{"text":[[{"start":6.24,"text":"A couple of months ago, warning about a bubble in the world’s most important stock market was largely the preserve of oddballs and attention-seekers. Uttering the B-word is the financial markets equivalent of shouting “fire” in a crowded cinema, and it is generally used sparingly."}],[{"start":28.08,"text":"But as with so many aspects of life in 2025, it turns out you can get used to pretty much anything. And all of a sudden, the warnings are coming from all sides. The whole point of financial stability reports is to warn about stuff that might go wrong in the future but probably won’t. Even so, the latest missive from the IMF last week was bracing."}],[{"start":54.62,"text":"“Valuation models show risk asset prices well above fundamentals, raising the risk of sharp corrections,” it said. “Markets appear complacent as the ground shifts.” Investors and policymakers should be alert to the prospect of “disorderly” corrections and the potential for self-reinforcing doom loops, where a loss of confidence in the sustainability of government debt whacks the bond market, which in turn whacks risky assets priced for nirvana, which in turn hammers the banking sector, both traditional lenders and shadow banks that are locked in an embrace of “increasing interconnectedness”. The Bank of England struck a similar tone, noting the risk of a “sharp market correction”."}],[{"start":107.25999999999999,"text":"These things are extremely precisely worded. When such august institutions talk of valuations “well” in excess of observable reality, and of “sharp” or “disorderly” corrections, they are very much switching on the fasten-your-seatbelts sign."}],[{"start":126.79999999999998,"text":"In the private sector, heavy-hitters are also urging caution, including JPMorgan’s Jamie Dimon, who observed that “you have a lot of assets out there which look like they’re entering bubble territory”."}],[{"start":141.89999999999998,"text":"In sum, bubble talk has broken confinement. Investors are already talking about what they may be able to salvage from it when it bursts. And still, markets are humming along just fine. This is not complacency, as such. That implies a lack of awareness about the horrors lurking in the darkness. It is more of an explicit decision to ignore the obvious potential downsides and carry on regardless. If one more fund manager recounts to me the adage about Chuck Prince and the need to keep on dancing while the music is playing, I swear I will scream. I wouldn’t mind, but they do know how that ended and they are not being ironic."}],[{"start":187.08999999999997,"text":"It is worth, therefore, climbing inside the mind of the eternal optimist. It’s a beautiful, happy place. "}],[{"start":195.92,"text":"The foundation of this worldview is an unshakeable belief in the rescue squad — a sense that if markets do get seriously tricky, for any reason, the cavalry will soon arrive, in the form of large interest rate cuts or even asset-purchase schemes from central banks. Investors, both professional and retail, have become accustomed to this ever since the great financial crisis of 2008."}],[{"start":229.29999999999998,"text":"Policymakers are keen to stress that the bar for emergency intervention is high, but investors are happy to call their bluff. This does not apply only to the US, of course. One of the reasons why French government bonds are not in meltdown, despite a string of downgrades from rating agencies in response to France’s political dysfunction, is the alphabet soup of rescue mechanisms cooked up by the European Central Bank in the region’s debt crisis a decade ago and bolstered as recently as 2022."}],[{"start":268.53999999999996,"text":"The moral hazard is extreme here, but investors know full well the ECB would step in to douse any emergency in French debt, just as US authorities would prevent regional banking wobbles from getting out of hand and tackle any seriously wealth-destroying plunge in stocks."}],[{"start":289.02,"text":"This underpins one of the most successful strategies in stock markets: buying the dip. In fact, some investors and analysts tell me they would be happy to do this more often, if only more dips occurred. One popped up in recent days, after Donald Trump embarked on one of his frequent but fruitless ratcheting-ups of trade tensions with China. Measures of market anxiety swept higher and stocks took a hit. Investors were more than happy to lap it up."}],[{"start":326.27,"text":"“This is the kind of dip we’ve been waiting for,” enthused the multi-asset team at HSBC. “We aren’t negligent of risks,” the analysts note. “We aren’t massively concerned though.”"}],[{"start":340.10999999999996,"text":"This happy-go-lucky attitude has, without doubt, been a winning strategy for the past six months, and we still appear no closer to the spell breaking. Fortune favours the cheerful, whatever the policymakers say. "}],[{"start":365.99999999999994,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1761175357_5397.mp3"}