Markets are trading high alright

Lately markets have seemed manically euphoric. For those of us taking sober measurements prices seem pretty crazy here. Most of the independent veterans who are risk managers rather than traders are voicing scepticism and concern about a gapping disconnect between economic reality and soaring prices over the past few months. But so far the falling US dollar is continuing to incite a panic-like speculation in most other assets, pretty much across the board. Where and when this wild ride end will end is everyone's guess at the moment.
A couple of weeks ago Pimco manager, Mohamed El-Eran caught media attention with his assessment that world markets were now trading on a liquidity injected sugar high that would eventually fall hard.
In a similar theme, we read with some amazement this morning a Bloomberg story on rampant cocaine abuse in London's financial district.
“…medical experts say [it] is rampant in the City, London’s financial district. It’s a habit that often goes hand in hand with heavy drinking. Junor says he and his mates wanted to maintain the thrill they felt at work as they poured into the Square Mile’s pubs and clubs after a day of getting high on finance.
“It’s the same rush from doing a deal and doing cocaine,” Junor, 45, says. “The adulation from doing a deal spills into going for a beer and then a party — it’s an amorphous blob of energy.” Everyone knows about the City’s drug problem, recovering addicts say. Bosses turn a blind eye to drugs, as long as you’re making money for your firm — and until recently, making big money was easy to do.”
See Cocaine Survivors Losing London Bonus See End to Bubble’s Binge: for a lengthy account of the problems.
Gee I wonder if London is an anomaly in this abuse, surely drug use is not rampant among traders and finance types in other major cities in the world? So much for omnipotent markets setting rational prices… No wonder some of us are not seeing the math here, we've been trying to make these assessments straight…