Are markets getting ahead of themselves?
PERHAPS America's politicians should commit economic self-harm more often.
Everyone feared that the $85bn in automatic spending cuts implemented by Congress this month after members failed to agree on a budget deal would hammer investor confidence.
But the news has instead merely bounced off the flanks of bullish financial markets, as the Dow Jones Industrial Average confirmed yesterday when the venerable index of 30 large companies breached 14,198 for the first time in its history.
The absence of panic while Republicans do their best to sabotage the economy through a combination of ideological zealotry and electoral calculation has to be welcomed. But is it entirely healthy?
In December 1996, when the Dow was at a relatively modest 12,194, the then Federal Reserve chairman, Alan Greenspan, warned against "irrational exuberance" among stock buyers who were then already ploughing into some dubious dot.com stocks. Some are wondering whether we might be seeing some similar irrationality now.
And not just in America. The FTSE 100 is at its highest level since before Lehman Brothers went bust.
The Bank of England Governor, Sir Mervyn King, has warned that financial markets might be getting ahead of themselves, noting that the enthusiasm of investors did not seem justified by the data emerging on the state of the real economy.
It's hard to disagree. But, then again, one of the objectives of the quantitative easing programmes that central banks have been engaging in is to lift share prices.
It's a little rich for central bankers to complain when their medicine seems to be working.