Why it’s different this time

The charts cited in Nice chart: 1980 vs 2009 are enough to tell you that there is something different. Activity is not all that bad but asset valuation stinks. Craig Brown provides seven more reasons answering the question about Why Is This Recession Different?.

Consumers won’t come to the rescue as they are paying down debt and reducing spending. There is no sweet spot as everything seems to be losing value. The pattern of spending more than you make by leveraging loans coupled with a stagnant increase in actual income will require adjustments that hit not only consumers but also the financial institutions and much of the ingrained capitalization thinking.

Change is afoot and it is not likely the kind of change the politicians had in mind in the last election campaign speeches.

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