Some good big picture charts in this segment on US bonds, the Nikkei, and US housing and consumption index.
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Some good big picture charts in this segment on US bonds, the Nikkei, and US housing and consumption index.
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Think Cycles Not Endless Trends!
The favorite forecasting tool of economists and investors is to extend whatever are the current conditions and recent trends in a straight line into the future. I was reminded of that by an article in this week’s Bloomberg Businessweek magazine, which began with the following;
“The U.S. economy remains almost comatose . . . The current slump already ranks as the longest period of sustained weakness since the Great Depression . . . Once-in-a-lifetime dislocations . . .will take years to work out. Among them: the job drought, the debt hangover, the defense-industry contraction, the banking collapse, the real-estate depression, the health-care cost explosion, and the runaway federal deficit.”
The article then discloses that was Time magazine’s analysis of the economy in its September, 1992 issue, when the Dow was at 3,390, and the economy was still struggling to pull out of the 1991 recession.