Buiter: Europe is in a bubble....

[raspberry-blower]

More irrational market behaviour falls under the spotlight:

Citi chief economist Willem Buiter – who has maintained a pretty bearish tack on the euro zone throughout the euro crisis that has plagued the continent in recent years – is out with his latest missive.

In a note to clients titled "New and old risks in the Euro Area," Buiter says that the big rally in European equity and bond markets in recent months "can be only partially explained by economic fundamentals, and most of it represents a bubble driven by ‘positive contagion’."

Buiter explains: "Much of the improvement is driven by liquidity, unprecedentedly low safe nominal and real interest rates, an increasingly frantic ‘search for yield’, unrealistic expectations about what policy will be able to deliver and other forms of irrational optimism and exuberance"
]Article in full

[Little John]

You know what, I'm sick of reading about the pontifications of these self-aggrandising economists. Most of them know little more than the rest of us, in reality. Most normal people I know, when asked what they feel about the current political mood-music of the EU crisis setting down, tell me it sounds like so much bullshit.

All this fellah is doing is saying the same thing dressed up in some fancier language. These bullshitters just stick their finger in the air, see which way the wind is blowing, and then proceed to try and convince the rest of us they know something we don't.

In other words, on the way up, the are tons of the buggers coming out with sage-like pronouncements after-the-fact that are predicting massive profits to be made here or there. On the way, down there are loads of them after-the-fact telling us the world is ending tomorrow. When the outlook looks a bit more uncertain, we tend to get a more even dispersal of each type of bullshitter.

They are basically like modern-day soothsayers, with every Tom, Dick and Harry hanging on their pronouncements.

It's pathetic.

Edit to add: I should say, RB. I'm not having a go at you personally...

[acman]

The figures from the eurozone re the economy point to a contraction, none of this will be a surprise to anyone on here, but it does amaze me that stock markets continue to rise, saw an interview recently where this was mentioned, the guy being interviewed said he'd been talking about this issue to some 'old school' traders, they too couldn't understand it, although it was mentioned that a lot of modern day traders hadn't seen a downside and didn't know how to react to such data.
I suppose the QE, (money printing), which has/is going on around the globe and being thrown at the financial industry must have something to do with it, people around me just haven't a clue what that means. When I hear them moan in supermarkets, energy costs, I say that's what happens when you print money, still they don't get it. Where & when it ends, or how more to the point, I don't know, I get a feeling TPTB aren't sure either, seems to me things are really spiraling out of control.
Regards, acman.

[emordnilap]

Looked at simplistically, there are at least two seemingly totally separate economies operating - the real one, where you earn a few quid and spend it on grub or rent etc - and the stratospheric one, where all the electronic money flies around.

Trouble is, they want us at the bottom to fund both.