All this wild optimism leaves me puzzled. It seems to be like a meme, a contagious idea that has infected the mind of almost everyone in the investment world. And I keep wondering; how long before this meme leads them to disaster.

You really hit the nail on the head there Ron. This is irrational exuberance at its most extreme and it certainly is contagious. The level of complacency out there now is absolutely staggering, as that level of manic optimism makes people fearless - it makes them discount, or ignore entirely, the obvious risks they are facing. However, a consensus that extreme is ususally indicative of a trend reaching exhaustion. If everyone is bullish and has acted (ie placed their bets) accordingly, who is there left to buy into the upward trend in order to sustain it?

When the greatest speculative fool has already committed himself, then the trend will reverse, and will probably do so sharply. As the reversal picks up speed (as it will because fear is a much sharper emotion than hope or greed and therefore spreads much more quickly), the downturn will begin to feed on itself just as the upswing has done. IMO we are very close to the point of reversal, although the prevailing optimism makes such a forecast seem incredible at this point.