As we slide into the last weekend of 2013, I read several articles this week that got me thinking about where the markets and economy are likely headed in 2014. However, before we get into today’s list of “Things To Ponder This Weekend” I just wanted to wish you a happy, safe and prosperous New Year.
1) The Year The Fear Bubble Popped by Eddy Elfenbein
I have written several articles in the past discussing that there was currently “Too Much Bubble Talk” for a bubble to exist currently. Just as with Alan Greenspan’s infamous “irrational exuberance” call in 1996 – the bubble actually popped four years later.  Eddy’s discussion of the “bubble in fear” follows a bit of the same logic suggesting that there is “no bubble” in assets, it has been in people’s “fear” of another market crash.
“Lately, many investors have been tripping over themselves in an attempt to call the current stock market “a bubble.” Me, I’m in the doubter camp. But what’s interesting is that this question misses a much larger point — we’ve been watching a bubble pop all year. The bubble was in fear.”
He posts several charts to support his thesis of how the “fear trade” has gone horribly wrong with gold plummeting, bonds getting smashed and even “safe haven” stocks underperforming.
However, here is an interesting question to ponder this weekend:Â
“The lack of ‘fear” has been a hallmark of every market bubble in history. Therefore, is Eddy’s thesis of a “pop in the fear bubble” a tell-tale sign of an asset bubble in the making?”
2) The Limits Of Expansion by Edward Lambert
The discussion of the “lack of fear” got me to thinking about the real long term driver of the financial markets which is economic growth and corporate profits.  Edward Lambert posted a very interesting discussion of aggregate profit and capital income stating:
