We’ve heard concerns about market froth before but Deutsche’s Mikihiro Matsuoka thinks it’s time to actually get worried as central banks appear serious about unwinding their monetary accommodation.With our emphasis:Stock market capitalization in the developed countries as a percentage of GDP has already approached levels very close to previous peaks recorded in 2000, 2008 and 2015. We believe that the financial markets seem to have entered frothy territory (even if not being in a bubble). In the first place, we would never know if this is a bubble until it bursts. The reason we believe it is entering frothy territory is that an eventual turnaround of monetary policy after a long period of post-GFC accommodation is under way in major developed countries, which in our view, raises the
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We’ve heard concerns about market froth before but Deutsche’s Mikihiro Matsuoka thinks it’s...