There were a number of interesting financial news stories this week including:

1) The billions of dollars in profits the Wall Street banks made using taxpayers' money. Goldman Sachs alone is paying out $23 billion in bonuses this quarter to their employees!

2) Some of Tim Geithner's closest aides in the Treasury department reaped millions of dollars working for Wall Street banks and hedge funds - part of that revolving door that needs to be slammed shut between Wall Street and Washington DC.

3) It was reported that major banks and financial firms spent $114.2 million in contributions toward the 2008 election campaign. In addition, they spent $77 million on lobbying and $37 million on federal campaign contributions.

In return, these political activities have yielded them $295.2 billion from all the various government bailouts. That a return of 258,449%! Wow - these guys are brilliant "investors"! And let's not forget that financial "reform" is now a dead issue for both the Congress and the Obama administration.

4) With the current job losses due to the financial crisis, employment levels in the United States are now back to the same levels they were a decade ago. It has been a "lost decade" for jobs.

DOW 10,000

Yet the media could only talk about the Dow Industrials hitting the 10,000 level again.

I say - so what? The Dow Industrials hit 10,000 back in March 1999 - there has been zero progress for a decade!

And if you adjust for inflation, the Dow has actually lost 23.5% during the past decade. In terms of the Euro currency, it has lost 28%.

And in terms of that long-term store of purchasing power - gold - the Dow has nose-dived by 73.5%!

So where does the 60% rally since the March lows put the stock market now?

The stock market is now at its most expensive level in seven years. It is trading at 26 times operating profit and an incredible 180 times reported profit!

On a reported basis, this market is nearly times as overvalued, as it was during the tech bubble.

History has shown that when the stock market reaches these valuation levels, the odds of it being lower a year later are in excess of 60%.

Caveat Emptor!

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