Tag Archives: SPY

Herbert Stein’s Law

3 Oct

The father of Ben Stein, Herbert Stein, wrote that “If something cannot go on forever, it will stop”.

If we look at the distribution of wealth in the US, Stein’s Law is at work. Stein’s law could be used as a way to describe why the “American’s Are Not Getting Fatter” as well, or why Detroit went bust.

And, as the Federal government begins to address raising the National Debt limit in the next couple of weeks, it is very much consistent with Stein’s Law that “it’s not really a ceiling if you continue to raise it.”

What is more important to the average Joe, is what’s going to happen to the stock market, and the economy. As the “U.S. Stock Market Moves Further Away From Reality“, below is a chart of the stock market (SPY) over the last 20 years. It looks like another top could be forming.

If Stein’s Law is working on the debt ceiling, it may be working on the stock market as well.