I was reading a summary of Jeremy Grantham’s remarks in GMO’s recent quarterly analysis. And it occurred to me that a lot of what we see there is predicated on some embedded longer-term assumptions that I want to make clear. Grantham is talking about the potential, even likelihood, of a bubble in equities by 2016. This has to worrying because it would usher in another period of deleveraging. But it also assumes that the real economy gets us through 2016 via expansion. Some thoughts below
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.