We’ve taken note of excessive optimism and leverage (see, as examples, “The Rising Tide of Liquidity” and “More Signs of a Toppy Market“). Now the European Central Bank is also sounding cautionary notes. Ever since Alan Greenspan’s famous “irrational exuberance” observation produced a 140 point (then 2%) fall in the Dow, central bankers have been […]
Read more...We’ve commented from time to time on loose credit conditions (see our “Rising Tide of Liquidity“, plus Part 2 and Part 3 on the same topic) and indifference to risk (“Where Has the (Perception of) Risk Gone?“). The tide may be turning. Today, the New York Times had a lengthy, well researched article, “Tremors at […]
Read more...We have pointed out various signs of complacency in financial markets regarding risk: declining credit spreads (January 16), a lack of concern about systemically high use of leverage (previous post plus January 18), and technical indications that suggest we are near a stock market peak (January 22). Yet there is an almost irrationally high level […]
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