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Signs of the Times


The more things change, the more they change.

"So you run and you run to catch up with the sun but it's sinking. Racing around to come up behind you again." --Pink Floyd

Benjamin Franklin once said that the definition of insanity is doing the same thing over and over and expecting different results. As our economy dives deeper into recession, we should remind ourselves that the more things change, the more they stay the same.

In May of 2007, I listed anecdotal evidence that compared that period to the late-1990's and suggested financial markets were living on borrowed time. With social mood sour and the tape demonstrably lower, I wanted to revisit those vibes and add fresh perspective.

In 1999, globalization was the justification for growth. In 2007, we saw the seeds of isolationism that paved a path towards nationalization. Today, we find ourselves at that crossroads with our destination predicated on orderly debt destruction.

In 1999, folks traded on margin. In 2007, there was the looming yet largely unforeseen credit bubble. Today, the debt dynamic is front-page news as companies with clean balance sheets position themselves as winners in the new world.

In 1999, day trading was all the rage. In 2007, condo flipping was in vogue. Today, real estate bargains have begun to emerge as an unfortunate function of the foreclosure process.

In 1999, policy makers praised the new paradigm. In 2007, politicians took aim at lending practices. Today, they're grandstanding on a national stage.

In 1999, we had the Greenspan put. In 2007, there was the Bernanke helicopter. Today, the credibility of the Federal Reserve is fragile at best.

In 1999, Dan Dorfman moved markets. In 2007, Jim Cramer was a self-proclaimed equity evangelist. Today, the point of recognition has arrived that we must take responsibility for our own financial decisions.

In 1999, corporate malfeasance percolated in select situations under a seemingly calm surface. In 2007, insider trading shouldered much of the blame. Today, the entire financial industry is widely viewed as being evil.
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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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