Letter from the stock markets to the sceptics: "I may be high, but I'm not crazy." Caution, this thread may not age well, but I didn't really write it :).

~Thread from a twitter economist.

They world is in one of the biggest crisis since the 2nd world war, but the stock markets seem to be on a relentless upward move. They appear completely divorced from reality. Really? Probably not. Here are reasons why the markets may be euphoric, but aren't crazy or stupid.

a) Lot of liquidity provided by central banks to rescue failing businesses - globally. Central banks and governments buying all kinds of securities including junk bonds directly!

b) Much of the western world is in the arena of 0 or negative interest rates, and anything which moves (above 0 returns) looks tasty enough to be eaten (bought)

c) The Sensex is just around 10% up from its January levels - so not really frothy territory (if you were to ignore the epidemic)