The Bubble in Optimism extends beyond Finance/ Shares/ Bonds/ Commodities

I hate to dampen anyone's spirits, but there is a huge amount of optimism doing the rounds at present. And that applies not only to shares, bonds, commodities and markets.

Here is how one colleague, who would also like to see a reform of the world financial system, describes the situation today: "As the financial meltdown continues to take its toll on real economies, it is leading to a much-needed world wide re-think of market fundamentalism."

I wish the financial meltdown was indeed leading to a re-think of market fundamentalism - and perhaps such a re-think might yet take place.

But to describe the financial meltdown as already leading to a fundamental re-think is, simply, premature.

Naturally, I agree that market fundamentalism is creaking a little around the edges. For example, there is at least some talk of counter-cyclical provisioning for financial institutions, and the necessity of regulating any institution (whatever it might be called) that behaves like a financial institution.

But these sorts of things hardly amount to a fundamental re-think.

In fact, all the ACTIONS that we have seen (printing more and more money, for instance) reinforce market fundamentalism.

The little that remains is simply TALK so far - though even talk is of course better than nothing.

We should always be optimistic that we CAN bring about change. However that must be combined with realism. We must not fool ourselves into thinking that change has already started.

There is a danger in counting one's chickens before they are hatched. And one must not be over-optimistic, even after they are hatched.

For doesn't another proverb say that there is many a slip between the cup and the lip? Sphere: Related Content