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When Will the Economy Recover?

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A legitimate economic recovery can happen, but only after we navigate the sovereign sequel to the first phase of the financial crisis.

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MINYANVILLE ORIGINAL

Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

Anyone can hold their breath for a minute when they're 10 feet underwater, yet a person will drown in six inches of water if he's face-down long enough. The same can be said of our current economic climate; it's not the depth of the recession that matters, it's the length.

Our government has thrown upwards of $13 trillion in stimulus at the financial crisis yet we're seeing 1.9% annual growth, as per Wednesday's GDP report. Perhaps more concerning is that risk hasn't disappeared -- it simply transferred from one perception to another, from private balance sheets to public liabilities.

I'm on record championing a legitimate economic recovery ripe with Millennial-led human capital once -- and only once -- we navigate the sovereign sequel to the first phase of the financial crisis. Until we take our medicine, in the form of debt destruction rather than drugs that mask the symptoms, we're prolonging an inevitable fate.

As a trader, the path we take is entirely more important that the destination we arrive at; as an investor -- and a father -- I continue to monitor the unintended consequences of our current course as they percolate through our socioeconomic sphere. As we're apt to say in Minyanville, social mood and risk appetites shape financial markets -- and much more.

The Great Depression should serve as a framework for optimism; most of society worked, great discoveries were made, and formidable franchises were established. In order to get through it, however, we needed to go through it, and the same will prove true once again.

As we get from here to there, I'm reminded of the wisdom of my grandfather, who, when faced with adversity, assured me that, "This too, shall pass."

R.P.

Twitter: @todd_harrison

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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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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