This Goldilocks economy, where conditions were neither “too cold” nor “too hot”, had – as a side effect – masked the gradual build-up of financial imbalances. Hence, while lending and risk-taking experienced rapid growth, words of warning by central banks and other institutions were largely disregarded on the basis of “this time, developments are surely different from the past”.
Aside from the question of whether stock prices will rise or fall, it clearly would be unrealistic to look for a continuation of stock market gains of anything like the magnitude of those recorded in the past couple of years.