Graphics: Yogesh Kumar / Mint

Incidentally, Barry Ritholz of the Big Picture blog has drawn attention to the fact that the market cap to GDP ratio of the New York Stock Exchange together with Nasdaq has crossed 100%. This had happened twice before: during the dotcom boom and during the housing bubble. What it indicates is that the US market is back to bubble territory.

It’s true that the very lax liquidity conditions could propel the market cap to GDP ratios to new heights. But as Citigroup Inc. ex-CEO Chuck Prince learnt to his cost, you cannot bank on a bubble.

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