Muffie Benson-Perella (muffie AT dealbreaker.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for non-existent, prestigious and accredited investors only, employing an actively managed, long-short strategy.
I feel quite vindicated, really.
Being contrarian can be very difficult going for people without a strong sense of themselves and the kind of background to tap broad experience and knowledge to look beyond the "hype." Not everyone is cut out for the work.
So when a major New York newspaper goes to press with the news that the economic downturn is more media hysteria than reality, I smile to myself. I've been making this point, particularly about banks, for some time. Of course, some of us actually put our money where our mouth is.
Add to that a major, national business magazine with the same news and I think you will soon see that optimism shouldn't be going out of style.
I understand that it is fashionable to say that the United States is in a recession, but this both ignores the official definition of "recession" and simply doesn't hold much water. Even the might G7 refuse to say the United States is in a recession, citing similarity to Tokyo's economic prowess.
"The text is slightly more negative about the U.S. economy than in Tokyo. But it will not be alarmist or use the word recession," the G-7 official said. "Emerging economies are holding up well."
I think the G7 is being rather limp-wristed about the whole thing, frankly. I haven't really seen any signs of recession at all. As I've mentioned on my own site, I don't know anyone who has lost their house, or their position in finance. (There is someone on the very periphery of my inner circle who is probably going to be unemployed soon but that's because he works for Bear Stearns and I really don't know him all that well in the first place, and plus, he didn't really need the job, he just took it to get his mother off his back so his grandmother wouldn't ask the trustee to suspend his monthly check which makes his dismissal anything but a hardship).
Finally, a recent research report by Bear Stearns notes that "Jobless claims fell...." And that's Bear Stearns. If they aren't worried how could you be?
Excitable people shouldn't be permitted in the markets. It's the kind of thing that happens when market actors don't have the education and perspective to avoid being swayed by something as trite as negative sentiment.
Let's just relax a little bit. Shall we? It is Friday, after all. Go have a drink or something. All your Bearishness is hurting my returns.