Can anything pop the everything bubble?

For a certain type of investor, last year came as a relief. True, the losses were grim. But at least markets were starting to make sense. Over the previous decade, central banks had pumped out floods of new money to buy bonds. Interest rates were kept unnaturally low, or even negative. The result was an “everything bubble”, a speculative mania in which valuations surged everywhere from stocks to housing to baffling crypto assets. It was never going to end well, and in 2022 it didn’t: inflation killed off cheap money; the everything bubble popped; asset prices plunged. Some were even approaching rationality. A return to reassuringly dull investing—based on fundamentals, not hype—beckoned.If this sounds familiar, and you were one of these relieved investors, you may have found yourself wrong-footed by developments over the past few months. It is not just stockmarkets, though both in America and globally they have risen to within striking distance of all-time highs. It is that risky assets across the board have proved astonishingly resilient to seemingly disastrous news. An index of American high-yield (or “junk”) bonds compiled by Bank of America suffered a peak-to-trough loss of 15% in 2022. It has since recovered half that loss. So has a similar index for junk bonds in Europe. The housing slump already shows signs of , even though global prices have fallen by just 3% from their peak, or 8-10% adjusting for inflation, after a boom in which they rose at their fastest rate ever.