Saturday, June 20, 2009

John Mauldin - one of my favorite Commentators

From John:
This Time is Different*

"I have often written that the four most dangerous words in the investment world are "This Time It's Different." If memory serves me, I have written several e-letters disparaging various personages who have uttered those very words, and gone one to confirm later that it wasn't different. It almost never is. And yet - and yet! - I am going to make the case over the next few weeks that it really is different this time, with only a lonely asterisk as a caveat. What prompts my probable foolishness to tempt the investing gods is the rather large amount of bad analysis based on unreasonable (dare I say lazy or surface?) readings of statistics that is coming from the mainstream investment media and investment types with their built-in bias for bullish analysis. Normally, gentle reader, your humble analyst is a paragon of moderate sensibilities, but I have been pushed over a mental edge and need to restore balance. I anticipate that this topic will take several weeks, as trying to cover it all in one sitting would exhaust us both. It should be fun....we are on a track that looks far more like the Great Depression than the recessions of our lifetimes. To expect a normal recovery cycle, whether it is corporate profits or lending or consumer spending or capital investment or (pick a category) is just not reasonable. This is a period that is fundamentally, in so many ways, different. And the recovery (and there will be one!) will also be of a different warp and woof throughout the entire world economy...The asterisk on "This Time It's Different*"? Human nature hasn't changed. We are still driven by fear and greed. The business cycle has not been repealed. Free-market capitalism will get us back (with a few new rules of engagement). What's different will be the nature of this recovery. All the other eternal truths will remain."

From Me:

Finally, the phrase - "Too Big To Fail" yes our economy is too big to fail - and the requirement to restore growth is to eliminate the "waste:" unnecessary spending, using of credit, greed, planning and spending without really planning, Etc. ALSO - the speed of time in our lives and conditions cannot allow "the lapse of Recession/Depression" to happen - it is mathmatical and probable that this recovery will be called a Miracle - the government is doing the right thing by throwing money at everything (it's what we do - buy a problem away - it has worked every time and it will work now) What about the future cost. We live for now - the future will take care of itself - as it has in the past.

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