Wisdom of Warrenbonds

"I heard that about you. You like to work alone."
--Ice Man (Top Gun)

John Hussman once again reinforces his message of overvalued, overleveraged markets that must 'clear' before real progress can be made. He thinks that perhaps that will occur in 2012. Implied, I think, is that stock prices would need to significantly decline.

I also like his analogy of Eurobonds to 'Warrenbonds." Suppose 9 broke people approached Warren Buffett that they would all get together and issue Warrenbonds to fund the activities of the ten. The activities would be backed by the assets of the consortium which, in this case, would be WB's assets. 90% of the 'group' would agree on the wisdom of this idea, and WB would be criticized as the lone, selfish holdout.

WB would never agree to such a plan unless he could impose strict controls over the activities of the others. Of course, the 9 broke people would be unlikely to consent to such loss of sovereignty, so the Warrenbond idea never gets off the ground.

Same for Eurobonds.

I might add that this analogy bears some resemblance to modern democracy and class warfare arguments.

position in SPX