AN EXCENTRIC INDEX MAKES A COMEBACK
[Latest Global Dollar Liquidity Measure: +13.4% annual growth rate; latest Endogenous Liquidity Index: -28.2%]

I still remember this piece from the May 1996 issue of The Economist: "The erection index (a humorous look at the relation between the size of the largest skyscrapers and world stock markets)". If I remember well, the author opined that bear markets always followed the erection of the largest skycrapers. The piece was written before the official inauguration of the Kuala Lumpur Towers on October 1, 1996. Six months later, a devastating bear market took hold in Asia, eventually creating the conditions for both the Russian default and the LTCM collapse in the second half of 1998.

Judging from this new piece, the erection index is bound to make a ... spectacular comeback! In Shanghai, a "topping-out ceremony" recently took place for the world's third-tallest building -- the 101-storey, 492-metre Shanghai World Financial Center. But there's more. Here's the Foreign Policy blog: "For sheer absurdity, though, nothing tops Burj Dubai, already the world's tallest building at an estimated 545.7 meters" (see the photo taken last Friday).

As Cassandra would say, all of this surely "just smacks of classical overconfidence" (*).

(*) According to Bloomberg TV this morning, the construction of the Shard Tower in London has been suspended.