It's not that it's not expensive; it's that there's no other choice, so it's cheap.

The forward P/E of the S&P 500 is 21.5x. Morgan Stanley says it's not expensive because earnings are strong. Translated, it's just one sentence: Fund managers are so poor they only have stocks left; what else are they going to buy?

The S&P 500's P/B ratio is 5.3x, higher than the 5.1x peak of the 2000 dot-com bubble. The historical average is 2x. I spent 30 bucks on a bottle of Coke, and after drinking it, I said, "It's not expensive; it quenches thirst." The one who got their thirst quenched was me, not the Coke.

If there's only one grocery store in the desert, and the owner sells water for $500, you wouldn't say it's expensive because you have no choice.

Global AUM is approaching $10 trillion. Treasury premiums are high, the yield spread on credit bonds can't even cover transaction fees, and commodities crash every time you play. In the end, all the money rushes in, crowding into the US stock market, the only place everyone can stay together.

Morgan Stanley also once said, "As long as the volatility of US Treasury yields is controllable, there's no need to worry." Translating this into plain language: "As long as central banks are still backing us up, the bubble can keep inflating."

Everywhere is using the stock market as YCC. The East is, Japan is, the West is too. The East has its national team. The Bank of Japan bought ETFs for 10 years, has now exited, and the Nikkei is still rising. It's not that the logic has become solid; it's that the money hasn't finished dispersing. The size of the US REPO market has soared from $6 trillion to $12.6 trillion, with leveraged funds hitting a record high of $1.23 trillion. The Fed talks about raising rates, then keeps the bubble alive through the repo market.

What's the difference from YCC? None, just a different script with more expensive actors.

"Strong earnings" is a stock narrative. The profit growth rate of the Magnificent Seven has already fallen below 20%, the second wave of AI is receding, and oil prices and geopolitics are looming overhead. You're using last era's financial reports to endorse today's 21.5x P/E. You know it's wrong, but everyone's doing it, so what do you do? You can only keep going crazy. That's why we're seeing the unprecedented three major IPOs.

The bubble isn't about high valuations; it's that only one type of money is propping it up—the kind that has nowhere else to go.

With $30 trillion in negative-yielding assets finding no exit, central banks talk about tightening while releasing liquidity. At this point, someone comes out and says, "US stocks aren't expensive." Anyone who says they're not expensive should have their investor card revoked. What did they learn in financial analysis?