TechCrunch’s Michael Arrington was apoplectic that we had optimistic things to say about Google’s potential long-term future, so perhaps he will be happier about our near-term macro-economic pessimism. Perhaps he will even consider converting his TechCrunch equity to dynastic cash wealth sooner than planned. In a New York Times Dealbook op-ed today, our editor lays out the bear case for the U.S. economy and stock market:
NOW that the Federal Reserve has started to cut interest rates, the stock market and deal making will be off to the races again, right? The subprime mess will stay “contained,” stocks will extend their recent gains, and the takeover wave will start anew as corporations and private equity firms feast on cheap cash.
Well, that’s the bulls’ theory anyway. And it could happen. Aggressive rate cuts in 1998 by the Fed chairman, Alan Greenspan, headed off disaster and set up the market for a historic run. After this year’s brief panic, moreover, the market has not only stabilised but is back at record highs.
Unfortunately, we are not off the hook yet. It is still possible that we are in the early stages of a painful, extended decline… [Continue]