“3/19/2008, 9:58pm EST”
I heard the Earth actually <i>was</i> flat... until The Market decided it was round. →
“Bernanke’s doing everything he can to end it,” says Brian Horrigan, chief economist at Loomis Sayles, a Boston mutual fund manager. But “he can’t miraculously change a bad asset to a good asset.”
Experts differ widely on how far advanced the current financial crisis is. Some say it could last several more years, while others say the stock market may be near bottom now.
A sure indicator, Mr. Horrigan says, will be when “vultures” – aggressive, bottom-fishing investors – start moving in to buy investments that have tanked in the hands of others. In the current crisis, those investments include packages of debt that include subprime mortgages.
“That’s how crises come to an end,” Horrigan says. “Someone starts buying.”
Mr. Horrigan notes quite correctly that no individual can take a bad asset, decide that it’s a good asset, and thereby turn it into a good asset. (This seems particularly true in the case of subprime mortgages.) But The Market — that is, a group of individuals, or rather, a very small group of individuals — can do just that, apparently.
Didn’t you hear? Reality is defined by our beliefs and feelings. Things are only bad right now because we aren’t confident enough that they’re good.
Never leave home without it.
