—BURSTING THE BUBBLE
The evidence of a speculative bubble in the U.S. stock market is overwhelming. Virtually every valuation tool employed by analysts has reached record levels, even surpassing the speculative extremes of 1929. In spite of the ominous risks in this market, speculative activity continues to rise. Long-term investors are outnumbered by short-term speculators and even day-traders. This speculative binge has been aided by the increasing reliance by institutions on derivative hedging and by individuals on online trading.