November 21, 2016, 6:30pm EST

Stocks hit new record highs again in the U.S. today.  This continues the tear from the lows of election night.  But if we ignore the wild swing of that night, in an illiquid market, stocks are only up a whopping 1.2% from the highs of last month — and just 8% for the year. That’s in line with the long term average annual return for the S&P 500.

And while yields have ripped higher since November 8th, we still have a 10 year yield of just 2.32%. Mortgages are under 4%.  Car loans are still practically free money.   That’s off of “world ending” type of levels, but very far from levels of an economy and markets that are running away (i.e. you haven’t missed the boat – far from it).

Despite this, we’re starting to see experts come out of the wood works telling us that the economy has been in great shape for a while.  That’s what this is about – what’s with all the fuss?  Not true.

Remember, it was just eight months ago that the world was edging toward the cliff again, as the oil price bust was threatening to unleash another global financial crisis.  And that risk wasn’t emerging because the economy was in great shape.  It was because the economy was incredibly fragile — fueled by the central banks ability to produce stability, which produced confidence, which produced some spending, hiring and investment, which produced meager growth.  But given that global economic stability was completely predicated on central banks defending against shocks to the system, not on demand, that environment of stability was highly vulnerable.

Now, of course, we finally have policies and initiatives coming down the pike that will promote demand (not just stability).   If have perspective on where markets stand, instead of how far they’ve come from the trough of election night, we’re sitting at levels that scream of opportunity as we head into a new pro-growth government.

When the economic crisis was in the early stages of unraveling, the most thorough study on past debt crises (by Reinhart and Rogoff) found that delevering periods (the time after the bust) took about as long as the leveraging period (the bubble building period before the bust).  With that, it was thought that the deleveraging period would take about 10 years.  History gave us the playbook, in hand, from very early on in the crisis.

With that in mind, the peak in the housing market was June of 2006.  That would put 10 years at this past June.  The first real event, in the unraveling of it all, was the bust of two hedge funds at Bear Stearns in mid 2007.  That would put the 10 year mark at seven months out or so.

That argues that we’re not in the late stages of an economic growth cycle that was just unfortunately weak (as some say), but that we should just be entering a new growth phase and turning the final page on the debt crisis.  And that would argue that asset prices are not just very cheap now, but will be for quite some time as a decade long (or two) prosperity gap closes.

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