I'm a Mega-Bull: Here's why.
I'm also a heretic and this is my heresy: "It IS different this time."
Yeah, we heard that in the irrationally exuberant 90s, just before the crash. And we've heard it many times before but the more things change, the more they stay the same.
So here's my case: Heads of state are not always rational (e.g., North Korea), but they usually are. They understand risk/reward analysis. If they want more power (they do), in the past they would often launch a war of aggression or oppress their own people. It was the easiest way, despite the risks, to increase (or defend) their own power.
Today the easiest way; the path with the least risk and the greatest reward; is to plug their nation's economy into the (U.S. led) global (semi-) free market economy. It's a no-brainer. Granted, anything with the word "free" in it carries big long-term risks for dictators and such; but (as they might say in China), we'll deal with that as we go.
Plus, their success is dependent on the continuing strength of the US economy. If we stop buying, they're screwed. Suddenly, every ambitious nation in the world has a big stake in seeing the American economy grow and prosper.
The world has never seen a state of affairs like this before. Never. That part, for sure, really IS different this time.
Result, an era of cooperation (however uneasy and suspicion-laden) between the nations of the world never before seen. Radical Islamic terrorists threaten to blow up Wall Street? It's the worst thing that could happen to China or Russia or even Saudi Arabia. Even if they don't have warm feelings toward us, they need us.
And as globalization continues, we need them. This historically unique spirit of cooperation will create a synergy that cause the S&P500 to outperform compared to it's averages of the 20th century (soon to be known as the neanderthal era of the stock market).
Eventually this trend may well lead to some ugly scenarios (multinational CEO's holding far more real power than elected officials, for example). But in the meanwhile; stuff like the Sub-Prime "crisis" will be blips. Stocks are the place to be.