More Things Change, More They Stay the Same
Posted by Larry Doyle on September 7, 2011 11:05 AM |
Having traversed a wide part of the country over the last three weeks, I would have hoped that my first post back here at Sense on Cents would encompass a sense of vim and vigor that may electrify those reading this.
Sorry to disappoint but the simple fact is the recent developments along our economic and market landscape do not strike me as energizing or as anything new.
The daily swings in the markets may be unnerving but they strike me as merely a reflection of the fact that the “walking pneumonia” which defines our domestic economy—and many parts of the global economy as well—is settling ever deeper into our lungs.
Is that a sense of despair, resignation, or a combination of the two that is wafting over our land? This reality is to be expected when a steady stream of misrepresentations—if not outright lies—is delivered by pols, analysts, and financial executives with little remorse. The misrepresentations may be delivered in the hopes of “keeping the game going” but little appreciation is given to the fact that a betrayal of truth, transparency, and integrity comes with very real costs. We are paying those bills now and will be for the foreseeable future.
What about the economy? A languishing labor market is regrettable but not surprising in light of the ongoing debt which crushes the demand for credit which drives growth and jobs. No surprise or anything new there as well.
What about housing and the massive suit brought by Uncle Sam against 17 major financial institutions? Does anybody doubt there was real fraud ongoing for a protracted period in the origination, underwriting, and securitization of large parts of our mortgage market. I have written previously that these activities likely constituted a violation of the Racketeering Act.
Are we supposed to totally look the other way when our basic rules of capitalism are abused so heinously because our banks, markets, and economy may suffer in the process. Are you kidding me? Burying the truth does not help reconstruct an economic foundation that is fundamentally broken.
How about the Federal Reserve? Are there any tricks left in Ben’s bag? The Fed may think it can implement a “twist” in the management of its balance sheet but I ask you just how much has QE1 and QE2 done to promote growth and jobs. Not much, right!! Ben and team are running out of ammo.
Yes, regrettably we have not seen much good news over the last three weeks. I do not foresee it getting any better over the next weeks, months, or year either. Our ‘walking pneumonia economy’ will be with us for a while. We need to adapt as best we can. The more that the markets are manipulated, the longer will our pain last.
Very simply, we continue to suffer from many economic, financial, and political ills of our past. These ills, which collectively encompass and define our “walking pneumonia economy”, are not easily remedied. While our recovery period will likely be long and painful, I can assure you what will not help. What is that?
The diatribe and vile spewed forth by labor leader Jimmy Hoffa this past Monday. Class warfare is NOT the answer. In fact, class warfare of the kind promoted by Hoffa and seemingly welcomed by our President will only further embolden those on the other side of the aisle.
What is THE answer? A consistent and persistent pursuit of our prized virtues of truth, transparency, and integrity which define the essence of ‘sense on cents’.
I hope you are all well.
I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.