Wall Street, DC, and the New (Dangerous) Financial Euphoria

Talk about premature exaltation.

I spent last week in New York and Washington, speaking with many erstwhile Masters of the Universe and those charged with cleaning up the mess they've created. And in both cities I was stunned by how many Wall Street and political insiders were ready to break out the champagne. Forgive me if I keep the bubbly on the shelf.

The insider consensus seems to be that the worst of the hard times is behind us and that the economy is back on track. Or at least on track to be back on track.

Not even the latest employment stats showing that another 539,000 Americans had lost their jobs dimmed the enthusiasm. Call it The New Financial Euphoria.

Only it's not really new. When I was interviewing Eliot Spitzer last week on Squawk Box, he recommended a book called A Short History of Financial Euphoria by John Kenneth Galbraith, and over the weekend, in between running into more cases studies in financial euphoria, I gave it a read. Kudos to Spitzer, because the book couldn't be more apt to what we're facing today.