Good Article on Stock Market

http://www.breakingviews.com/2008/11/20/Dow%20fairly%20valued.aspx?sg=nytimes
Read that article.  Very good information on why the stock market is now back to where it should be (though it will probably continue to irrationally swing down a bit more before coming back up and stabilizing).
“The stock market crash has been big. The US S&P 500 index is 52% off its high, the largest percentage drop since 1937. But this was a mighty big bubble. The US stock market finally has reversed all the gains induced by the monetary stimulus of Alan Greenspan and his keep-it-going Federal Reserve.
Think back to February 1995. In that month, the Dow Jones Industrial Average – the index of blue-chip stocks that gets the headlines – first broke 4,000. Greenspan said then he wanted to slow down the “very torrid rate of increase in economic growth”, but the Fed actually started to let money supply grow too fast.
Since then, the St Louis Fed’s Money of Zero Maturity – a measure of “broad money” that can go to buy financial assets such as common shares – has risen at a 65% faster rate than nominal GDP. Without the extra cash flow, the Dow probably would not have outperformed the nation.
The idea that the stock market should mirror the economy seemed almost absurd as recently as June 9, when the Dow closed at 12,280 – and breakingviews pointed out that the correct non-bubble level was 7800. That should be 7900 now, after a quarter of growth-free inflation.”
But after the Dow’s Thursday close at 7552, it looks like the real absurdity was the stock market’s performance during much of the preceding 14 years. The tech bubble of the 1990s was little more than a sideshow in this drama of excess. The biggest exaggerations came in the sector overbuilt by too much money: finance.

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