Writing in today’s LA Times, former Harvard President and Clinton Secretary of the Treasury Lawrence Summers explains the perception gap between the future being predicted by financial markets vs. the future being anticipated by the “commentariat.” While financial markets are pricing in an expectation of tranquility as far as the eye can see, headline and opinion writers (and I might add, bloggers on both the right and left of the political spectrum) constantly make it seem like the world — and the U.S. economy — is going to hell in a handcart.
“…it is fair for those who look to markets to point out that the easy path for the commentariat is to foretell disaster. If disaster occurs, it was foretold. If it does not, credit can be given for timely warning…Equally, those who take comfort from the markets’ comfort should bear in mind that the markets hardly ever predict serious disruption. Historically, the moments of greatest complacency have been the moments of greatest danger.”
(via: Rich Karlgaard)
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