Appreciate the RiverbedDecember 21, 2009 Posted by: Joe Morgan, CFA
Over the river and through the woods
To grandmother's house we go
The horse knows the way to carry the sleigh
Through white and drifted snow!
It's been over two years since the extendible commercial paper issued by Ottimo Funding Ltd. extended — something it was never supposed to do. Though we can continue to debate the beginning of the "recession," the extension of this paper in August 2007 — the first such extension in the 12 years of the market's existence —marked the beginning of our economic downfall, although the debate continues as to the beginning of the "recession."
Though at times events seem to have moved rapidly, to me it's felt more like a slow-motion, downward spiral, like when something unavoidable and tragic is about to happen and everything seems to go in slow motion. People who've been in auto accidents know what I'm describing.
Many commentators like to describe the recession in alpha form — will it be a V, a W or the dreaded L? Because letters are so puny in size I don't believe they do justice to the length of our current economic fall.
Instead, envision crossing a riverbed. Normally, there is a downward slope, then a relatively flat portion to cross before a steep, upward slope. Today, it seems as though we've come down one side and are on the flat riverbed bottom. However, we can't really see the other side, we don't know how far away it is, and we are concerned, yet hopeful, about what lies between here and the upward slope.
Today, I'd like to take a breather from our economic stress and in the spirit of the season list the economic factors for which I am thankful. There are really too many to count, but for me these are the easiest and most obvious.
I am thankful for Federal Reserve Chairman Ben Bernanke who has always been a devoted student of the Great Depression, and obviously used those lessons to help us avoid a second version thus far in our journey across the riverbed.
I am thankful for President Barack Obama's leadership in crisis, including the commitment to renominate Ben Bernanke as Fed Chairman in January....Read More