Hi Mohan,
Thanks for the link and your thoughts on the US economy. Certainly I can't say your analysis (and that of the redoubtable Ms Cohen) is any less valid than my own. My own ursine posture is based mainly on historical measures of valuation and my denial of "new eras". But of course we are now in a "new era" in at least one respect: We have never before had such a stretching of valuation as we now have. This frankly scares me because of my eerie d‚j… vu experience, having lived through those go-go sixties and those gloomy seventies. But I have said that before.
Speaking of loans which cannot be paid, credit and currency crises in Asia, etc, Jim Grant (permabear and publisher of the eponymous Grant's Interest Rate Observer, 30 Wall St., NY 10005) continues to predict a bad ending for markets. He bases this (so far wrong) prediction on "excess capacity in the business of creating credit". In his just-received issue, he lambastes lenders searching for the extra basis point and ignoring the risk. One of his observations: "Countrywide Home Loans, the main subsidiary of Countrywide Credit Industires...will begin making home loans to bankrupt borrowers."
Is this a great country, or what?
Jack |
