In case you missed it in the December 2008 issue of The Atlantic, Henry Blodget offers a remarkably accessible analysis of the mess in which we currently find ourselves. In fact, it’s the clearest, cleanest such analysis I’ve seen so far.
If you take time to read it, I highly recommend you print it first, or pick up a copy of the magazine at a newsstand. An easy read — but even easier in hard copy.
Meanwhile, f you’re wondering who the hell Henry Blodget is, he offers the following, abbreviated autobiography near the top of the article:
… I have had more professional experience with financial bubbles than I would ever wish on anyone. During the dot-com episode, as you may unfortunately recall, I was a famous tech-stock analyst at Merrill Lynch. I was famous because I was on the right side of the boom through the late 1990s, when stocks were storming to record-high prices every year—Internet stocks, especially. By late 1998, I was cautioning clients that “what looks like a bubble probably is,” but this didn’t save me. Fifteen months later, I missed the top and drove my clients right over the cliff.
Later, in the smoldering aftermath, as you may also unfortunately recall, I was accused by Eliot Spitzer, then New York’s attorney general, of having hung on too long in order to curry favor with the companies I was analyzing, some of which were also Merrill banking clients. This allegation led to my banishment from the industry, though it didn’t explain why I had followed my own advice and blown my own portfolio to smithereens …
Finally, among other things I found interesting in the article, there’s this: Blodget argues that Alan Greenspan’s decision to “keep interest rates too low for too long” was “the single biggest cause of the housing bubble.” Regular TMV readers may recall that contributor Ned Lips (when he was still a “guest voice”) made a similar argument. Yes, we have smart people, too.