S&P 500 "Worth 850"

Jeremy Grantham recently commented on the dire US debt situation. The US consumer is leveraged as badly as ever, and government finances look like they did after World War 2.

Moreover, the Federal Reserve is simply re-playing the same ‘borrow-and-spend’ song by pumping endless US dollars into the system – a tactic that will end in misery. Bubble priming always end in a bust at some point. But this time around the public-sector arsenal is depleted. Could the US government, for instance, prop up another collapse?

Grantham says:

“The market, however, is worth only 850 or so; thus, any advance from here will make it again seriously overpriced, although the high-quality component is still relatively cheap.”

Source: Brisbane Times