Not everyone is despairing. Remember that the massive stimuli you’ve been reading about are only in the early stages of phasing in. Maybe they’ll have an effect?

From Hook Analytics current weekly compendium (an under-the-radar independent macro-economic research product for institutional clients): “Based on the history of large money supply increases, we estimate that the Fed’s forecast of second-half 2009 recovery is more likely than continued recession into 2010; that the next few years will probably have sub-normal growth, low inflation, and low interest rates. We think the circumstances more resemble 1933 than 1931; 1982 more than 1980. That is, we think we are mostly through a recession and market crash and that the next large move will be 40-60% higher stock prices.”

I would hardly bet the farm on this scenario – and actually, neither would John Hook. But he sees central bankers flooding the world with money and credit – which, he says, is not what Hoover did in 1931 – so, from a monetary perspective, that could make this 1933.

From a fiscal perspective, meanwhile, picture a bus that was going pretty fast in one direction . . . overshoots the turn-off . . . slams on the brakes and backs up (what we seem to be doing now) . . . . and then starts off in a better direction, gradually gaining speed.

It’s a more dramatic and disruptive maneuver than a traditional recession. A lot of passengers get thrown from their seats when the brakes slam on.

In a traditional “business cycle” recession, inventories grow swollen, causing a dip in orders and prices and profits and employment – until, a year or so later, the excess capacity had been worked off and demand once again set factories to humming, and rehiring.

This is different. This is transformational. We’re going on a major diet and economic fitness program that will be painful at first but leave us healthier going forward.

(Some of it, let’s hope, will be a literal diet: the obesity epidemic, especially childhood obesity, is real and ominous.)


I’m a few days late posting this quick clip, but it does make you wonder: what is it about us personal finance writers?


Alan Waldock: “I’m sure you know (by now, at any rate) that the Thatcher ‘anecdote’ relayed by Peggy Noonan is in fact a joke from a satirical TV puppet show.”

LEDs and CFLs — Hmmmm

Reader George Mokray passed yesterday’s item on to his friend Fred Davis, who’s been in the business of energy efficiency and lighting for decades. He writes that the page I linked to is, like most in this field, “at best misleading.”

First off, “it compares a spot/reflector LED ‘bulb’ to a CFL spiral. You would not want to use those two products for the same use. Also, lumens (light output) is not mentioned for either” – yet it is lumens that allow a fair comparison. “And, unfortunately,” he says, “ratings for LED bulbs are highly suspect anyway. The only responsible program for testing LEDs is the Caliper program by the Department of Energy. It has found, over seven rounds in three years (as recently as January 2009) that stated specifications (such as lumens or watts) for LEDs are almost never accurate.”

As for the long life of LEDs – well, yes, he says, perhaps. But we actually haven’t had enough experience with “high wattage” LEDs to make very good projections.

And energy savings? “NOT a responsible statement, because it makes no reference to light output. By definition, a one watt anything consumes less energy than a two watt anything. A comparison would be apples-to-apples if it were for two products which both met the same lighting needs, or, more specifically, if they produced similar lumens (and the same CRI, color temperature, photometrics, etc.). Generally, CFLs are much much much brighter than LEDs. And, if you were to aggregate LEDs for an apples-to-apples comparison, CFLs are almost always more efficient (lumens per watt). In situations where you really want very low output, then, LEDs might be advantageous.”

I was even wrong about LEDs throwing off less heat, he says. “Heat generation will be less only if wattage is less.”

The one place he gave me a passing grade was on my question: (Does anyone know how much energy and environmental destruction goes into making an expensive LED bulb versus a CFL?) “Decent question: I haven’t yet seen the thorough analysis, but certainly there are issues, lead, cadmium, etc., long shipping, etc.”


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