Market Wisdom Upside Down

[Michael]

1. Loose credit policy has always been something to avoid. Tight credit policy is apparently even worse.

2. Moral hazards are really bad, except when they are necessary.

3. Rising housing prices are bad. So are falling home prices.

4. Rising oil prices are bad. So are falling oil prices.

5. Consumer spending is bad, except when it is good.

These are all taken from this article (http://www.reason.com/news/show/130837.html) and I figured I just had to share it. It is all too true.

Seems like there's a lot of economic confusion out there...

[Dominick]

It's never been more than one huge big fat post hoc ergo propter hoc.

[partofme]

I think the lesson to learn is that moderation is the key in economics. Growth is good as well but if a economy grows too fast it can overheat and cause problems such as the bursting of bubbles and inflation. Contraction is bad as well. In regards to the 1, 3, 4, and 5 the problem is when these things are going too strongly one way or the other.