The bubble without any fizz

USUALLY, when asset prices boom, people get excited. As America’s stockmarkets scaled wild peaks in 1929 and 1999 they did so amid feverish enthusiasm. Search for such euphoria on Wall Street today and you will come back empty-handed. Look at underlying numbers, though, and it is at first hard to see why. Over the past 136 years the cyclically adjusted price-earnings ratio (CAPE), a useful measure of how expensive stocks have become, has reached its current heights only twice before: during the dotcom bubble; and just before the Crash of ‘29.

Why does this remarkable surge not spur frantic enthusiasm—or for that matter deep trepidation? One reason is that in most market bubbles you can point to a particular type of asset which is seeing its price rise inexorably: tech stocks in the 1990s; houses in the mid-2000s. Today, though, America and much of the rest of the world are amid a bull market in almost everything: stocks, bonds and property are all strikingly expensive compared to long-term averages, and getting more so. When everything is going up, things are less exciting, and perhaps less worrying.