Bull
March
11, 2002
'Our stock market never suffered a bear market'
A
month ago Treasury Secretary Paul O'Neill was pleading with congress to
raise the nation's $5.950 trillion debt ceiling or else the U.S. government
would run the risk of encountering isolated closures by March. Back then
Mr. O'Neill readily admitted that September 11 had caused a 'recession'
and that this 'recession', in part, explained why there was the need for
a new debt ceiling.
Last week, with a new record in debt already achieved, Mr. O'Neill said
'our economy never suffered a recession.'
Source: Fallstreet.com
Bare
Two
year wealth losses continue to be highly significant and are second
only to the massive losses incurred after the 1929 crash. Clearly, wealth
losses were at least partially responsible for the economic depression
that followed in the early-1930's. That current wealth losses are not
a major consideration in the prognostications of economists and strategists
is likely a manifestation of complacency at best and utter ignorance
at worst. Total stock market capitalization has declined by at least
$5 trillion since the March 2000 peak and represents nearly half the
country's GDP. It was not until 1932 that losses were worse than they
are now. The inside truth is that the financial industry does not want
you to know and continues to cheer on the long term mantra.
We are somewhat encouraged by our present economic resilience and believe that a similar worst case scenario to the 1930's will not necessarily play out, nevertheless, we see every reason why the damage done to wealth and confidence will lead to a protracted and deep secular bear market at the very least.
The wealth already lost will likely remain lost for at least several years to come.
