Interesting read this morning.
Doug Henwood, in his book Wall Street, argues that the q ratio fails to accurately predict investment, as Tobin claims. "The data for Tobin and Brainard’s 1977 paper covers 1960 to 1974, a period for which q seemed to explain investment pretty well," he writes. "But as the chart [see right] shows, things started going away even before the paper was published. While q and investment seemed to move together for the first half of the chart, they part ways almost at the middle; q collapsed during the bearish stock markets of the 1970s, yet investment rose
Also this Russell Napier, is a bear market scholar, he only is helpful if the market is going to continue to decline, so I tend to discredit those people
Just thinking aloud here, but isn't the concern inflation, not deflation?
Also, I found it interesting that M2 money supply (cash, checking, savings, CD's <100k, and retail money markets) is now at $7.92 trillion which is greater than the total market cap of the S&P 500 at 7.83 trillion.