Sunday, September 20, 2009

James Grant's Recovery By Any Other Name

Not famously a glass half-full kind of fellow, I am about to propose that the recovery will be a bit of a barn burner. Not that I can really know, either, the future being what it is. However, though I can't predict, I can guess. No, not "guess." Let us say infer. James Grant

What a surprise, for me, to read James Grant's forecast of a barn-burning recovery. Long a member of the sky is always falling crowd, Mr. Grant's change of heart had me scanning (and then rescanning) the entrails of his essay, looking for the sardonic wink (might we be burning the barn?), but to no avail. I felt like Shakespeare's Caesar, recognizing the knife in my chest came from a trusted friend- et tu James?

I took a walk on this bright sunny day and wondered. Had Mr. Grant been bought off?- doubtful. Lost his mind?- no, the wit behind the prose was evident. Why then change one's tune after so long, when the stopped watch was finally correct?

With the thought of Shakespeare in mind, I drifted from the tale of a Dictator brought low to that of a tragic love affair, and a lover reconciling her love for a member of an enemy family:

'Tis but thy name that is my enemy;
Thou art thyself, though not a Montague.
What's Montague? it is nor hand, nor foot,
Nor arm, nor face, nor any other part
Belonging to a man. O, be some other name!
What's in a name? that which we call a rose
By any other name would smell as sweet;
So Romeo would, were he not Romeo call'd,
Retain that dear perfection which he owes
Without that title. Romeo, doff thy name,
And for that name which is no part of thee
Take all myself. - Juliet

"Ah," I thought, "what's in a name indeed."

The name in question, recovery.

Mr. Grant's argument is simple. We've had the bust, and a sharp one at that, thus the recovery to follow will be as sharp.

Perhaps. Like Mr. Grant I can't really know, but I think if he smelled this thing called recovery it would not smell so sweet, because the preceding decline was arrested, attenuated, adding alliteratively, adulterated. Boom, it seems to me, follows bust only when the bust has truly plumbed the depths.

We haven't, I believe, hit bottom.

To wit, according to the more classical school on which Mr, Grant usually relies, the bust is a cleansing process whereby the bad debt is purged. Call it a financial high colonic.

Our bad debt has not been purged. Our balance sheet, like Japan's, remains filled with assets of such dubious quality they have rightfully earned the name, "toxic."

To invert the sense of Juliet's musings above; although a recovery by any other name would smell as sweet, calling the proverbial bouncing dead cat a recovery will not mask its toxic air.