Barry Ritholtz at The Big Picture cites this interesting discussion on the nascent US recession. In a Barron's interview, Gabelli mutual fund manager Larry Haverty says "We are not getting a classic recession, probably due to the fact that inventory management has been so much better than it was 30 years ago, largely due to computers."

As Ritholtz says, this will allow corporate America to manage the slowdown efficiently, but not avoid it. From an investment standpoint, this makes me think that we are less likely to see shocking quarterly results from a manufacturing or import/export-oriented company. Those companies have learned to use computers responsibly, and FASB & SEC rules mostly keep them honest.

But there is a sector that continues to use computers for harm instead of good, and without decent regulatory oversight: investment banks. Between the over-reaching deals private equity has done, the dubiously rated securities based off sub-prime mortgages, and the massive, uncontrolled use of derivatives, it seems inevitable that an investment company will bite the dust during this recession. As Buffett says, it's only when the tide goes out that you can see who has lost his pants.

Bill Gross runs the bond funds for PIMCO. PIMCO has more than $687 billion in assets under management which is more than I have in all my pants pockets combined, so we might as well listen to him. Gross writes quoting Buffett, "society should place an initial emphasis on abundance but then should continuously strive to redistribute the abundance more equitably." Following that reasoning, Gross continues "the wealthy fire back ... that they can more efficiently redistribute wealth than can the society that provided the basis for their riches in the first place." Gross disproves the narrower point by citing the typical parade of self-indulgence on which many rich spend their money. But rather than argue details, it seems safe to look at all countries where taxes do not attempt to redistribute income. Think of any you like, but Saudi Arabia, Brunei and several central African countries past and present come to mind. Not exactly the result to which most citizens aspire.