[quote=Mickey Levy]Let’s consider the magnitude of existing imbalances and extrapolate recent trends.[/quote]
Someone correct me if I’m wrong, but didn’t we get into this mess when too many people in 2003 and 2004 extrapolated recent trends and then made prediction based on those extrapolations? Doesn’t that warrant serious doubt about the whole concept of extrapolating recent trends to make predictions? Is it too much to ask that we might actually learn from our past and stop repeating the techniques that didn’t work before?
And if people are going to continue to extrapolate from recent trends, then doesn’t that blow a hole in his argument that things will bottom when fundamentals make sense? Wouldn’t it be reasonable to believe that if people are going to continue to extrapolate from recent trends that we will blow right past fundamentals and overshoot to the downside?
