Sunday, May 17, 2009

Herding animal spirits to revive the economy


Since hitting bottom in early March, the world's major stock markets have all risen dramatically.

Some, notably in China and Brazil, reached lows last fall and again in March, before rebounding sharply, with Brazil's Bovespa up 75 percent in May compared to late October 2008, and the Shanghai Composite up 54 percent in roughly the same period.

But the stock market news just about everywhere has been very good since March. Does this suggest that the world economic crisis is coming to an end? Could it be that everyone becomes optimistic again at the same time, bringing a quick end to all our problems?

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