Top hedge fund manager Ron Baron says that the recent market turmoil is not signaling another 2008-like crash.

In his latest quarterly letter, Baron says that after Lehman Brothers collapsed in the fall of ’08, he and his team spoke with as many business executives as they could to get a read on the situation. “We were startled to hear that significant declines in sales were taking place magnitudes larger than any we had ever heard about,” he said. “One executive after another then told us they were sharply curtailing capital expenditures and were reducing fixed operating costs and workforce by either firing workers or reducing their pay. The very negative business trends in Fall 2008 were accompanied by ‘frozen’ financial markets with businesses unable to borrow to sustain their operations. It didn’t take great analytic ability to understand that our economy was on the precipice of a much worse recession than any I had witnessed during my entire career, which began in 1970.”

Today, however, Baron says there is “not an inkling the same thing is now occurring.” U.S. banks are recapitalized; money is available and cheap; growth businesses are hiring; and many firms are beating earnings predictions. “My friend Peter Lynch used to say that markets forecast ‘nine of the past five recessions,'” Baron writes. “Hopefully, this will be another of those instances when markets got it wrong.”

Baron also says stocks are cheap, and yield more than 10-year Treasury bonds, a rare historical occurrence. Why, then, have markets been swinging so wildly lately, especially on the down side? He says a big reason is computer and high-frequency trading. “High frequency trading allows investors to ‘panic’ and buy and sell at inopportune times, in our opinion, when events like European sovereign debt issues and disagreements between politicians become front page news and scare individual investors who watch television programs like ‘Markets in Turmoil,'” he writes.

Click here for a PDF version of Baron’s letter.