As the pragmatic conservative economist Herbert Stein once said, "If something cannot go on forever, it will stop." I've been thinking about that saying a lot in relation to today's bull market and the complacency with which investors seem to view it. The VIX, or fear index--which measures investors' expectations of volatility in the stock market--is at its lowest ebb since 2007, before the financial crisis. Prices for all sorts of assets, even things like junk bonds, are soaring in a way that would seem to indicate blue skies over the global economy.
How is this possible, given that we barely...