Thursday, September 18, 2008



Yet another quick blog entry that had its genesis in a response to an e-mail query, this one from my nephew and Godson, who combines the keener aspects of the Quinn family intellect with a work ethic that seems to have skipped a generation, certainly in the case of his uncle and Godfather. Given that he shares his uncle’s cynical nature, he wondered if “this is not as unprecedented as everyone is saying.”

My response:


Under normal circumstances, you would be right. "Veterans" of the financial business who have been advising people on their money for as long as, in some instances, five years, usually deem things "unprecedented" when an analogous situation seems like it took place yesterday to those of us who have been around awhile.

HOWEVER... This is unprecedented (well, except for 1929). The S&Ls in the early '90s weren't nearly this big. LTCM was a hiccup. '87’s stock fall was larger: over 40% top to bottom, and we're nowhere near this; at last night's close, the S&P was down 26% from its 2007 high. So, from the perspective of the drop in the stock market, this is not unprecedented. But the depths of the underlying financial problems are far deeper than any we have seen since the late ‘20s/early 30s, and the public policy reactions, like those of the ‘20s and ‘30s, seem to be digging us in even deeper. So, as you might guess, I suspect we have more, plenty more, to go on the downside for the markets, always with the caveat that no one, including yours truly, knows where the markets are going.

So, now that I think of it, you are correct: This is not unprecedented, but the precedent is truly horrific.

And the real economy? Wait until this percolates through. Oh, boy. We are living in interesting times.

And this looks like yet another blog entry.

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