Surely SOMETHING must be depressed? Otherwise, where's the money/bubble inflator fuel coming from? I know Jeremy said money/credit's easy to come by now, but wasn't it even easier (at least in the U.S.) a few years ago before they started raising rates several times per year? Maybe it's coming from NOT investing in NASDAQ stocks, which has still nowhere near recovered to its 2000 levels while the Dow has absolutely blown by its previous highs?

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But I'll comment on the post.

Except during times of deflation and except for currency-like assets such as gold it could be said that since all values are just matters of public perception, bubbles too are just matters of public perception and are in fact just indications of a loss of confidence. irrespective of any underlying value.

Why does anything need to be depressed? It's all perception. If 1 guy buys 1 share of Apple for $200 and everyone else agrees mentally that this is a good price then AAPL's stock is stable at $200. No need for financing.

Asset bubbles in particular never end with a soft landing. Central London right now is £1,500 per sq foot for prime stuff. Average areas are breaking £1,000. The Madrid property market just went through the floor after 10 years of extreme expansion. With the imbalance in global payments this is likely to spill over into every other market as well. This will be interesting. Where do we park our money ?

"Depressed" refers to pricing, not mental state, and what I mean is that while bubbles are a mass psychosis phenomenon, they are ALSO based on the reality of crazily increasing prices in certain sectors, which are based on more people paying more money for the same thing, but that money must come from someplace, right? And it usually comes at the expense of another sector. I don't see that here. While I'm at it, why aren't we seeing the impact yet of the boomers retiring and no longer contributing to their 401Ks and instead withdrawing from them, which should remove a lot of the fuel of mutual fund/institutional investment demand and thereby somewhat deflate stocks in general? Both of my formerly working parents retired a few years ago, both of them used to max contribute to their 401Ks, and both of them not only don't contribute to their plans anymore, but they actually withdraw from them. And I know they're not alone.

Haven't seen the original Grantham piece, but I do enjoy hearing his views on the markets.

Here's a summary of what he seems to be saying in this latest commentary, courtesy of Yahoo! News:

http://biz.yahoo.com/ts/070427/10353243.html?.v=7

The idea that a variety of asset markets are currently priced in the stratosphere is one previously expressed by Marc Faber.

See: http://financetrends.blogspot.com/2007/01/marc-faber-warns-of-asset-market.html & http://www.safehaven.com/article-6409.htm

Did anyone actually read this? You have to go through a registration that forces you to opt in for their emails. Idiots don't want their commentary read, I guess.

Thanks for the chart!

"but that money must come from someplace, right?"

No. In the example above 1 person must spend $200 to double the market cap of Apple. Granted a lot of things have to go right, perceptionwise. But it certainly doesn't take more capital.