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A return to prosperity

As we start the new year, we can give thanks for the very impressive comeback in equity valuations that has played out over the past 21 months. The capitalization of global equities is now only 16% shy of its all time high, which occurred in late 2007, and just over double what it was at that awful bottom in early March 2009. A full recovery to the 2007 high will add $10 trillion to global market cap, and I see no compelling reason to think it won't happen within the next year or two. Two years ago, financial markets were all but convinced that the global economy would be mired in a deep, deflationary depression for the next several years at least. Fortunately, the future turned out to be a whole lot better than what it was supposed to be.

Mark Perry has some related comments here.

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