Posted by Mark Thoma on Friday, July 15, at You can follow this conversation by subscribing to the comment feed for this post. The views expressed on this site are my own and do not necessarily represent the views of the Department of Economics or the University of Oregon.

Bull Market Blues High stock prices are "not evidence of a healthy economy": Bull Market Blues, by Paul Krugman, NY Times: The fact that the major averages have lately been hitting new highs What are those Wall Street indexes telling us? The share of profits And these days those options are pretty poor So investors are willing to pay a lot for future income, hence high stock prices for any given level of profits.

Today's Stock Market News and Analysis - urisofod.web.fc2.com

This may seem, however, to present a paradox. Instead, profits come from some kind of market power And companies making profits from such power can simultaneously have high stock prices and little reason to spend.

Consider the fact that the three most valuable companies in America are Apple, Google and Microsoft. None of the three spends large sums on bricks and mortar.

Cops and Robbers | by Margaret Atwood | The New York Review of Books

So when you read headlines about stock prices, remember: High stock prices are "not evidence of a healthy economy": Some International Comparisons JohnH on New Evidence for a Lower New Normal in Interest Rates Jerry Brown on Unions in Decline: Some International Comparisons JohnH on New Evidence for a Lower New Normal in Interest Rates JohnH on New Evidence for a Lower New Normal in Interest Rates JohnH on Unions in Decline: Some International Comparisons im1dc on Links for im1dc on Links for im1dc on Links for anne on Links for ilsm on Links for anne on Links for ilsm on Links for anne on Links for ilsm on Links for Brad DeLong.

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