Jim Grant: “From Bear to Bull” – WSJ 9/19/09

[davelj]

Interesting take on things. Jim Grant has historically been labeled a perma-bear, so his newfound bullish stance is worth considering. I happen to disagree with his conclusion here, but I tend to agree with most of what he writes. Anyhow, it’s interesting because it’s a variant position.

http://online.wsj.com/article/SB10001424052970204518504574420811475582956.html#articleTabs%3Dcomments

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[EconProf]

Jim Grant has a long and envied reputation of being right. His lengthy article is detailed and persuasive. Most of all, I like it because it is well-grounded in history and facts.
One of his key points relevant to today’s cycle is that the bigger the fall, the bigger the recovery. He doesn’t quite promise a v-shaped recovery, but comes close to it. His point that the decline contains the seeds of the recovery is compelling. Those seeds today include inventory replenishment, bargain-hunting at today’s lower prices, and fiscal and monetary stimulus.
It is getting harder and harder to argue this economy has another leg down what with the stock market bounce-back, the clear green shoots in the housing market, and the repair of credit markets evidenced by narrowing spreads.

[EconProf]

Jim Grant has a long and envied reputation of being right. His lengthy article is detailed and persuasive. Most of all, I like it because it is well-grounded in history and facts.
One of his key points relevant to today’s cycle is that the bigger the fall, the bigger the recovery. He doesn’t quite promise a v-shaped recovery, but comes close to it. His point that the decline contains the seeds of the recovery is compelling. Those seeds today include inventory replenishment, bargain-hunting at today’s lower prices, and fiscal and monetary stimulus.
It is getting harder and harder to argue this economy has another leg down what with the stock market bounce-back, the clear green shoots in the housing market, and the repair of credit markets evidenced by narrowing spreads.

[EconProf]

Jim Grant has a long and envied reputation of being right. His lengthy article is detailed and persuasive. Most of all, I like it because it is well-grounded in history and facts.
One of his key points relevant to today’s cycle is that the bigger the fall, the bigger the recovery. He doesn’t quite promise a v-shaped recovery, but comes close to it. His point that the decline contains the seeds of the recovery is compelling. Those seeds today include inventory replenishment, bargain-hunting at today’s lower prices, and fiscal and monetary stimulus.
It is getting harder and harder to argue this economy has another leg down what with the stock market bounce-back, the clear green shoots in the housing market, and the repair of credit markets evidenced by narrowing spreads.

[EconProf]

Jim Grant has a long and envied reputation of being right. His lengthy article is detailed and persuasive. Most of all, I like it because it is well-grounded in history and facts.
One of his key points relevant to today’s cycle is that the bigger the fall, the bigger the recovery. He doesn’t quite promise a v-shaped recovery, but comes close to it. His point that the decline contains the seeds of the recovery is compelling. Those seeds today include inventory replenishment, bargain-hunting at today’s lower prices, and fiscal and monetary stimulus.
It is getting harder and harder to argue this economy has another leg down what with the stock market bounce-back, the clear green shoots in the housing market, and the repair of credit markets evidenced by narrowing spreads.

[EconProf]

Jim Grant has a long and envied reputation of being right. His lengthy article is detailed and persuasive. Most of all, I like it because it is well-grounded in history and facts.
One of his key points relevant to today’s cycle is that the bigger the fall, the bigger the recovery. He doesn’t quite promise a v-shaped recovery, but comes close to it. His point that the decline contains the seeds of the recovery is compelling. Those seeds today include inventory replenishment, bargain-hunting at today’s lower prices, and fiscal and monetary stimulus.
It is getting harder and harder to argue this economy has another leg down what with the stock market bounce-back, the clear green shoots in the housing market, and the repair of credit markets evidenced by narrowing spreads.

[temeculaguy]

I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj

The problem is the topic, by writing an opinion somewhat against the grain, many readers will ignore the style because they disagree with the content. I did like the overiding theme, that value sells and pendulums swing but skies don’t fall.

The whole thing reminded me of a poem/story about overeacting to every incident in a vacuum, that events are not always what they appear to be, that there is opportunity in bad fortune and risk in good fortune.

http://www.inspirationpeak.com/cgi-bin/stories.cgi?record=31

Like Econprof, I find it hard to disagree with him, it’s a a cogent argument, albeit a big picture view. I do think, that regardless of the size or speed of the recovery, if it even arrives at all, we as a people will be slightly different, slightly more frugal, having experienced the depression of our generation. I’m not so sure that’s a bad thing.

[temeculaguy]

I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj

The problem is the topic, by writing an opinion somewhat against the grain, many readers will ignore the style because they disagree with the content. I did like the overiding theme, that value sells and pendulums swing but skies don’t fall.

The whole thing reminded me of a poem/story about overeacting to every incident in a vacuum, that events are not always what they appear to be, that there is opportunity in bad fortune and risk in good fortune.

http://www.inspirationpeak.com/cgi-bin/stories.cgi?record=31

Like Econprof, I find it hard to disagree with him, it’s a a cogent argument, albeit a big picture view. I do think, that regardless of the size or speed of the recovery, if it even arrives at all, we as a people will be slightly different, slightly more frugal, having experienced the depression of our generation. I’m not so sure that’s a bad thing.

[temeculaguy]

I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj

The problem is the topic, by writing an opinion somewhat against the grain, many readers will ignore the style because they disagree with the content. I did like the overiding theme, that value sells and pendulums swing but skies don’t fall.

The whole thing reminded me of a poem/story about overeacting to every incident in a vacuum, that events are not always what they appear to be, that there is opportunity in bad fortune and risk in good fortune.

http://www.inspirationpeak.com/cgi-bin/stories.cgi?record=31

Like Econprof, I find it hard to disagree with him, it’s a a cogent argument, albeit a big picture view. I do think, that regardless of the size or speed of the recovery, if it even arrives at all, we as a people will be slightly different, slightly more frugal, having experienced the depression of our generation. I’m not so sure that’s a bad thing.

[temeculaguy]

I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj

The problem is the topic, by writing an opinion somewhat against the grain, many readers will ignore the style because they disagree with the content. I did like the overiding theme, that value sells and pendulums swing but skies don’t fall.

The whole thing reminded me of a poem/story about overeacting to every incident in a vacuum, that events are not always what they appear to be, that there is opportunity in bad fortune and risk in good fortune.

http://www.inspirationpeak.com/cgi-bin/stories.cgi?record=31

Like Econprof, I find it hard to disagree with him, it’s a a cogent argument, albeit a big picture view. I do think, that regardless of the size or speed of the recovery, if it even arrives at all, we as a people will be slightly different, slightly more frugal, having experienced the depression of our generation. I’m not so sure that’s a bad thing.

[Author]

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