Jason,
This is very interesting - the grumpy conundrum is concerning to say the least as to the trending equity risk premium and considering global economic growth may have peaked. Thanks for your analysis. I am curious about a couple of things:
1 - The impact of perceived increase in share-buybacks - It seems the market is now factoring in higher CF as a result of lower taxes. Certainly this is proportionately adjusted in the CAPE calculation, yet what about the dividend yield (I don't think companies lower their dividend payouts?) and impact on the equity risk premium? (Admittedly I'm not up to snuff on the literature).
2- Adaptive Market Hypothesis - the evolving AMH suggests that there are periods where risk/reward relations don't follow the norm - of which currently the author of the AMH we are in such a period (I don't think he is suggesting that the market isn't overpriced, yet risk/reward relationships are not the norm). Do you have an opinion on this in relation to the current equity risk premium falling in negative territory? Just curious and appreciate your insights.