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Markets can stay frothy longer than you can stay… sceptical?

Summary:
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...

David Keohane
(Spending some time as FTAV’s Bombay wallah. Noticeably sweatier but not much else has changed.) David studied economics, politics and journalism before joining the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012. In between his degree and masters he wandered into the real world of business where he learnt how to manipulate a spreadsheet and organise meetings where nothing gets decided.

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