Financial Healing Underway

As bad as things may seem in the world of finance, I believe that the healing is now underway.

Congress now has no choice but to pass the emergency legislation that will allow an injection of liquidity and the cleaning of balance sheets. While there is no easy solution, a solution is at hand.

The world economy is fundamentally sound. Yes, we are probably in the midst of a mild recession. This recession will probably get worse before it gets better. This is not an unusual thing for the stock market to endure; it is normal. However, the stock market typically looks into the future a good six months. The market will often rise before a recession is over, as it sees that the end is drawing near.

I have a strong belief in the fundamental greatness of our nation’s people and in our economy. Yes, things have happened recently that will make it more challenging to prosper in the future. So, maybe our financial candle won’t burn quite as bright as it might have. We have greater debt issues to deal with. We will have greater “safeguards” (i.e. Regulations) for the economy. But our economy will burn brightly, and our nation will prosper.

Now is not a time to look back and cry about the spilled milk or the opportunities we have lost. It is time to clean up the mess and leave it behind. Congress will pass a big spill cleanup bill this week. We must now look forward and embrace our great way of life.

There are many “bargains” out there for those investors with a long-term time horizon. There are many money managers with very long “buy lists,” praying for an influx of capital to invest. Twenty years from now, we may look back to these days as an extraordinary buying opportunity in U.S. equities. This may be seen as a time when the U.S. economy roared out of the financial ashes and surprised us all with its resilience and strength. That’s what I am betting on. America has suffered an injury. But like with any great athlete (and our economy is like a financial superstar) an injury just strengthens the inner fire to succeed. That is where I think we are today. Our nation is in physical therapy for a severe, but treatable injury. We can handle it, so let the games begin again.