The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

A better perspective . . . ?

03/21/2020

Every profession has its own professional association, and every professional association has conferences, where some professionals gather in the bar during the evenings.  Gray-headed professionals often snicker at the innocence of younger professionals, especially if they are not there.

When gray-headed investment strategists gather in the bar, the classic “put-down” used for absent younger strategists is . . . “yeah, and I’ll bet he thinks its different this time” and everybody laughs knowingly.

Grayheads remember the 1972 recession as due to the “oil shock”.  They remember the sudden 1987 collapse as due to “portfolio insurance” – a flawed strategy.  They remember the 2001 tech crash as due to the irrational buying frenzy of tech stocks.  (Tech lovers are now an established religion?)  Grayheads remember the 2008-9 Great Recession as due to reckless investment in the financial sector.  Gray-headed strategists think they have already seen it all.  Well, this grayhead thinks it really IS different this time . . . at least, different in the modern era . . . at least, different during the lifetime of any living investment strategist.

The worst worldwide natural disasters were the 1918 Flu Pandemic, when fifty million people died, and the bubonic plague or “Black Death”  that also killed fifty million people during the 14th century.  Of course, those were times before we understood virus containment . . . or the economic tools we now have.

Now, please note that 1918 Flu Pandemic did NOT cause the Great Depression in 1929.  Yes, this pandemic is terrible, but it is “child’s play” compared to other disasters.  We will survive!

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