No One Can Predict the Future, That is Why There is Risk Analysis

An recent article MSN.Money interesting. No one can predict the future and it does not pay to be either an optimist or a pessimist, but a realist. That is why there is risk analysis. All that said it pays to read contrarian points of view.

The economic and financial landscape of 2007 bears striking similarities to 1929. Back then, there were large, unregulated pool operators and other insiders constantly muscling the tape in whatever direction they chose. The public, too, was involved, thinking the country was experiencing a new era. Meanwhile, business began deteriorating in the spring of 1929, though the partying in stocks lasted until the fall.

One comment that is worth re-stating:

Make no mistake about it: The tightening of credit has (and will) radically alter the housing market -- witness the softening of home prices nearly everywhere in the country as inventory builds and sales slow.

Also keep the position of Wall Street and the consumer separate:

The deteriorating economy is a process that has a long way to go, even though Wall Street tries to throw a party every day that bad news does not absolutely pummel it into submission. No amount of hedge-fund and LBO speculation is going to make the average consumer whole again.