I'll be in Vancouver, British Columbia, next week covering the Agora Financial "Assault on Enterprise" conference, put on by the folks at The Daily Reckoning newsletter.
As the name implies, this isn't a gathering of merry optimists. No one thinks it's Morning in America. The conference's speakers, which include Marc Faber, Barry Ritholtz, John Mauldin, Vitaliy Katsenelson, and former Comptroller General David Walker, are all somewhere between mildly irked and on the verge of renouncing their citizenship at how the financial crash was handled and where we're headed next.
I can't claim to subscribe to all their views. But these are interesting people to listen to, to say the least. Here's a snippet from last year's conference, given in an interview with Agora founder and writer Bill Bonner, the event's emcee:
We're in the early stages of a depression.
And I use the "depression" word very seriously. It doesn't feel like a depression. If you go to most places it doesn't look like a depression. But it is a depression in the sense that a depression marks the end of a major trend. A major trend comes to an end and you need to restructure. It's not the same as a recession. In a recession, you have growth, and then the economy runs too hot, and then it has got to cool down for a while. And when it's cooling down people get laid off. And then when it warms up again, they get hired back at the same jobs and things go on. But that's not what's happening now. People are not getting laid off. They're getting fired. And they're fired permanently because the jobs are not just cooling off; those jobs are disappearing ...
A depression requires a restructuring of the economy. That takes years. And during those years, people have to pull back and spend less money. When they're spending less money, that's what makes it feel like a depression because all the sudden the businesses have less income, they have to let people go, and then you have a problem. So that's likely to go on for quite a while ...
We just got a figure this week saying that Americans are paying off debt faster than any time since 1952. This is a big thing. This is a half-century change we're looking at. And this is not going to happen fast. It's going to happen very slowly. But meanwhile, we have the federal government fighting it. They're fighting it by trying to prop up businesses that should go broke. Like GM. And so that just slows it down, it takes longer. The banks that should have gone broke are still in business. The companies that should have gone broke are still taking money from the government. So it's not going to be easy and it's not going to be fast.
Now, there's an argument to make that letting Citigroup (NYSE: C), Bank of America (NYSE: BAC), and AIG (NYSE: AIG) all implode simultaneously would have created more pain than the unintended consequences of saving them. But it's going to be a pleasure hearing the other side of the story.
I'll have daily updates from the conference next week.
