Monday, September 14, 2009

Why Bubbles Will Likely Continue

Since this crisis started, I have stressed that we've taken no real long-term steps to repair our financial system, but rather put a band-aid on it. You can't cure a problem involving excessive leverage by more borrowing. The Pragmatic Capitalist has a post out that can cover it better than I could, so I'll just refer you there for the rest. Keep in mind, even if what this analysis says is true, it doesn't mean stocks are doomed. Stocks will always be forward looking and can dislocate from economic reality, for awhile at least. Eventually, things will balance out. Oh, and now is not a great time to start slapping tariffs on Chinese goods. Just throwing that out there.

1 comment:

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