We all remember back last fall when, midcampaign, Prime Minister Harper pointed out the blindingly obvious - that as stock prices come down, there are better deals to be had.
It was then, and is now, reflective of the analysis one commonly reads in the business pages of serious financial newspapers. No one knows when the bottom of this cycle will be reached. But the smart money knows that, as prices go down, values improve, and the smart investor goes bargain shopping. You know: buy low, sell high.
The pages of the RoB are and Wall St Journal are full of such talk. Unfortunately, as we see every day in the panicky politico-media's treatment of the economic "crisis", the business pages are generally a no-go zone for plenty of politicians and political journalists.
That, along with the fact that Harper and the Ottawa gallery have basically had a (mutually-conceived) toxic relationship since day one, meant that Harper's comments were doomed to be leaped upon as a
malapropism. They were presented as fresh evidence of a guy hopelessly "out of touch" with the "real world" and "in denial", rather than a guy looking at the longer term, knowing that every cycle finds a bottom, and
trying to say that perhaps panic is not the best reflex.
Yesterday, President Obama said what Prime Minster Harper had said: "'What you're now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you've got a long-term perspective on it."
To be sure, Obama's comments are being treated as an uncommon thing, investment advice not being part of most people's expectation regarding a President's role. But they're not being cast as factually wrong (for they are not). And they are understood in the context of a leader sensing that his responsibility is to offset the excessive doom and gloom being irresponsibly cast on a situation which is not as bad as one would glean from the sensationalism of the audience-hungry news channels.
One of the tragedies of the current market carnage is that the damage will once again likely fall disproportionately on the "little guy" - those who are too dependent on the news-cum infotainment media for their "economic" "news." There the message track is all fear and panic, all day long.
For the last few years, consumers and investors alike were lulled into sticking around in markets which had become too toppy. (Remember those years of successive rounds of interest rate easing every time a politically inconvenient corrective breeze blew?) With the bubble's burst, the small investors got creamed.
Now, every day, even in these trying markets, millions of shares are exchanging hands. In each transaction, for ever seller, there's a buyer. The buyers are the ones knowing that what Harper and Obama are saying is more right than wrong, taking things calmly, looking at the longer term, and knowing we will get through this.
The sellers are the ones on the panic diet.
