Comments for Roubini: "Reflections on the latest sucker’s rally"

CRbot says:

This comment thread has been HALO-IZED by CRbot.

http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/7221204640070283145

CRbot Sat Mar 14 21:12:04 2009 CDT #

Nemo says:

Roubini will be right until he is wrong.

Nemo Sat Mar 14 21:13:00 2009 CDT #

Anonymous says:

:-P Someone that gets it

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Anonymous Sat Mar 14 21:48:16 2009 CDT #

Anonymous says:

The market will be wrong until it is right.

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Anonymous Sun Mar 15 19:17:57 2009 CDT #

nova says:

We are doomed. Who hated cats so much as to name a bounce after them?

Anyways... I wrote another chapter about what life is going to be like after the economy crashes.

Excerpt:

The common areas were unkempt. Street signs, like a Stop sign, and a No Parking sign had been hit and were either mangled or snapped off at the base. They had not been replaced. Trash was scattered on both sides of the road. The street gutter had not been cleaned out of the past winters sand and oak leafs. Graffiti had been spray painted on the sides of empty buildings and had not cleaned off. The business district looked like it had gotten ready for the arrival of a hurricane and then decided not to take down the plywood when it had passed. People were drinking in public and not bothering to hide it. On one corner a black man, dressed in clean clothes, and otherwise normal looking was screaming “God Bless You” over and over. This was punctuated by fits of laughter and wide grins. He was probably the happiest guy in town.

For more, plus posts by other CR people

http://afterthecrash.net

nova Sat Mar 14 21:15:02 2009 CDT #

Magma says:

When things get really bad the street signs get stolen for the scrap value. It also hinders the out-of-town police from navigating when you are looting. There are many many levels of desperation on the way down.

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Magma Sat Mar 14 21:44:29 2009 CDT #

wiserd says:

When things get really bad the street signs get stolen for the scrap value. It also hinders the out-of-town police from navigating when you are looting.

That would have worked, pre-GPS. But for someone with GPS, street signs are redundant. As long as the satellites stay up...

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wiserd Sun Mar 15 01:16:28 2009 CDT #

Belisarius6 says:

A dead cat bounce comes from the species' amazing ability to survive falls (downturns) and keep on living (resume normal upward market trend). As a result after any fall people are expecting the cat to get up and walk away - which is when everybody wants to get back into the market. But if the market is still going down (i.e. the cat's still figuratively 'dead') any perceived upward movement can only be due to Newton's third law - the proverbial "dead cat bounce". A trap for the investor.

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Belisarius6 Sun Mar 15 12:03:47 2009 CDT #

Anonymous says:

It was a dark and stormy recession. In she walked, Lady Depression. Her sadness was almost sexy but her flat double bottoms didn't do it for him

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Anonymous Sun Mar 15 19:20:35 2009 CDT #

Barley says:

Lets have a competition.

I say 2009, Q1 GDP come in at -6% (based on trade figures and flow of funds)

Barley Sat Mar 14 21:16:50 2009 CDT #

goadam says:

Bingo!

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goadam Sun Mar 15 19:22:01 2009 CDT #

joe shmoe says:

Now is a good time to either agree or disagree with Nemo, maybe, or maybe not.

joe shmoe Sat Mar 14 21:18:59 2009 CDT #

Money Man says:

Cats have 9 lives and crappy markets sputter about that many....

Money Man Sat Mar 14 21:20:20 2009 CDT #

Lawyerliz says:

The :-E emoticon was not a belch emoticon, but a reflection of the fact that one of my precious brain cells had kept itself busy remembering that Midas Mulligan was the banker, and other purportedly useful brain cells were willing and eager to dredge that fact up.

If you try to bounce a live cat, you will get scratched. Cats are dangerous animals if so disposed.

No improvement until the 3rd, 4th or 5th half!! I think Roubini has actually got more gloomy. I didn't think it was possible.

Lawyerliz Sat Mar 14 21:33:29 2009 CDT #

RockyR says:

The Foot in mouth emoticon was not a belch emoticon, but a reflection of the fact that one of my precious brain cells had kept itself busy remembering that Midas Mulligan was the banker, and other purportedly useful brain cells were willing and eager to dredge that fact up.

