It’s “Groundhog Day” in the markets, says John Authers in the Financial Times. US stocks “have spent three of the most exciting years in financial history” getting back to where they started. The S&P 500 is currently marginally above its level of exactly three years ago; on 3 October, its closing level was exactly the same as on 3 October 2008.
But that’s not the only reason this autumn looks worryingly like 2008. The main danger is that an uncontrolled Greek default could trigger a Lehman-style meltdown. As Buttonwood says in The Economist, “a further, worrying similarity” with the previous crisis is “the lack of a clear message from the authorities”.
Just as the US government rattled markets with its inconsistent approach (nationalising some firms but allowing a private-sector rescue for others), Europe’s leaders today can’t agree on anything. But the most ominous point lies in a major difference between 2008 and today. After three years of fiscal and monetary stimulus, policymakers have run out of ammunition to counteract another meltdown or recession.