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Contributor / President of the Finance Foundation
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Stock exuberance vs economic feebleness. Place your bets

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05/06/2013 | 03:33pm CEST

All the stock indexes are on the up with no sign of slowing down.

Stock exuberance vs economic meltdown and in certain countries, moral despondency.
Record unemployment, stagnation, protests of insatisfaction, of misery or doctrine. 
This contradiction happens often. Stock investors have the feeling that the future is brighter than the present, that underground fluxes are becoming positive and that the contradictory and unfounded chatter of politicos no longer means anything. 
Thus armed with this positive forward-looking vision, they invest on the stock exchange. Companies are inexpensive, they suddenly gain plus 12% in a month. Despite the bad news, everyone wants to believe in it. 
It's enough that for one month, job creation in the States be on the up, for all the world's stock brokers to start putting money into the pot again. 
'Incoherent' comes the learned observation of certain economists. No matter, it does a morale good and after all, who knows, maybe a wallet too. 
And if more money is invested into the real economy and in company shares, more they can construct and develop thus creating jobs. 
So, bravo to the stock exchange ! 
But careful, the higher you go, the harder the fall. 
You're going to think I'm incoherent. It's true, but hardly more or less than the markets.


Michel Gabrysiak
© The Finance Foundation 2013
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