RWER issue 57: Steve Keen2
The Return of the Bear
Far be it from me to underestimate the stock market’s capacity to pluck the embers of delusion from the fire of reality. However, the crash in prices and explosion in volatility that began in late July 2011 may be evidence that sanity is finally making a comeback. What many hoped was a new Bull Market from the depths of the 52% crash from October 2007 till March 2009 was instead a classic Bear Market rally, fuelled by the market’s capacity for self-delusion, accelerating private debt, and—thanks to QE2—an ample supply of government-created liquidity. The 85% rise from March 2009 till April 2011 was enough to restore Wall Street’s euphoria, but still fell short of the 110% rally needed to restore the 2007 peak.
You may download the whole paper at: http://www.paecon.net/PAEReview/issue57/Keen2-57.pdf