US stocks are a good example of fallibility and reflexivity at work

THE continued outperformance of stock markets around the world, led by Wall Street, has been a source of wonder, and possibly awe among many investors. In the early part of this year, it was easily explainable because there was a "reflation'' theme to bank on, one that replaced the "easy money'' push that came from zero interest rates and massive amounts of central bank money printing that started in 2009 when crooked US banks collapsed and threatened to take the global financial system down.

Reflation in turn had …