Are you revolted yet?

November 20, 2008

Financial markets might be in distress and stocks are falling through the floor, but according to James Montier, global strategist at Societe Generale, we are not in the final stage of bubble burst yet. For one thing, the Financial Times is still too big.

At a fund managers conference in London today, Montier — a renowned bear — noted a thesis by economists Hyman Minsky and Charles Kindleberger that bubbles go through five stages — displacement, credit creation, euphoria, critical stage/financial distress and revulsion.

Currently, he says, financial markets are going through the critical/distress stage but we are not in revulsion yet.

“In revulsion, the Financial Times will be three pages long and we will all be ashamed to be working in finance. Stocks will be unambiguously cheap,” he told a group of financial professionals.

4 comments

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I can’t disagree with Mr. Montier’s definition of cycles, but those of us not in Washington or on Wall Street are well into the revulsion stage, with good reason, given that there not only is no moral leadership from either source, but no apparent hope of any. Instead we get denial of responsibility and predictable political crisis management of the symptoms of our excesses, while expanding the problem that created it, too much cheap credit and deficit spending.
Those of us in the real world are already voting with our feet and wallets in the only rational manner available to us and are unlikely to change direction until there is a return of sanity to the financial and political arena.
If there are heads in Washington and Wall Street still held high, I suggest an examination of the term ” in denial”.

Posted by Gary Leeper | Report as abusive

Nice. Im starting not to care anymore so maybe we are on that point of revulsion.

USA: next time you go and debt yourself into death please keep in mind that you have to actually pay the debt.

Posted by Pablo | Report as abusive

“We” need tax incentives to buy homes, the kind of incentive that pays a percentage of the interest depending of “our” income ! If I make less than 100k the Treasury will pay me back 40% of all interest… If I make from 100k to 150k they will reemborse 30% and so on.

Thats the kind of bailout that “WE” need, the one that helps directly the industrys while assists the families.

Posted by Carlos | Report as abusive

I am in revolted at the way the Federal Government is hiding the truth from us.

The truth is, the “elite” around the world, want to make major changes.

The major change that they want in the United States, is to change our currency! The dollar is in decline, and by early next year will be worth nothing. Then they will introduce the “Amero,” where you might get two cents (IF you get that) on the dollar.

When the public comes to this realization, that their savings isn’t worth anything by the value of the American dollar, they will start “dumping it like crazy.”

Of course, they also want to have Canada and Mexico a part of the United States. No more boarders, and we will all have the same currency!

Brilliant idea of Bush Senior.