The $32 Trillion Stock Bubble Is Now In The Donald’s Gunsights

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If proof was ever needed that the stock market is not the same thing as the US economy, the 20% risein the S&P 500 index since January 2o, 2025 should be dispositive. That is to say, the Oval Office on that date became occupied by the greatest one man economic wrecking crew in all of US history. So if the stock market were actually pricing the future outlook for growth, profits and prosperity, the then already drastically over-valued indices should have been heading for the hills thereafter. On the double!

And, yes, we do mean the stock market was drastically over-valued even on January 20, 2025. At that point, the debt, speculation and inflation-ridden US economy was already boasting a stock market trading at 25.0X net income on the S&P 500.

Yet four decades earlier in 1985—in the midst of a strongly recovering economy after the Volcker inflation cure had worked its magic—the aggregate net income of the 500 S&P companies had traded at just 14.3X trailing net income (see table below).

So the question recurs. Why in the world should a dollar of US corporate earnings now be two times more valuable after 40 years of UniParty borrow, spend, print, regulate and tax? And that’s especially after being capped off by the fluke re-election of an imbecilic mad man on economic policy?