John Maynard Keynes:
"Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits – a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities."
I think this is why Tones, you feel the way you do. I don't believe the stock market is clear and real-time index to our economic conditions. The market reflects confidence in the economy to be sustainable. Economy is cyclical and wealth consolidates over time.
However, because we are not operating on a bimetallic standard, we rely heavily on trust to back out money of which the supply is controlled in the US by the Federal Reserve. Simple economics courses go over the 3 tool the Federal Reserve have to stabilize money supply. One option is for the Federal Reserve is to lower interest, but because low interest rates have an inverse relationship to bonds you eventually fall into a liquidity trap, where you can no longer reduce the interest beyond 0. Which is the situation we're in. From here on out, monetary policy by the Federal Reserve is useless and we're dependent on an incompetent government for fiscal policies to stimulate economic growth.
Part of the reason I believed we rallied for most of the year is because we've been in this slowed down economy for 4 years now. In the past most recessions and depressions last only several years. How long before the market self corrects itself? Part of the reason, maybe the Federal Reserve's monetary policy is doing its job keeping the economy above water.
If you want a fundamental reason on why the market is starting to break down, much of it has to do with reality. The Federal Reserve is in a liquidity trap, and in a liquidity trap monetary policy becomes ineffective. The FED buying long term bonds from here on out is basically saying they will eat the loss on depreciating assets (because again bonds and interest rate have inverse relations). According to Keynes our economy becomes dependent on fiscal policies to stimulate growth. Whether it's to increase government spending (Keynes divide spending into two categories giving and investing) on public infrastructure or public services or further reduce taxes. So which will it be? Naturally Repubs are pro-business and private sectors, Dems are naturally pro spending. The issue is the current and future government competent enough to invest the money rather than give it away?
my friend wow.... 
