Comments on: Nota Bene #17

By: jeff

jeff — Tue, 08 Apr 2008 23:58:50 +0000

Jim, This market correction and unleveraging is a walk in the park compared to the Panic of 1857 when the stock market fell by 50% in one day, and there was virtually no money at all to borrow. Anecdotal stories relate that interest rates during the panic went to 1500% for call money. Inflation was running at 30% per month for a 5 month period. The naysayers that complain about our national debt should study their history. The Civil War experienced the highest debt/GDP of any time in history. The government actually borowed 1.875 billion dollars(in 1861 dollars) to finance the war, and the first issue of bonds was at 12%. Subequent refinancing of that debt was at 9% and 7.25% Our debt relative to GDP is miniscule compared to those times. There could, and should be a recession, as recessions are a necessary part of the economic cycle. How severe it is, is anyone’s guess. However, the stock and bond markets are predicting a soft landing. The interesting thing about the stock market is that it’s had an upward drift of 9% per year, average, for the past 125 years. There should be some good bargains in the stock market in the near future, or maybe right now. There’s good bargains in the bond market right now, as some yields are approaching 21%, if one knows where to look. I always liked the old saying,”Buy when there’s blood in the street, and sell when the trumpets are blowing.” Very sensible advice. While I don’t see a depression in the cards, we could easily see a 1970′s type of economic malaise. Assuming that 1970′s style malaise is a possible scenario, one could easily adjust one’s portfolio to reduce the risk, and possibly make a few bucks.

Jeff

By: Jim Booth

Jim Booth — Tue, 08 Apr 2008 13:09:26 +0000

Great stuff, Russ. Especially that piece on Bill and the wrath of Hillary. As for Great Depression II: The Sequel – I think we’re already there. We just haven’t realized it, yet.

By: Russ Wellen

Russ Wellen — Mon, 07 Apr 2008 20:14:12 +0000

Thanks, Elaine. Hadn’t seen that.

By: Elaine

Elaine — Mon, 07 Apr 2008 18:23:50 +0000

Meanwhile…

http://en.epochtimes.com/news/8-4-7/68746.html

I wish they would leave marine life alone. Also, if a dolphin wants to communicate he’ll let you know.

By: Russ Wellen

Russ Wellen — Mon, 07 Apr 2008 16:16:37 +0000

Dr. S: No proof yet, apparently. Even if true, cause to start WWIII?

Dr. D: Thanks. Hope you don’t think I’m intruding on the bull’s turf by also using quotes. (I’ve always had a soft spot for quotes. That’s one reason I’m one of QB’s biggest fans.)

By: Dr. Denny

Dr. Denny — Mon, 07 Apr 2008 15:39:50 +0000

Nice work, Russ. Quotabull takes off its hat to this NB!

By: Dr. Slammy

Dr. Slammy — Mon, 07 Apr 2008 13:53:14 +0000

This Petraeus assurance that those weapons were Iranian – is that anything like Cheney’s assurance that the Iraqis had WMDs? Or am I just being difficult?