Thomas J. Gordon

Lessons from a Market 'En Fuego'

Macro... I am well aware of debt and have written many articles on it. Some of them early on before a lot of other people were talking about it. Here is one of them: seekingalpha.com/artic... . Like you, I am appalled at the governments clumsy, keynsian, astronomical spending. I have been asking on a lot question on interest rate boards how the gov't can spend so recklessly and we see so few bad effects. debt to gdp has been over 250% for 15 years. Why just in fall 2008 did the train come off the tracks? My personal opinion is the financial panic of 2008 was unnecessary. Only a few companies got really over extended. Those companies (bear, leh, wamu, countryiwide, fnm/fre) are gone and the rest of us can move on. The market worked, housing prices dropped a 1/3 in a fairly short period of time. So maybe we aren't facing great depression II here and the stock market can be worth 10k on the dow.

Lessons from a Market 'En Fuego'

People with laugh but I believe that markets reflect available information. If the dow was at 14k it is not inconceivable to me that it could be reasonably priced at 10k. People are emotional and they all paniced out of the stock market up to March 2009. If the market recovers to 30% below where it was I don't know why that would be called irrational optimism. There are computers now that track available infomation better than was previously possible. I don't know why everyone believes we have to have a peak to trough drop in the dow of 90% like we did in the depression to be rational or squeeze out the excess speculation.