Hussman Weekly Market Comment: Extraordinarily Large Band-Aids
A dollar spent by the government is always a dollar taken from somebody and diverted from some other activity. The only question is whether the dollar spent is more productive, or satisfies a more desperate human need, than the alternative activity would. If not, the spending is hostile to economic growth and public welfare. There is no free lunch. At best, what people call "stimulus" can only occur if the dollars spent by government are more productive than they would have been if they were allocated privately. I cannot imagine how allocating public funds to the same reckless stewards of capital that made the bad loans in the first place can possibly be a productive use of capital.
All of this would be fairly moot if it we were simply talking about 2008 and 2009. However, my impression is that as the effects of last year's surge of deficit spending taper off, we will begin to observe a more accurate and generally flat reflection of underlying economic activity.
- Links
FT interview with Google co-founder and CEO Larry Page (LINK) Related books: How Google Works, In The Plex Henry Blodget sits down with Clay Christensen (LINK) Related books: HEREHussman Weekly Market Comment: Losing Velocity: QE and the Massive Speculative...
- Hussman Weekly Market Comment: Restoring The "virtuous Cycle" Of Economic Growth
Link to: Restoring the "Virtuous Cycle" of Economic GrowthIn a healthy economy, the productive activity of one sector opens a vent for the productive activity of other sectors of the economy. The useful allocation of resources in one area of the...
- Hussman Weekly Market Comment: The Recklessness Of Quantitative Easing
Risk without benefitDespite the probable lack of measureable benefits, further QE poses significant risks. It has already triggered a steep decline in the exchange value of the U.S. dollar, and threatens a destabilization of international economic activity,...
- Hussman Weekly Market Comment: Greek Debt And Backward Induction
Thursday was a fascinating day in the market, featuring a 20-minute span in which the Dow moved from a loss of about 300 points to a loss of nearly 1000 points and then back again within a span of about 15-20 minutes. While the decline and recovery was...
- Hussman Weekly Market Comment: Bernanke Sees A Recovery - How Would He Know?
Ben Bernanke (like Tim Geithner and his predecessor Hank Paulson), shows no hesitation in diverting the real resources of the American public to defend and compensate the bondholders of mismanaged financial companies who made reckless loans and who should...