Tom Petruno has written a lengthy article for the L.A. Times regarding the nasty nature of this recession and the scar it has left on investor’s and consumer’s psyches.
This certainly doesn’t feel like a recovery to most people. The U.S. economy has grown for five straight quarters, but a CNN/Opinion Research poll in late September showed that 74% of Americans thought the recession still hadn’t ended.
Petruno quotes Barry Ritholz, who predicted trouble (maybe a little too early). Ritholz refers to those he calls the “zombie bears”:
“They will not admit the economy is getting better, albeit slowly,” Ritholtz wrote this week on his widely read economics and markets blog, The Big Picture. “They insist the recession was a depression; they insist it never ended. These are the bears who cannot be killed. They will stay bearish, regardless of the data that all but insists otherwise.”
….
In the economy and markets, “People are afraid that every little dip is going to be a collapse,” Ritholtz said.
Petruno also quotes John Hussman, head of the $9-billion Hussman Funds:
“The worries about things falling apart stem from the sense that we haven’t really fixed anything.”
While he says it makes no sense for the U.S. government to impose austerity measures on the economy at this stage of the recovery — the route that Europe is taking — he still believes the Fed’s policy is “reckless.”
Even so, Hussman said, “I’m not expecting the economy to fall off a cliff,” in part because of the corporate sector’s financial strength. “Many companies’ balance sheets are liquid; they can handle a lot of pain,” he said.
Michael Pento, senior economist at Euro Pacific Capital is quoted:
“We need a deleveraging, deflationary depression, and in three to five years we’re going to have a much better economy, we just have to go through hell in the meantime.”
SMA Comment: Some in our economy will go through a lot more hell than others. I’ve never seen so many poor souls on street corners begging for money in my life. The investment bankers who concocted the schemes to fleece homebuyers and were bailed out by the government and Fed have not been subject to the hell they inflicted upon many sub-prime borrowers.
Source: L. A. Times
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Tom Petruno has written a lengthy article for the L.A. Times regarding the nasty nature of this recession and the scar it has left on investor’s and consumer’s psyches.
Petruno quotes Barry Ritholz, who predicted trouble (maybe a little too early). Ritholz refers to those he calls the “zombie bears”:
Petruno also quotes John Hussman, head of the $9-billion Hussman Funds:
Michael Pento, senior economist at Euro Pacific Capital is quoted:
SMA Comment: Some in our economy will go through a lot more hell than others. I’ve never seen so many poor souls on street corners begging for money in my life. The investment bankers who concocted the schemes to fleece homebuyers and were bailed out by the government and Fed have not been subject to the hell they inflicted upon many sub-prime borrowers.
Source: L. A. Times
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