I left a post on the Atlas Shrugged discussion on the last thread. Don't really want to bring "that discussion" into this thread.

Many thanks.

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RockyR Sat Mar 14 21:58:47 2009 CDT #

Hal says:

Roubini has always been right and if he errs it has been because he has been too optimistic. We are in a bear trap, suckers' rally for sure. Wait and see.

Hal Sat Mar 14 21:35:27 2009 CDT #

dr munch says:

Roubini's an idiot. He could have made 60% on citigroup in one week. /snark

dr munch Sat Mar 14 21:36:20 2009 CDT #

Broward Horne says:

I agree with Roubini, I think the percentage bet is a sucker's rally tacitly supported by the U.S. gov't for its own purposes (scamming another month of funding from hapless Chinese dupes).

Roubini versus Krugman meme -

http://www.realmeme.com/roller/page/realmeme?entry=krugman_pwns_roubini

People everywhere in America agree... Krugman pwns Roubini (but Roubini is probably right).

Broward Horne Sat Mar 14 21:36:37 2009 CDT #

KR says:

I think the second derivative's positive slope is due in part to the steepness of the drop. In any previous housing bubble collapses there was more owner equity in the house. Subprime is another way of saying 100% financing. Pay the fees and you are in. Its too easy to walk away. So the first drop, thru the first floor was straight down with acceleration that was just shocking, shocking.

KR Sat Mar 14 21:37:42 2009 CDT #

Threads Must Die (aka bobn) says:

dr munch says:

Roubini's an idiot. He could have made 60% on citigroup in one week. /snark

Uh, would you still read him if you knew he played the market? He'd be scum like Cramer.

Threads Must Die (aka bobn) Sat Mar 14 21:39:23 2009 CDT #

ComradeAnon says:

Wait til you lose 60% on Citi in one week...

ComradeAnon Sat Mar 14 21:41:04 2009 CDT #

Lucifer says:

Roubini is becoming bearish again.. wonder why?

Lucifer Sat Mar 14 21:42:33 2009 CDT #

Lawyerliz says:

He looked really bad in the last picture that was posted of him. Like he's really really worried.

Nitey nite good folks. :-D :* :) ;)

Lawyerliz Sat Mar 14 21:44:08 2009 CDT #

Counterpointer says:

Hehe. He says stabilization!

Gadzooks, what a joker...

C

Counterpointer Sat Mar 14 21:44:24 2009 CDT #

Anonymous says:

I have been thinking about the Titantic all afterenoon. It feels like we have hit the iceberg, the upperclass knows the ship is sinking but the trick for the PTB is to keep the steerage class in the dark until the lifeboats are away.

Anonymous Sat Mar 14 21:44:45 2009 CDT #

Steerage says:

We've been underwater, I'm not sure first class knows!

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Steerage Sat Mar 14 21:48:59 2009 CDT #

Lucifer says:

My take is that roubini does not want to be associated with the idiots in power. Maybe the lynch mobs are nearer than you think.

Lucifer Sat Mar 14 21:45:50 2009 CDT #

Anonymous says:

IMHO, the most bullish thing about this latest rally is that for the first time the press (and especially the financial press like the WSJ) is calling it a sucker rally. That HAS to be a sign of a bottom.

Anonymous Sat Mar 14 21:47:26 2009 CDT #

KR says:

There's a good video from April '08, a TVO interview Steve Pagan with Roubini on the recession length. He was forecasting a 12 to 16 month recession at that time. Four months later he edged up to 24 months, and by Mar '09 is calling a 36 month recession. Not faulting the guy, but its interesting how the horizon is changing, for everybody.

KR Sat Mar 14 21:49:44 2009 CDT #

MS says:

or 60% in one day.....seriously... the financial stocks are rent only.

Ciao
MS

MS Sat Mar 14 21:50:49 2009 CDT #

Guest says:

The political and financial mob believe this recession can be managed and they will be able to loot at will.
They may be correct but unemployment numbers may be their undoing as millions look for work and lose everything. Angry main street might create a tense political time next November.

Guest Sat Mar 14 21:51:54 2009 CDT #

Anonymous says:

Some OT humor for a gloom and doom crowd
http://www.youtube.com/watch?v=okhiJjuefPw&feature=bz301

Anonymous Sat Mar 14 21:52:46 2009 CDT #

Threads Must Die (aka bobn) says:

Until the first derivative is positive, it's still getting worse. Looking at the 2nd derivative after only a month or 2 is pure desperation.

