Power Marketplace’s public service journalism 💙 Give Now

Hard to bare the bear market

Steve Tripoli Dec 27, 2007


Lisa Napoli: Despite the gloomy economic news this year, it hasn’t been so hot for bear-market investors. Marketplace’s Steve Tripoli reports.

Steve Tripoli: Bear-market mutual funds have trailed all mutual-fund returns by a hefty 11 percentage points this year.

Doug Kass of the Seabreeze Partners hedge fund says economic optimists shouldn’t expect that to continue:

Doug Kass: Most market participants have their head in the sand with regard to the economy’s future prospects.

Kass says people who think this year’s economic storms have passed are wrong. He says fall-out from the debt crisis will collide with economic stimulus measures aimed at easing the pain.

Kass: I see a lot of the tailwinds to growth coupled with the unusual nature of the buildup of debt as contributing to a prospective environment which I would describe as “blah-flation” — “blah” economic growth coupled with persistently high inflation.

Optimists see buying opportunities in markets that have already priced in bad news. But Kass says many of those same folks were wrong about home prices holding up, and will be proven wrong about the staying power of consumer spending.

I’m Steve Tripoli for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

This is NOT a paywall. 

Marketplace is community-funded public service journalism. Give in any amount that works for you – what matters is that you give today.