I like his comment about whether this is a “bubble” or “normal cycle”:
Q. Is this a bubble bursting, or just a natural, cyclical easing after a decade of grand performance?
A. It depends on what you mean by the latter vs. the former. If you think the late ‘70s run up in prices was a bubble, and the late ‘80s run up was a bubble, then this is a bubble bursting. The same market characteristics that defined the cooling starting in 1979 and 1989 are what we are seeing today. If you think that what we have seen in the past is just a normal cycle, then this is a normal cycle.
Words like “bubble”, “correction”, “soft landing”, and so on are used so often so vaguely that they don’t have almost any meaning anymore. Thornberg is right: what happened in the early ’90s is going to happen again, whatever words people choose to use for it.
