It's Different This Time. (really)

If you are not familiar with Mish's blog, I suggest you add it to your favorites. Mish offers up some of the best macro analysis out there with a unique, witty style. In his latest post mish covers our new Federal Reserve Chairman's speech before the Economic Club of New York on March 20, 2006.

Not to bore you with the details but here is Mish's take on helicopter Ben's speech which I found on target and quite funny:

"Paraphrasing Bernanke in 8 points:

The slowdown in housing, even though it contributed 50% of the jobs during this recovery is irrelevant.

There will be no lagging effect due to 15 consecutive rates hikes (counting March).

Unlike Spring of 2000, complacency, merger mania, and stock buybacks no longer matter. Instead they are a sign of strength.

Rising foreclosures and bankruptcies are not really a sign of stress.

The trade deficit is really a sign of a global savings glut. Everyone, everywhere should spend more than they make. We can, so can everyone else. It's the proverbial "free lunch".

Because of the brilliancy of the Fed, the natural interest rate has declined.

The Fed is omnipotent against any and all financial obstacles. There is no problem the Fed can not print its way out of.

The yield curve and the action of the long bond are simply wrong.

Paraphrasing Bernanke in a single sentence:It's different this time!"

Over the last 30 years we have heard this phrase no less than 7 times; 1972, 1976-1980, 1986-1987, 1990, 1994, and 2001. Fast forward to 2005-2006 and once again it is "different this time." As if we as a nation or even as individuals are smarter, or less greedy than the last time. Once again our "leaders" assure us that prevailing conditions are "different", or that they have the expertise or ability to save us all. Hogwash. These are the same people that caused the problems in the first place!