"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing." -- Former Citigroup ( C) CEO Chuck Prince (2007)My concerns were dismissed by the markets. Despite no improvement in the consensus corporate profit outlook, the P/E multiples of the S&P forged ever-higher, starting the year at 13.7x and exceeding 16x a week ago. (Note: It is now down to 15x.) Even some of the most strident bears recently turned bullish in an apparent acquiescence to the market's nearly uninterrupted run-up. Most conspicuous in a bearish-to-bullish transformation has been Dr. Nouriel Roubini. Gluskin Sheff's David Rosenberg even pulled in his ursine outlook. So did many others. Hedge funds, benefiting from the highly profitable (but levered) carried trade, took their net long exposure to multiyear highs, and retail investors slowly but deliberately and consistently added to their investments in domestic equity funds. Meanwhile, a generational low in interest rates took 10-year yields to 1.60% (as recently as early May), as investors grew confident that the Fed would be bond buyers ad infinitum. By late May, I was so concerned that I sold out of all the equities I purchased back in 2009 at or near the generational bottom.