The crises of the middle east, europe, and Japan have been mere hiccups for the financial markets in 2011. Now is a time of seemingly eternal optimism which is fueled by ever growing earnings expectations. The atmosphere feels much more akin to 2006 than a world emerging from the second worst recession in 100 years. The VIX got spooked when Japan experienced the 4th worst earthquake the world has witnessed since 1900, but very quickly recovered from the event:
- Oh, I guess Fukushima is not a big deal…
I am not overly pessimistic, but I guess I would like to see more cautionary optimism rather than outright exuberance. The emerging markets are letting off the easy money accelerator and the US federal reserve is only beginning to contemplate how to pull back the massive amount of liquidity they have pumped into the markets. We have yet to see if the global economy can stand on its own feet, so it seems a bit early to celebrate like it is 2006…
