A Pivotal Point in the Down and UP

From July 2007 to November 2009 a great experiment in Bubble Economics started to leak and eventually soared around, as all balloons that lose air do.  Then a street vendor named Ben, found it, put some helium in the balloon and it took off again, not as high as before but it did go up very fast.  Now we are at the point where the street vendor needs to catch it  and give it some more helium before it crashes to the ground again.  Can he do it or is the balloon too damaged by its flight to again be re-inflated.  Such is the debate going on now in Congress.  Bernanke and Geithner are at the center of this debate. 

I saw the following in a blog on Reuters over the weekend.  To me it makes the point.

“It really is getting to a point in history where we need to move beyond systems. It’s really a simple lesson. I taught it to my son not too long ago.You do something good because it’s good. Not because you want something for doing it. That’s it. Not hard at all.But profit motive disciples call this idea weak, childish, foolish, etc…And yet they give lip service to the idea of one day achieving an enlightened society based on the very idea they scoff at now.So really we all need to be a bit more childish in our thinking. We need to stop being so self absorbed and self important. That leads to pride and greed and all manner of suffering.Do what is good because it’s good. And for no other reason. How about THAT for a great experiment?”

Meanwhile The New York Times outdid itself with some good articles over the weekend that speak to the overall economic situation.  Floyd Norris wrote two of the best in my opinion, one on the need for transparency in regulations and how Geinther is fighting the CFTC  and the other on the real economic conditions that exist at this point..

http://www.nytimes.com/2009/11/28/business/economy/28charts.html

http://www.nytimes.com/2009/11/27/business/27norris.html

Tyler Cowen then writes an insightful article on China:

http://www.nytimes.com/2009/11/29/business/economy/29view.html

And lastly, Paul J. Lim talks about P/E Ratios:

http://www.nytimes.com/2009/11/29/business/economy/29fund.html