market folly

We're posting up notes from the Ira Sohn Conference.  Harvard Professor (and chess grandmaster) Kenneth Rogoff gave a presentation entitled, "This Time is Different" which is also the title of his book (linked above).

Record levels of public and private debt. He's put together a massive data set studying financial crises.

Past data on average severe crises, how much they fall and for how long: Housing prices -36%, 5 years. Equities 56%, 3.4 years, unemployment 7%, 4.8 years, real GDP per capita -9.3%, 1.7 years. US had a very typical financial crisis. SPX did actually fall exactly 56%. 

Going back to 1800, what percent of the world is in default? He showed a chart that right now there are VERY few in default, historically low actually. Greece has actually been in some state of default 50% of the years since independence. The way out for the Eurozone is political unity, if not within 15 years, the Euro will not survive.  Obesity: adolescents are 17% of the obese population.


P.S. - Don't miss other presentations from David Einhorn, John Paulson, Bill Ackman & more: notes from Ira Sohn Conference 2012.