Wednesday, July 07, 2010

John Hussman - Quote of the Day

I heart Hussman:

"By all appearances, Ben Bernanke has a four-second tape in his head that says "We let the banks fail during the Depression, and look what happened." Then the tape repeats. There is no subtlety that says, "yes, but we let the banks fail in the most disruptive and disorganized way possible, forcing them into piecemeal liquidation as Lehman had to do. Today, the FDIC is fully capable of preserving and transferring the operating entity while properly cutting away the failing bondholder and stockholder liabilities so that depositors and customers are not affected." This understanding would prove useful in the event we observe further credit strains."



Eric said...

I read this this morning and thought, "man I hope someone else finds this humorous as I do".

Glad to see I'm not alone and can't wait to hear about the rest of your Vegas trip.

Onlooker said...

Hussman is the best. I know he gets a lot of hate these days cause he missed out on the rally, and it has been a real bad play on his part. But he's obviously a great economist and doesn't deserve the perma bear label he's gotten pegged with.

He'll be vindicated in the market before this secular bear is over, and all those who chased performance with the likes of Bill Miller, et al (or just bought and held index funds, no matter what the valuation), will wish they'd entrusted their IRA money to John instead.