Irrational non-exuberance

Cheap and easy, this one.

May 9:

World stock markets finally expunged the memories of one of the worst bear markets in history yesterday when they surpassed the levels reached ahead of the collapse of the dotcom bubble in 2000.

May 13:

London's financial market suffered its worst day of trading in more than three years as stock markets across the globe responded to fears that accelerating inflation will lead to a hike in interest rates.

London's leading FTSE 100 index experienced its worst day since March 12 2003, the day war broke out in Iraq, as investors moved to take profits amid fears the market has reached its peak.

This was a situation mirrored around the world, with the French CAC 40 down 2.1pc, while Germany's DAX fell 2.3pc. National indices declined in all 17 western European markets.

In New York, the Dow Jones Industrial Average - which fell 141.9 points on Thursday - was 69 points lower at 11431 in afternoon trading...

'course, they could (and quite probably will) bounce back again on Monday - but cheery articles that the worst is over, happy times are here again, etc etc, are wide of the mark. The contradiction between soaring hard primary commodity prices, and flat or even falling manufactured output prices, is becoming pressing.