Equities priced for perfection: Over the past quarters, equity markets have risen sharply, supported by strong growth in the U.S. economy (approximately 3.9% on an annualized basis). At the same time, long-term interest rates have declined, and gold prices have increased substantially. This combination typically occurs only when liquidity conditions are exceptionally loose. In such an environment, more money is available than the real economy can absorb, causing excess capital to flow into asset markets and drive prices ever higher. This can easily push equity valuations to levels that...