That the environment changes is a given. It is never stable. It wasn't when the "new economy" was the rage, and it isn't stable when the "bear" is all the rage.
I don't, and haven't, compared apples and oranges anywhere. However, one thing that is consistent is the manner in which business cycles play themselves out. There are always similar threads and strings to them.
This one is remarkably similar to 1929. The problem is, there are so many areas where you can't compare (trade, equity ownership of general population, general wealth and disposable income), it is impossible to say anything is absolute.
Except for how economics and markets work. We know that, and we know they are in constant flux. Knowing how a market works is not a guarantee of success, but it goes a long way to helping that success occur. Especially if you know where to look for market failures.
1929 was the best example of pure market failure due to overregulation and underinvolvement of the Fed.
The question becomes - what will be the catalyst for market recovery (tax and interest rate cuts?) or market collapse (extraordinary debt levels and frighteningly low levels of savings?).
Japan is screwed and will remain screwed until they fix their banking system. In the US, we've got a tetch of the flu, but it isn't bad yet. Unless our politicians are remarkable dunces (which they have shown a proclivity toward), it is unlikely that this will be anything more than a mild setback...possibly not even a classic recession.
The big bull of the last 10 years is dead, that is true. But the long term bull of the last 100 is not.
Growth remains everywhere. Sometimes it just needs to take a breather. |
