Mar 23, 2009
The Beginning of Wisdom...
"The beginning of wisdom is to call things by their right names" according to the Chinese proverb.
The chart above (click the chart to enlarge) shows the relative frequency of Google searches for "Troubled Assets" vs. "Toxic Assets" over the past 12 months. As the Treasury introduces "TARP 2.0" today, the change in the vernacular reflects a shift from a market view (or hope, really) that the problem was a temporary impairment of "troubled" assets to the acknowledgment that many of the assets at the center of the financial storm are permanently impaired or "toxic". If this view is widely shared, it may actually speed the recovery process as buyers and seller converge on valuation for the assets.
Contrarians may find a bullish signal in this verbal shift.
If you want to update this chart, click here and enter the search terms "troubled assets" and "toxic assets" separated by a comma.