Is this a contest? To see which newspaper can get the most stuff wrong? The WSJ now has its own entry -- today's article on "Lessons of the Financial Crisis -- One Year Later."
Among other so-called lessons, are the following:
"Diversification doesn't always work." Really? How would a portfolio of 35 % stocks, 35 % corporate bonds and 30 percent treasuries have done in the past year? Only stocks, in this group, are down year to year. So, how did diversification fail? Only if diversification is taken to mean owning non US stocks or owning "alternative assets." Non US stocks and alternative assets give you almost no real diversification as compared, for example, to owning treasury bills. The idea behind diversification is to own different kinds of assets, not assets that are more or less all the same kind of asset but just have different names and countries of origin.
Here's another laughable lesson:
"Government works. The aggressive steps by the government seem to have helped avert an even deeper recession." Oh, really. One could make precisely the opposite argument. That government policy in September and October of 2008 created a climate of uncertainty and fear and led to the collapse of consumer confidence and spending.
I guess WSJ doesn't want the NY Times to own the only dunce cap for poor news coverage.
