Not so fast now - the recovery process
I was a bit suspicious of the current rally in the stock market. A little bit too soon and too fast.
It seems that I keep excellent company -- Dr. Nouriel Roubini is saying the same thing.
From
Bloomberg:
Roubini Says Stocks Have Risen ‘Too Much, Too Soon, Too Fast’
New York University Professor Nouriel Roubini, who predicted the financial crisis, said stock and commodity markets may drop in coming months as the gradual pace of the economic recovery disappoints investors.
“Markets have gone up too much, too soon, too fast,” Roubini said in an interview in Istanbul on Oct. 3. “I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year.”
Stocks have surged around the world in the past six months as evidence mounts that the economy is emerging from its deepest recession since the 1930s. The Standard & Poor’s 500 Index has soared 51 percent from a 12-year low in March while Europe’s Dow Jones Stoxx 600 is up 48 percent. The euphoria contrasts with the cautious tone of Group of Seven policy makers, who said after meeting in Istanbul over the weekend that prospects for growth “remain fragile.”
“The real economy is barely recovering while markets are going this way,” Roubini said. If growth doesn’t rebound rapidly, “eventually markets are going to flatten out and correct to valuations that are justified. I see a growing gap between what markets are doing and the weaker real economic activities.”
Baby steps -- gotta take baby steps now. It's not going to get better for a few years at the very least.
Posted by DaveH at October 4, 2009 6:22 PM
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