Tuesday, December 23, 2008
Early Recovery. I always hesitate to predict the future, since no one can really see into the future, but I think the people who expect the current economic crisis to persist for years, perhaps even a decade, are wrong. I think that once the new President takes office, consumer and market confidence will be restored pretty quickly, especially if Obama takes decisive steps to outlaw all of the useless "derivative" financial instruments that have caused devastation to the financial markets, forbid bait-and-switch mortgages (BSM's, now called "ARM's", for "Adjustable Rate Mortgages"), demand needed changes in management personnel and policy at the auto companies, etc.
If Obama takes the bull by the horns and ends the days of laissez-faire, Wild West days on Wall Street, we can expect to see the stock market back to its September levels by June 2009.
As we have seen in the last three months, there is no such thing as "real" value — not of real estate, nor stocks, nor bonds, nor gold, nor anything. All is belief. If we believe the sky is falling, we will make it fall. If we believe that better times are ahead, we will create better times ahead. It's all a matter of confidence in the future, and a new President — practically any new President, after the disastrous Bush years, but especially a black President who ushers in a new age — should produce new confidence in the greatness and resiliency of the United States. Lest you think that to be mindlessly nationalistic, the whole world is waiting for the U.S. economy to bounce back. If it does not, no other country nor group of countries will restore prosperity to the planet. If it does, other economies will follow suit. So to "What's good for General Motors is good for the USA", let us add, "What's good for the USA is good for the world", and get on with regaining the confidence that alone will restore the economy — of Planet Earth.
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