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.