Daily Investment Interpretations
January 11, 2009
2009-1-11:
Update: Paul Krugman has just
published two more "news bites" dealing with the
prospects for a second Great Depression. The first of these, Permanent
Link to A scary analogy, quotes Mark
Thoma, who likens the stimulus package to driving up an icy hill. If
you don't tackle the hill with enough initial momentum, you risk sliding
back down before reaching the top.
To me, this drives a ten-penny nail into the coffin of
the existing Obama stimulus package, and indirectly, into the economy and
U. S. stock markets. Better no stimulus package at all than one that fails
to slay the bear. Of course, they're probably making it as large as they
think they dare.
The second news bite, Permanent
Link to Specifics, addresses the demand for specific solution
suggestions from Paul Krugman. His response: he doesn't have the inside
information that he would need to offer specific solution suggestions.
In the meantime, I've received an email warning from
The Motley Fool that a huge rally is coming. Am I/are we in the right
stocks? (For $169, they'll keep us in the right stocks for the next two
years.) And the Cabot Top Ten Report can be ours for two years for $174.
It will also make us buckets of money. (These sound like much better deals
than the offers that cost $995 a year, or the offers that run $4,995 a
year.) So who's right: Paul Krugman, et al, or these investment advisors?
Many financial pundits may be basing their
interpretations of what's happening upon their experiences with normal
markets and normal recessions. The big question is: is this going to be
the longest recession since the Great Depression, but at the same time,
just a V-shaped recession that will end this year, with a stock market
that saw its bear market bottom last fall, or is it going to drag on? I
think real caution is still indicated.