A Good Debunking of a Panglossian Financial Press

A few days ago, I read a fairly typical don't worry, be happy article on CNN by Paul La Monica.

After perusing it for a while, and I shook my head, and thought, "Moron", but decided not to pursue it on my blog. It just seemed be the all to ordinary whistling past the grave yard that one sees in far too much of the financial press.

Yesterday however, I got an email from Paul Lamont, who I have cited before here, who runs Lamont Trading Advisors, who sees their mission as being to prepare clients for a, "major bear market".

He has a very nice rebuttal to Mr. Lamonica's article, noting that:

• Lamonica's use of unemployment as a metric is disingenuous, as it is a lagging indicator. [I would add that the unemployment stats are also highly massaged these days as compared to 1933].
• The absence of deflation is not a difference, inflation continued until 1931 in the great depression, and the same applies to commodity inflation and inflationary concerns.
  
  
• That the recent bounce back of the stock market is actually rather similar to what happened in the great depression, with the eventual bottom occurring because the banking system froze up:
  

Go and read his article, I wholeheartedly approve, though I do differ on one point: I see the continuing economic crisis mirroring those that occurred in Asia, Argentina, etc. where you see sudden and catastrophic devaluation of the currency (i.e. inflation), as opposed to the 1930s style depression.

That's why I have 30% of my 401(k) in overseas index funds.