The 'business cycle' of expansion and contraction is obviously visible in history and has reasonable macroeconomic explanations, and it's expected to continue.
People try to predict the timing of it (which is hard because acting on these predictions often alters reality so that they're less likely to come true), and they definitely try to ensure that recessions aren't long and hard and that the economy can recover from them faster, but nobody is saying that they can prevent a recession, and the interventions which can artifically postpone a recession (i.e. postpone a correction of some market) would generally only make the recession much worse when it happens.
It is less the assumption that the market always goes up (eventually) and more the lack of mathematical comprehension.
1987 saw a massive market crash with no recession.
This is the most hated bull market ever. None of the experts are buying heavily into this market (it's all stock buybacks that's driving this market up).
So, you can see why everyone is uneasy about these extremely high PE ratios.
What index are you looking at? SP 500 is at about 23 [0] which while higher than median, is definitely not at all time highs.
Not really. Recessions are where there is less spending and production, not when the stockmarket goes down.
While stockmarkets and property prices and the like to tend to go up and up in nominal terms a lot of that is because of the currency they are denominated in losing value through inflation. If you adjust for that there is much less of an uptrend.
When you take the logic to such extremes, it becomes a meaningless statement. It's literally impossible to disprove this assertion if you just ignore the evidence that says it's not true. Japan is absolutely a counterexample.
Isn't the world economy built on the idea that markets will always go up? Every year should be an all time high, otherwise we're in recession which is (apparently) tragedy to be avoided at all costs, no?