The rationalizations for this bubble are much different when compared to the Internet bubble. Back then, valuations didn't matter. This time, most of the speculation is in so-called value stocks that have had their earnings inflated by cheap credit, especially the financials.
The brokerages, in particular, have been bailed out continually by the government and seem to be playing the credit bubble aggressively.
... We think that there's a big correction ahead for the brokerages.
~ Kevin Duffy, Bearing Asset Management, "Setting a Course With Bearing Asset Management," Motley Fool, April 11, 2007, by Matt Koppenheffer