But there are clear signs of an overshoot on the upside - an 'echo bubble'. Sensible analysis of stock prices for instance suggests that after the run-up of recent months, markets are clearly overvalued. A recent rash of IPO's (NHPC, Adani Power, Oil India), follow-on offers and QIP's (Axis Bank) and large bond issues can be seen as a return to business as usual.
Investors are also tired of talking about the macro issues. That's understandable given the return of a modicum of stability to markets. Yet the things that keep people awake at night are still the big macro concerns:
- Is the US consumer going to pull back further?
- Is a continuing downturn in commercial property going to undermine the credit recovery?
- Are bad things still lurking in the banking system?
The fact is that the foundations of a recovery are scarcely in place, yet the optimists are already looking for the lift to the new skyscraper's observation deck.
