“Though Wall Street gurgles an audible “goodie, goodie, goodie” at every prospect of Fed intervention, it would be best for the Street to collectively put its big-boy pants on and realize that economic growth is not something that the Fed can sprinkle out of Ben Bernanke’s cans of fairy dust.
“At the point our nation recognizes that the pattern of repeated bubbles, crashes, and misallocation of capital is not solved by the Fed but is instead caused by the Fed, it will become clearer that the best path to economic recovery is to shift attention toward debt restructuring, real investment, useful infrastructure, and the creativity and work ethic of real human beings. Until then, we will have an economy built on speculation and paper, stacked into a flimsy house of cards.”
– John Hussman, Weekly Market Comment
Dr. Hussman’s full comments are definitely worth a read this week as he puts to rest a number of questions regarding an imminent downturn, the Greek race toward default, the probability of recession and those “sticky” profit margins. You can access his weekly comments here. After reading them this morning, I opened a package on my desk which contained additional reading material for the week – our friend Francois Trahan’s new book, The Era of Uncertainty. The dedication alone assures it will be a practical resource rather than Wall Street gurgle. It reads, “To Ben Bernanke . . . thanks for the material.”
I’m sure we’ll have more to share on this one as I make my way through it.