Trusting Jeremy Grantham...visionary or cyclop leading the blind?
I have wanted to post this article for quite a while , but have held off on several occasions. Third quarter earnings, QE2 and a myriad of other factors have given me the opportunity to stall.
As I am myself, quite bearish on the economy long-term, I didn't really feel that a definitive 7 year hiatus from fiscal health and wellness was a position I wanted to promote any further.
That having been said, I have mentioned occasionally rooting for the bad guys in movies myself and have made peace with having some view me as a wannabee Dr.Doom.
Jeremy Grantham will be responsible for investing $100 billion over the next 7 years, so it is logical that he would advocate a sluggish recovery. After all, with all those Fiat Uno hundreds as your responsibility it is a wise move to advertise (s)lowered expectations.
But let's take a quick glimpse at Grantham's Top 10, keeping in mind that these are all problems which come as no mystery or breaking news to any of us. What does bare discussion and thought is what you can recall being done to address or improve upon any of the following issues:
1) Too much consumer debt; increasing savings rate leading to consumption decrease
2) Bank off-load of toxic trillions on to Federal Debt i.e. Tax-Payer's Shoulders
3) Failed stimulus, housing crash, 0 appreciation, confidence death
4) Undercapitalized/overleveraged banks
5) State/local government squeeze; 30% tax revenue drop
6) High (rising?) unemployment
7) Trade imbalances killing the dollar
8) Euro government crashes
9) Global currency confidence erosion, dollar specific
10) Aging populations, rising medicare, social security costs
For my part, I do feel that I am seeing some recognition of structural problems. I'm a pessimist by nature, but an optimist by choice and do not really believe that any party, corporation or special interest wants to see America in the toilet.
There have been some positive signals lately. The question remains...are those signals really addressing these ten pressing issues?
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