Todd Harrison writes:
“I’ve maintained throughout our time together that the mother of all bubbles—debt— would be the final frontier before free market forces shocked asset classes back towards equilibrium. With total debt-to-GDP stretched towards 400%, we reached the zenith of that elasticity in 2008 and the system unwound with great vengeance and furious anger; the gig was up. It’s hard to say what would have happened if we let the market do what the market was in the process of doing. It could have created a domino effect that toppled corporate America from JPMorgan (JPM) to General Electric (GE) to Target (TGT) to Goldman Sachs (GS) to AT&T (T); the commercial paper market was frozen, payrolls would have halted and citizens may have taken to the streets to feed their families. We’re talking potential anarchy here and I’m not prone to hyperbole. The alternative scenario—the one the created a chasm of discord throughout the land—was the evolution of the last gasp bubble, that of Government.com. $800 billion here, $1 trillion there, numbers so enormous they seem silly; the reality is they’re anything but. While we remain in the eye of the storm—the relative calm between the banking crisis and the cumulative comeuppance—a simple yet scary truth remains. We haven’t cured the disease; we’re simply masking the symptoms. I will again remind you that the opposite of love isn’t hate, its apathy. We’ve noted the lower volume during rallies and the higher traffic during the declines—a sign of distribution—but a simpler truth may be emerging, that of burnout. After four—or five, or six—bubbles and bursts, folks are both bitten and shy by the gamesmanship in the marketplace.”
You can’t trade off that writing, but it does put events in context nicely.