What Happens When There Are No More Bears?

Back when I posted Classic Sign of a Market Top margin use was extremely high and the contrarian in me thought we must be near the top. Today, via Zerohedge, we see that the Bullish/bearish ratio is the most out of balance its been since at least 1989.

Just 15% surveyed are bearish on the market, even less than in the bubble of 1999. Near term that's very bullish on stocks. But it also means markets are more irrational than they've been at any time in the last 25 years.

And from Dallas Fed's Richard Fisher concerned about "Eye popping levels":

In his speech in Mexico City, Fisher said some indicators like the price-to-projected forward earnings, price-to-sales ratios and market capitalization as a percentage of GDP, are at levels not seen since the dot-com boom of the late 1990s.

He noted that margin debt is pushing up against all-time records.

"We must monitor these indicators very carefully so as to ensure that the ghost of 'irrational exuberance' does not haunt us again," Fisher said. While a few Fed officials have mentioned unease about stock prices, Fisher's comments are the most pointed to date.

Fisher did not spare the bond market, saying that narrow spreads between corporate and Treasury debt "reflect lower risk premia on top of already abnormally low nominal yields."

And finally, from  Cyniconomics blog:

As shown, the aggregate equity allocation for U.S. households is now at a level that’s only ever been reached in the Internet bubble years of 1998 to 2000.