“Your “crash alert” pennant is still flying high. Could you give some indication of a) how low you expect the ASX to fall and b) how long you expect the depression/recession to last for? I enjoy your commentary.”
Thanks Patrick. That breeze that keeps the crash alert pennant fluttering is from our incessant yammering in the Old Hat Factory. But no matter, your question is exactly the right one, and we have exactly no idea. The important point to remember is that when financial bubbles transition into social phenomena, they acquire a pathological quality that makes them nearly impossible to track with normal metrics. The drunk guy at the party can act a lot crazier than you imagine. And when everyone at the party is drunk (and popping pills), only the sunrise seems to put a natural end to the revelry. Sunlight, as the saying goes, is the best disinfectant.