Nov 3, 2007

Kevin Duffy on the "asset inflation Kool-Aid drinkers"

The big winners past 20 years were the asset inflation Kool-Aid drinkers, with investment banks at/near the top of the list. The great paradox is that they call themselves capitalists yet believe in monetary intervention (which they think creates perpetual asset inflation). (Perhaps this is why the Dems accept their campaign contributions.) If there is such a thing as economic law (which we actually believe exists), there is a house-cleaning in the works for which the faithful will be unprepared. The economy is in the early stages of weaning itself from its credit addiction – a good thing - with the Fed the source of the drug and the investment banks the creative and aggressive distributors who in the process became addicts.

[In you live in New York City,] you have a front row seat to the greatest spectacle on earth. Relax and grab your popcorn, we’re only in the first inning.

~ Kevin Duffy, Bearing Asset Management, July 19, 2007

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