Sunday, October 04, 2009

A Welcome and a Clarification

Welcome to the thousands of new readers from Zero-Hedge and Naked Capitalism (thanks for the links). As you might surmise from reading the archives I post in spurts. Sometimes, as has been the case lately, I post daily and then I take a break, recharge and rejoin the fray. I figure I provide good service for the price.

I've already received a few emails suggesting a contradiction in my last post on macro-economists as in, "aren't you taking a macro-economic view that we have too many macro-economists in the kitchen?"

Guilty as charged, the view is macro-economic. My point, however, is that there are, apparently, too few real-sector advisers to the President and it is the real sector that will (or won't) pull us out of the slump. Whether the government should directly finance the real sector is another issue- how would one know which investment to choose? the eternal question of finance, unless we're in the Ponzi phase. Regardless, so long as the flow of funds is directed at the big banks and they direct those funds into, mainly, other financial sector investments, the real sector is crowded out of the flows- an interesting conundrum as I suspect some real sector investments would generate real earnings far higher than the financial sector offers, but finding the good ones would require a bit of work, on the ground, not with a spread sheet.

Economic policy these days reminds me of the old Tech company CMGI- lots of great finance guys, no real experience in the field. I shorted CMGI in 2000, not because I didn't think they brought something to the table but because they were valued far higher than they should have been.