The Russell 2000 is back to the 2007 levels. The Crash of 2008 is long forgotten.

On the 9th of July 2007, the Russell 2000 ETF (IWM) reached its peak of $84.90 per share. Three and a half years later and many blog posts about this anomaly later, we are back at $81 per share, just 3% short of its all time high.

More interestingly, for the past 3 years, the index has had a negative EPS — meaning the aggregate of the 2000 small cap companies of this index are unprofitable, and that their earnings are negative. You can check the PER of the major US indices on this WSJ page.

This shows just how much speculative mania is driving this rally, and that there nothing "fundamental" that can be potentially driving this market.

Yet again, the NFIB just published their small business economic trends for the month of Feb, and here are the interesting quotes:
Average employment change per firm was negative 0.15 employees over  the past three months.  After hitting the “0” line in October and November, job creation turned negative in December and deteriorated further in January.  
Owners remain in “maintenance mode”, apparently unwilling to risk new capital investments or not seeing any need for them.
The net percent of all owners, seasonally adjusted, reporting higher nominal sales over the past three months improved by five points to a net negative 11 percent, 23 points better than March 2009 (near the recession bottom) but still indicative of weak customer activity.
Reports of positive earnings trends improved points in January, registering a net negative 28 percent.  Better, but still far more owners report that earnings are deteriorating quarter on quarter than rising.  Part of this is due to price cutting [...] Labor cost, materials costs, interest rates – not the problem.  It is still weak sales.
Washington remains obsessed with the notion that small banks will not lend money to “creditworthy” firms and that this is holding back employment and economic growth.  Washington keeps inventing new programs to spur lending to small businesses, ignoring the fact that small business owners, for the most part, do not want a loan.
A near record 52 percent of owners still claim they do not want a loan and only three percent claim that financing is their top business problem while 17 percent cite unreasonable regulations and red tape as their top issue. 
Federal, state and local governments have gone too far, arrogantly directing resources to unproductive purpose, engaging too many people in those activities and compensating them too well while promising too much.  This has compromised the health of the economy and impaired its ability to grow.  The financial crisis was at a minimum enabled by government, and most likely amplified by bad policies.  Government is the problem.  It will take time to clean-up this mess, but our future competitiveness and success depends on getting that task successfully completed.
Here are the relevant posts (I probably missed some more):

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