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Best Business Commentary
March 3, 2008
The end of the good times
There’s “abundant evidence” that we’re heading toward recession, says Daniel Gross in Slate. So why can’t anybody in Washington bring themselves to mention “the R word”? For a president, of course, a recession is “political poison,” but even many non-politicians have “come to believe (erroneously) that central bankers and executives” have “engineered the business cycle out of existence.” Well, “the laws of physics still apply to the U.S. economy,” and the latest proof is Google. The search engine giants is seeing falling paid ad clicks, in a belated nod to reality. And as “one of the last remaining hot sectors” cools, we have to face reality, too—hint: it “rhymes with shmashmession.”
It’s more than a recession, says Fortune’s Allan Sloan in CNNMoney.com. We’re at the end of “the greatest bull market in U.S. history,” a 25-year period that “changed the way that Americans think about stocks.” In 1982, few people owned stocks, but by 2000 equities had become “magical, a supposedly can’t-miss way” to save, plan for a rich retirement, and send your kids to college. In that period, the “boring old S&P returned more than 19 percent a year”—since 2000, it’s “barely broken even,” including dividends. The magical bull market was great, “but it’s not coming back—at least for this generation of investors. Get used to it.”
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