out of poverty and into patterns of consumption which promote demand for everything. This creates rising prices and rising corporate profits.
Domestically, the US indices are well withing normal valuations, interest rates are low and growth is expected to be 3-3.5% which is normal, if a tad low. With some luck we should see unemployment fall next year.
And, yes, some of this is due to government intervention which was undertaken at a time of crisis and has proven to be net positive, even if not perfect. Some is also due to growth in emerging economies, as mentioned above.
This discussion of the international conspiracy to manipulate markets sounds increasingly paranoid*. A simpler explanation for the phenomena discussed is the economic cycle... accelerating after a prolonged and severe recession. Supply is tightening, prices are up and so are inflationary expectations.
The new normal is normal. Instead of decrying an evil conspiracy which does not exist, why don*t we figure out how to make a buck?
*BTW: I, personally, do not believe in free markets... they are always and everywhere manipulated to disproportionately benefit the more powerful participants. Every economy, like every eco-system, has its predators and its prey. This is not to say there is a conspiracy... Predators do what they do naturally. A conspiracy is not required for the powerful to benefit disproportionately from any particular system. In the current context, The Fed has saved all our azzes, and the rich/powerful wstand to benefit most of all.