And the Band Played On . . .

Yes the bland continued to play as the Titanic sunk. And what an act of humanity and bravery it was. Now, as the economy sinks, the financial analysts and economists of the world continue on as though the ship has righted itself and is now watertight. Why?

There could be many reasons why analysts soldier on with their bullish forecast in the present environment. First, they could be right! Oh my gosh, think of it, the credit crisis is over and now is the time to jump in. Maybe. But from credit delinquencies of all stripes and plunging home prices to rising unemployment there isn't much data to support that view.

Second, consider many of those interviewed in the financial press are managers of equity only mutual funds. Asking them where we are in the credit cycle and whether to invest in equities is like asking your wife if she is having an affair. These are questions which have only one answer, so why ask? Of course there could be a mutual fund manager who says: "Oh my GAWD! We are on the edge of financial armageddon, get out now!" He could also pick up his last paycheck on the way home.

Third, and more probable in my view is that there are so many variables, each with its own continually changing magnitude of importance, that almost no two people will look at even the same data and come to the same conclusions. Trying to forecast economic activity is somewhat akin to trying make long range weather forecasts: it simply isn't possible beyond a very short time horizon. So innate optimism and economic imperative rule the day. All is well, don't worry, be happy!