I have posted Entry #10 for my weekly Valuation-Informed Indexing column to the Value Walk site. The title is Why Financial Regulators Cannot Do the Job and How to Fix the Problem.
Juicy Excerpt: Economic instability being brought on by stock overvaluation cannot be addressed effectively by regulators. This is a case in which the public itself enjoys the benefits of the “fraud” being practiced. Stock overvaluation is experienced when prices go up, up, up. Who doesn’t like that? How many angry letters did our elected representatives receive complaining that stock prices were just going up too darn fast and something had to be done about it pronto? Put another way, how many angry letters would the politician who tried to do something about it have received had he stuck his neck out?