“Stocks are now as expensive as they were in 2007, says our old friend Mark Hulbert. As for bonds, they are at the top of a 30-year bull market. And gold? The metal bottomed out in 1998. It’s gone up ever since, with a textbook correction over the last year or so. What’s happening now? Slowly, gradually, like draining a huge lock on a canal, the bond market is dropping. Bonds rise on trust. They fall when trust ebbs away. Why should trust fall now? The simple answer is because it has run its course. Trust is cyclical. As it grows, people become more confident, more sure, and more reckless. Why hold back when there is nothing to fear?”

http://www.equitymaster.com/dailyreckoning/detail.asp?date=08/16/2013&story=9&title=Trust-is-falling

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