As everyone gets caught up in the euphoria [5] of an ever rising S&P, remember that once upon a time, in a land far, far away, the economy was driven by goods produced and services provided instead of the amount of excess reserves banks can use to bid up market prices with.
Today however, the health of the economy seems to be lumped into the level of the S&P 500. Of course, with record deficits, and a record fed balance sheet, the message now is that everything is fixed - the economy is healed. This, as ZH readers can surmise, is complete nonsense. However, since we are ruled by a "new keynesian" elite, and they are supported by their media arms, well, they control that message.
One would think that the market levels would reflect the strength of its underlying components (at least to a degree). One of those components is the PMI. This index gives an indication of how the manufacturing segment of the economy is doing - you know, the segment that is actually producing goods.
The PMI has flatlined since about April 2012, and the level has been bouncing around 50 (a level of >50 indicates an expansion), with January 2013 ticking up to 53.1. During this time, the S&P has completely ignored the fact that our manufacturing segment is struggling, and has soared to new heights. This of course, is all that matters now, as the message is that as long as SPX, RUT, etc, are vertical, the economy must be healthy.
Carry on gentlemen, carry on.