david levy_

Does 2009 Bear an Uncanny Resemblance to 1938?

what is amazing to me is that the financial media loves to call markets (real estate/stocks/etc.) a "new paradigm" when extending to new highs. Somehow "...it is different this time..."

but, when markets tank, the same media loves to draw everything in the light of history. the favorite, these days, is to compare the current economic environment and state of financial markest to those of the 1920's -30s. this is as ridiculous as calling a peak a "new paradigm."

the nature of industry and technology bears very little if any resemblance to that of the 1920s. even if one argues that, although the landscape is different, human behavior repeats, he/she still cannot discount the drastic change in the velocity and magnitude of information. whereas news would spread and markets would react over months and years in the early 20th century, today, what once took months and years might now take minutes, hours, or days.

drawing comparisons from a century ago in order to try and predict the future completely discounts the effect of instantaneous information which we all now enjoy.

imho
-dl