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Global equities continue to recover

Yesterday, according to Bloomberg, the market capitalization of the world's equity markets reached a new post-recession high of $56.2 trillion. That's up 120% from the March 8, 2009 low, for a gain of over $30 trillion. Those brave enough to own equities over the past four years have seen their wealth increase by more than $30 trillion. 30 TRILLION dollars.

Four years ago, markets were priced to something akin to Armageddon. The world financial system was on the verge of collapse, and almost 60% of global equity market cap had gone up in smoke in just over a year. Credit spreads were priced to wholesale bankruptcies. The global economy was widely expected to be in a depression/deflation for years. Global trade had collapsed: U.S. exports had fallen 25% in the previous 8 months. U.S. vehicle sales had dropped by over 40%. Housing prices had plunged by a third.

Today, instead witnessing the ruin of the-world-as-we-knew-it, we fret that the U.S. economy is experiencing its weakest recovery ever, and that the Eurozone economy is still in a mild recession. Governments everywhere are struggling to impose austerity measures, and the focus of central banks is shifting to how they will exit Quantitative Easing, not whether they should do more. We've come a long way in just four years.

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