That may be President Obama's most important bailout task: to educate the country that there is no easy escape here, except taking our medicine, getting our fundamentals right again and working our way out of this, brick by brick, by getting back to making money -- what was that old Smith Barney ad? -- "the old-fashioned way" -- by earning it.
-- Thomas Friedman, "
Elvis Has Left the Mountain,"
The New York Times op-ed (Jan. 31, 2009)
The public sector's cleanup of the private sector's mess represents a monumental and complex job. The "great unwind" of the leveraging-up of our economy will remain a structural issue and headwind for some time to come. Moreover, it's already February. Do those folks looking for a midyear economic recovery really suspect that a "bad bank" project can be implemented swiftly enough to have an effect by the end of second quarter 2009?
For now, patience (waiting but not passively waiting), perseverance (amid downbeat news) and perspiration (most likely tons of it!) hold the ingredients to a successful strategy in our economy and in our stock market.
From my perch, regardless of the scope of the government's initiatives, it remains difficult to see a sustained upside move in equities against the deleveraging process and against a worsening and uncertain fundamental backdrop.
Expectations for our domestic economy and for our investments are being reset, to borrow a term used by
(MSFT - Get Report)
Steve Ballmer in last week's earnings call, to lower levels.
Over the past several months, we have begun to taste the early stages of
investor disinterest and apathy
and societal pressures as the acceptance phase of large investment losses in individual, institutional, charitable, pension and endowment portfolios develops. The recent Madoff and
frauds have only served to further reinforce a general loss of trust. As well, the broadcasting of Congressional committee meetings and testimony and the vivid picture of political partisanship and their incoherent policies have likely further contributed to a deeper erosion in confidence.
Doug Kass writes daily for
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