TURNING JAPANESE - THE AUDACITY OF REALITY

[PSPS]

TURNING JAPANESE - THE AUDACITY OF REALITY
by James Quinn
January 28, 2009

Every day seems worse than the previous day. Five hundred thousand people are getting laid off every month. Our banking system is on life support. Retailers are going bankrupt in record numbers. The stock market keeps descending. Home prices continue to plummet. Home foreclosures keep mounting. Consumer confidence is at record lows. You would like to close your eyes and make it go away. Not only is the news not going away, it is going to get worse and last longer than most people can comprehend. The Great Depression lasted 11 years, but the more pertinent comparison is Japan from 1990 until today. A two decade long downturn has a high likelihood of occurring in the United States. There are many similarities between the U.S. and Japan, but in many areas the U.S. has a much dire situation. If the next decade resembles the Japanese experience, there will be significant angst and social unrest.

The talking heads on CNBC were almost unanimously predicting a second half recovery for the economy in the 1st week of January. Most of these people manage money and only earn money if dupes invest their hard earned dollars in their funds. Their analytical case for predicting recovery is that it was so bad last year that it has to go higher in 2009. This is what passes for analysis on Wall Street. The market is already down 7% in four weeks. These “experts” fail to see the big picture and have no sense of history. It took 28 years to get to this point and it will take at least a decade to repair the damage. If the politicians running this country try to take the easy way out (very likely), add another decade to the recovery timeframe. Some indisputable facts will put our current predicament in perspective:

Read the rest at http://www.financialsense.com/editorials/quinn/2009/0128.html

[DJ13]

1. You do realize that article is just a hit piece on Obama's bailout I hope?

[terisan]

2. I think Quinn is engaging in Honesty. Truth hurts but best to not bailout big banks. nt