The mantra is maŋana
No... the mantra is marIjUana. It's how I learned to stop worrying, and enjoy the 'global bubbles' [giggle] Leigh On 5/1/07, Jim Devine <[EMAIL PROTECTED]> wrote:
[valid?] > Contrarian Chronicles 4/30/2007 12:01 AM ET > Bad news: This bubble is worldwide > > Money printing by virtually every central bank on the planet has created a > synchronized global boom, gobs of speculation and complete disregard for > risk. This will make the downturn uglier. > > By Bill Fleckenstein ... > Grantham eyes ill global winds > > Meanwhile, it would appear that the manic > psychology and bubble-like speculation in our stock market is perhaps a > global phenomenon. I don't consider myself an expert on world markets, but > Jeremy Grantham, chairman of global fund manager GMO, is someone who is. He > made that point April 23 in a Financial Times story called "A Global Bubble > Warns Against the Stampede to Diversify." Driving the stampede are big > institutions, such as state and local pension plans and endowments, that > need to make more money, which causes them to take more risk (as the > downside seems to be completely ignored these days). > > Says Grantham: "The coincidental move to greater risk-taking more often than > not reinforces the diversifying move." In other words, if enough people have > the same idea, it works, no matter how outlandish or dangerous it may be. He > goes on to make the point that "the new global money flows have probably > created the first truly global bubble, almost everywhere in almost > everything." > > He says that when we look back, this will probably come to be known as the > "Private Equity Bubble." He observes that, perversely, the private-equity > deals have caused the "outperformance of inefficient companies that are > conducive to improvement by the acquirers." In other words, companies that > are doing poorly have seen their stock prices improve, relative to > better-managed companies, because they're more likely to be acquired. > Lastly, he notes the danger in this process: "If profit margins, which are > at record highs everywhere, regress as usual, then many deals leveraged to > the hilt on peak margins will be in trouble and diversification will have a > very high cost." > > The mantra is maŋana > > To sum this up, money printing in the past several > years by virtually every central bank on the planet has created a > synchronized global boom and, with it, gobs of speculation and complete > disregard for risk. The fact that our economy is slowing down due to the > housing bubble's unwind is immaterial at the moment, though it will become > material. > > In the perverse way of markets, folks will probably only worry about > economic weakness after enough debt has been piled on corporate balance > sheets to make the downturn even uglier than it would have been otherwise. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
