In recent weeks financial markets have relied on to the “green-shoots” thesis, rising smartly as an array of statistics turned out to be less dire than expected. Policymakers, too, have begun to sound less pessimistic.

Optimism may be fashionable, but there are plenty of reasons to fear it is premature.The danger is that too much emphasis on the stock cycle misses the underlying characteristics of this downturn. This is mainly a balance-sheet recession precipitated by a financial crisis. And it is a downturn that it is unusually synchronised around the globe.

Recoveries from globally synchronised recessions take 50% longer than other recoveries as an analysis in the IMF’s new World Economic Outlook makes clear.

Banks worldwide have written down their assets by $1.1 trillion. The final tally is expected to be double that or even triple !! The pain is only now starting to spread through commercial property and commercial loans and banks have been the “cheerleaders” of this ” green-shoots” theoretic recovery.

Maybe too much hope…