While as I continue to profess, I remain open to all possibilities, the popular (in some circles) notion that once we get more money flowing into the hands of market participants, amid what is an historic halting of economic activity, the equity market will miraculously rise and begin discounting a return to robust economic growth is, in my humble opinion, a most premature notion.

Of course I don’t deny that there’ll be some truly impressive rallies to come, in fact that’s one prediction I’ll go on the record as making, but the idea that a mere month of stock market pain, and perhaps the unraveling of some of the incredible leverage in the global system (operative words being “perhaps” and “some of”) is enough to set the next great bull market on its course, well, at this point defies the probabilities.


Here’s John Kenneth Galbraith on access to money and speculation:

“…people will always speculate if only they can get the money to finance it. Nothing could be farther from the case. There were times before and there have been long periods since when credit was plentiful and cheap—far cheaper than in 1927–29—and when speculation was negligible.”

Below is last weekend’s video on why the Pavlovian (after a long bull market) “buy the dip” impulse can be very dangerous during early-stage bear markets.

Personal note: While our focus herein is on economics and markets, know that you and your families are in our thoughts and prayers during these uncertain times…


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