Human Nature Always Rhymes

“Watching the world’s central bankers and finance officials grappling with the current situation—trying one thing after another to restore confidence, throwing everything they can at the problem, coping daily with unexpected and startling shifts in market sentiment—reinforces the lesson that there is no magic bullet or simple formula for dealing with financial panics. In trying to calm anxious investors and soothe skittish markets, central bankers are called upon to wrestle with some of the most elemental and unpredictable forces of mass psychology.”

The above aptly describes the immense challenges global central bankers are presently “grappling with.” 

Thing is, it’s from Liaquat Ahamed’s highly-touted book Lords of Finance: The Bankers Who Broke the World (just started it, so far so good) and was written in October 2008.

While of course the current bear market may indeed (let’s hope) turn out vastly different than the last, nevertheless — as history sometimes rhymes, and human nature always does — the above, among other things (particularly the enormous leverage throughout the global system coming into this one) should help you appreciate why we’re in no hurry to get growthy right here. As, at the time the above was written the ’08/’09 bear market had ~6 months left to run and much lower levels to take out.

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