One thing that baffles me about the financial crisis and all of the analogies to the Great Depression is the repeal of the Short Sale Uptick Rule and Glass Steagall. If we are truly going to remember the lessons learned from the Great Depression we should quite obviously bring back the Uptick rule and also Glass Steagall which were the two most important pieces of legislation passed in the 1930′s to prevent another Depression from hitting the economy.
Here are a few things that concern me about the current economic backdrop aside from the repeal of the Glass Steagall Act and the uptick rule:
1. Escalating Debt — The fiscal deficits and long term debt issues are very real and just because we have a printing press does not mean we can export our inflation forever. Eventually, as we print more money to monetize the debt, inflation pressures will mount and standards of living will fall for the average American worker all in the name of Keynesian Economics. No one stops to think that maybe this time the problem is long term and structural and not simply cyclical.
READ MORE HERE: http://seekingalpha.com/article/449521-are-stocks-overvalued-10-stocks-to-consider-shorting-as-a-market-hedge
