Indeed, foreign observers seem rather more able to spot the glaring anomaly that is Wall Street than Americans whose optimism is incurable.
Why should the S&P hold up at these levels while any idiot can see the outlook for corporate profits is dismal and getting worse, not better!
We are not just talking about the housing and financial sectors, where the share price rout has already occurred.
High oil prices mean high inflation and a squeezing of profit margins across the board, while a US recession is taking its toll on demand.
Unemployment rose by half a per cent last month, and nobody expects the housing debacle to be over for at least another 18 months.
One of the old timers of Wall Street, Joseph Granville, who at 82 still commands attention, reckons the Dow Jones will fall to a little over 7,000 points over the next couple of years – a retracement back to its 2003 level before the Iraq War.
Yet surely the real onus is on the optimists to prove their case. A quick bounce-back from the current recession, a few rate hikes to quell inflation and the re-launch of USA Inc under a new CEO. You have to be pretty naïve to swallow that.
The average recovery time from a financial crisis is three years, and the present one is already being described as the worst since the Great Depression.
Interest rate rises in the current environment would make the recession even deeper and longer, and inflation remains the lesser of two evils. And a new President could initially be more of a liability than an asset as he learns the ropes.
Indeed, the best play is to short Wall Street, or at least some of its finest stocks. Timing is always a problem with shorting. Get it wrong by just a day or a few hours and you have made an expensive error, even if you had the right idea.
Short the S&P
However, a put option on one of the main indexes over the next 12, 18 and 24 months ought to be a sure-fire winner. Ask your stock broker for an appropriate option.
Calling the market crash is tricky; the direction is easy. It could be as soon as this October when the animal spirits of the market look forward to a change of presidency and decide to vote with their feet and head to the exit.
Or the Street might be persuaded to give a new guy a chance and then take fright. Or something could go badly wrong tomorrow.
Actually it would not matter whoever was in charge. The ongoing fall-out from the current recession, financial crisis and energy crisis will be playing through and pushing up unemployment, demolishing profits and bankrupting companies. Stocks do not generally perform well in such an environment.