Value Investing World

Monday, June 7, 2010

Hussman Weekly Market Comment: Extraordinarily Large Band-Aids

A dollar spent by the government is always a dollar taken from somebody and diverted from some other activity. The only question is whether the dollar spent is more productive, or satisfies a more desperate human need, than the alternative activity would. If not, the spending is hostile to economic growth and public welfare. There is no free lunch. At best, what people call "stimulus" can only occur if the dollars spent by government are more productive than they would have been if they were allocated privately. I cannot imagine how allocating public funds to the same reckless stewards of capital that made the bad loans in the first place can possibly be a productive use of capital.

All of this would be fairly moot if it we were simply talking about 2008 and 2009. However, my impression is that as the effects of last year's surge of deficit spending taper off, we will begin to observe a more accurate and generally flat reflection of underlying economic activity.

Posted by Joe at 6/07/2010
Labels: John Hussman
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Value Investing World is a blog dedicated to promoting the multidisciplinary approach to investing and development of – as Charlie Munger describes it – a latticework of mental models. Although largely focused on linking to investing and economic material it deems of interest, it will also post and link to material from other disciplines that it thinks worth reading or watching.

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  • Dr. Peter Drucker: FEEDBACK: KEY TO CONTINUOUS LEARNING
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  • Charlie Munger - USC Law School Commencement - May 13, 2007
  • Charlie and Checklists
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Charlie Munger

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  • NOTES: Charlie Munger - USC Law School Commencement - May 13, 2007
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Warren Buffett

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Ben Franklin

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Benjamin Graham

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Diversification

  • Warren Buffett on Diversification - 1966
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Checklists

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Expert Performance / Self-Improvement

  • Bill Gates quote from Charlie Rose interview (or, how the world's best companies are built by fanatics)
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