The global risk rally has taken equities to their highest level since August 2008, just before investment bank Lehman Brothers collapsed and almost pulled down the Western financial sector.
The MSCI World Index closed on Tuesday at 1,316.7. Commodity prices continue to climb, with copper being a star performer. And the dollar fell to an eight-week low, as money was pulled out of the global safe haven currency by investors who are now less jittery.
There are signs that the world economy continues to limp back to normalcy. Zero interest rates in the US, Japan and Europe make risk attractive.
But the rich economies continue to be under stress, with slow growth, high inflation and public finances in a mess. Yet, hubris is back in the West. A combative CEO of Barclays has said that the time for apologies from banks is over. Ah well! Let’s see what happens when the music stops this time around.