The problem is the pessimism doesn't seem to extend to the...

The problem is the pessimism doesn't seem to extend to the markets, where the assumption seems to be now baked in that central banks and governments will always ride to the rescue. The SPX is currently about 6.7% off its high after a rally of 113% from GFC lows, that is more like a teensy bit of profit taking than a mad panic that the market is going off a cliff.

On one hand I agree that there is too much economic pessimism (particularly wrt to the US), but possibly too much optimism that the markets are going to be continuously be flooded with easy money. In a sensible world you can't have it both ways, economic improvement should lead to stimulus withdrawal. Of course I could be wrong about the way individual decision makers will act under pressure. Even Glen Stevens has caved in despite apparently having very positive data. Next week's FOMC meeting may be the last chance for them to act before the election - a market moving meeting no doubt.