I think there is a good chance of a 15 to 20% correction in US equities sometime between now and the end of July. I am not at all sure of the timing, in part because the Fed is adding enormous amounts of liquidity which seeks out beta, AND the volumes remain light, so this liquidity can do its work in a relatively straightfoward manner.
But as with all sugar high bubbles, this one is going to pop. We are in bubble territory, so a trigger event is able to quickly deflate the stock indices. The higher stocks go, the less of a trigger event will be required. It could also come as a series of event that together bear enough weight to shake the Fed's policy errors back to some more realistic base level.
Most of the economic discussion I read is either complete book-talking puffery, or naively pedantic. I wonder how many bubbles it will take before this Ancien Régime of crony capitalism is overthrown, and how difficult this transition might be.
