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"One would have thought that such a “what have you done for me lately” mentality would have been extinguished by the two crushing bear market lows of the past decade — 776 on the S&P 500 in 2002 and 666 in March 2009 — but the fact that people’s behaviour has not changed suggests that, sadly enough, we will ultimately have to endure, at some point in the not-too-distant future, another gut-wrenching experience for one only knows that we have actually tested the secular bear market low when the investor psychology has undergone profound change. I would have thought — it was hope in fact — that the return to classic Graham-Dodd investing for the long-term would have made a resurrection coming out of the housing and credit collapse. But when you have the Fed Chairman discuss openly the wonders of seeing the Russell 2000 index surge 30% in the time span of a few months, you know that speculative fervor and the magic of liquidity have come to once again dominate the investment landscape."
4 comments:
A few years from now the last two Bernanke speeches will haunt him to the end of time.
I think his call about unemployment not getting better will prove to be prescient though.
Agree on UE, though he is wrong about most everything else so it will probably be 2% by next October. His talking up the Russel index was especially apalling, to me at least. He was so glad it was up 30%. Why not 300%, would'nt that be better still?
It doesn't take a genius to see that unemployment in the US is now more or less'structural' -- i.e. it is not going to 'get better' -- not significantly, anyway. Not anytime soon, anyway.
The same is pretty much true of deficits.
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