I believe investors are underestimating the path of the current budget situation. Yes the estimated 4.7% deficit is better than it has been but the long-term path has not been fixed yet. In fact for the last month the budget deficit was $90 billion (up a bit from $80 billion last july). It may not be an extremely dire situation, but I think its one that still seems to be underappreciated by investors who believe that it will right itself and perhaps hussman will be right that it has been the deficit spending thats been supporting high profit margins.
when this budget deficit gets fixed or perceived to be fixed and the new energy and biotech economy gets going again there will be another REAL raging bull market but only after the negative repurcussions of this govt spending problem and fed policy manipulation have come to fruition.