Brave New World

Just like before, but in fast forward 22/10/2009

Following the cheering on Wall Street that surrounded the Dow breaking 10,000 (yet again) a slew of articles have been published warning that the current rally, not only in equities but in credit markets, is purely a function of the extraordinary amounts of central bank denominated liquidity. As it was pre-Lehman, or at least pre- August 2007, optimists actually believe the current boom in asset prices reflects a return to strong fundamentals. This time the rally is faster, sharper and sprinting towards an inevitable correction. The other difference is that when the bubble does burst, policy-makers will well as truly have run out of bullets. Here are two of the better articles/posts I have come across recently. Wolfgang Muncheau believes that the countdown to the crisis is already underway. Gillian Tett feels a sense of foreboding.