Too early to be optimistic

Wolfgang Munchau explains why the economic recovery might take much longer than anticipated, and why it is too early to be optimistic.

All is down to the several crisis that are happening in the same time: property, credit, banking, food and commodities. And they are all happening while saving rates are at historical lows and the fiscal policy is quite constrained.

He also points out that usually, property downturns last as long as their preceding booms. Yet, this time it might last longer, as the previous boom overshoot quite a lot. Read the whole article on the FT.

The question is, if this is what’s on the menu for the next foreseeable future, how is possible for the stock market to remain this strong?