Not exactly paradise

Share prices are certainly exuberant. Up to the end of last week, they had risen 17.5% in 2006, according to Dresdner Kleinwort. After a few more good days, more indices are flirting with all time highs. But is this a rational exuberance? At first glance, shares might look like a better deal than bonds, commodities, real estate and credit risk, all of which are selling at prices that are hard to justify or to reconcile. What’s more, shares don’t look terribly expensive. Even after increasing ab...