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Random Thoughts: When Did Recession Become Public Enemy Number One?

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Is the US government playing a Jedi mind trick with debt?

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MINYANVILLE ORIGINAL

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

I was listening to Dick Fisher and the folks on CNBC this morning discuss the importance of avoiding another-GASP!-recession.

Riddle me this, Batman: Since when did recession become Public Enemy No. 1? I was schooled to believe that recessions, much like forest fires, were scary and dangerous yet necessary for a fertile re-birthing.

We used to talk about this a lot on Minyanville-The Anatomy of a Recession-and that was four years ago!

While the S&P (^GSPC) is roughly 140 points higher since those thoughts were first shared, we're left to wonder what the cumulative cost will be, both financially and perhaps more importantly, through a socioeconomic lens.

We've seen upwards of $13 trillion in stimulus in one form or another? With $40 billion per month now promised for an infinite amount of time? All the while, domestic GDP remains less than 2% per year? This is either the definition of failure or they're fuelling the jets for an asset-class bubble to end all asset bubbles-and that's saying something!

There are two conversations, naturally: the path we take, and the destination we arrive at.

As a trader, we don't much care about where we end up; we just need to collect shekels as we move from one end of the continuum to the other.
As human beings, watching a world awash with acrimony, unrest, and strife, one can't help wonder if we've mortgaged our future to placate an immediate gratification fix.

As a card-carrying free-market capitalist, I'm no fan of the current course. I will admit, however, that I don't know what the "other side" of this trade would have looked like if we allowed medicine to cure the disease (debt destruction, deflation) rather than injecting more drugs that mask the symptoms (more credit, inflation).

And then there's this thought-what if the USA is acting as a toxic debt mortgage dump? What if they-I mean, we-are Fannie and Freddie in reverse, the ultimate-and perhaps only-conglomerate big enough to digest and ultimately retire the excess debt?

That would seemingly address the fact that risk hasn't been destroyed, it simply transferred from one reality-corporate America-to another-America Corp.

Things that make you go hmm...
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Position in QQQ.

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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