Tuesday, 12 May 2009

Who's right?

Krugman fears lost decade for US due to half-steps reports Reuters.

Elsewhere, George Soros leads growing chorus of 'green shoots' optimists.

I don't know who is right. I can't even make a good guess. But it is an interesting question. Opinions seem more divided now than at any time in the last six months - and divided opinions make for interesting markets.



Blogger Dave said...

Krugman is predicting stagnation.

Soros is predicting a small rebound and then stagnation.

Is there a fundamental difference, or is this just "glass half full" vs "glass half empty"?

1:41 am  
Blogger David Murphy said...

If Krugman is right, the equity mark will drift slowly down, and it is worth selling upside - one year ATM calls say. If Soros is right, or enough people think that he is, that would be a bad trade. I'm not contemplating doing it: I'm just interested in the clash of opinions insofar as it helps to explain the current market levels.

9:14 am  

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