Threads Must Die (aka bobn) Sat Mar 14 21:53:07 2009 CDT #

calmo says:

The recession is 15 mo old, Threads, but the analysis is like a chance to let everybody know you took Math 12...unlike Lily who took typin. Not a peep about the volatility...which generates the profits (not the earnings from these stocks waiting for more handouts from the Fed to prop up the shopping...and izit gettin to the shoppers?) and further heistin.

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calmo Sun Mar 15 01:50:24 2009 CDT #

lawn grass says:

Why do these executives at AIG, which many I am sure make in the upper six figures, could not forego their bonuses when their company is insolvent? Why could not the government say to these insolvent people, hey no bonuses, if you want some taxpayer money to keep your salary, job and company in operation? There is no reason that the 2008 bonuses should have been paid. The arrogant entitlement attitude makes me puke. Just stop the bleeding now.

You have to wonder what kind of bonus agreement is made with executives that trash a company.

lawn grass Sat Mar 14 21:57:37 2009 CDT #

Bob Dobbs says:

Looks like Roubini is on the edge of becoming as pessimistic as some here. Which is, of course, scary.

Bob Dobbs Sat Mar 14 21:58:21 2009 CDT #

lawn grass says:

Here is link tied to the above rant

http://news.bbc.co.uk/2/hi/business/7944416.stm

lawn grass Sat Mar 14 21:58:23 2009 CDT #

Broward Horne says:

"Roubini is becoming bearish again.. wonder why?"

http://www.itulip.com/forums/showthread.php?p=83348#post83348

"For example, if clear evidence of inflation arises soon, that will cause Treasury prices to fall, and in fact may be causing them to do so already. The most likely trigger is a Tax Receipt Epiphany that leads to a Fiscal Deficit Shock and sudden loss of confidence in US sovereign credit quality"

Broward Horne Sat Mar 14 22:02:59 2009 CDT #

goadam says:

Whoa dude. Don't fill this crowd in on itulip, Nemo will mess that place up.

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goadam Sun Mar 15 19:25:35 2009 CDT #

RockyR says:

CR, always the optimist.

The ship (the USA) is going to sink at some point. I feel strongly that it will happen in our lifetimes. However, it may not be in this cycle. There are signs pointing to the positive right now.

If the indicators go catastrophically negative again this cycle, then grab your life preservers because we just might be going down.

RockyR Sat Mar 14 22:03:22 2009 CDT #

alydar says:

Seems to me that all of the emphasis is being put
on the health of the banks - and all that implies. They are on life support. Out here in the real world
the bottom is not in. Definimente.

alydar Sat Mar 14 22:04:19 2009 CDT #

Doc at the Radar Station says:

Candlebox - Stand (live in Detroit)
http://www.youtube.com/watch?v=Brf7QZI_7rk

Doc at the Radar Station Sat Mar 14 22:11:07 2009 CDT #

Rob Dawg says:

KR says:Today, 7:49:44 PM PDT
There's a good video from April '08, a TVO interview Steve Pagan with Roubini on the recession length. He was forecasting a 12 to 16 month recession at that time. Four months later he edged up to 24 months, and by Mar '09 is calling a 36 month recession. Not faulting the guy, but its interesting how the horizon is changing, for everybody.

But that's exactly correct. In Apr 08 this was going to be a 12 month recession. Then came TARPonomics, bailouts, shotgun marriages, etc. The data now indicate 36 months. Everybody gets a do over whenever the rules get changed.

Rob Dawg Sat Mar 14 22:12:15 2009 CDT #

monta\'s ankle says:

AIG paying bonus money

http://www.nytimes.com/2009/03/15/business/15AIG.html

Change I can believe in!
See, even nationalization is a joke.

I'm having a little bit of trouble understanding why my tax dollars are going to be sent to AIG executives.

Any takers on my question?

monta\'s ankle Sat Mar 14 22:12:44 2009 CDT #

nincompoop says:

Because of foreign investment in or impacted by AIG. No basis just a gut feeling.

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nincompoop Sun Mar 15 03:02:53 2009 CDT #

Anonymous says:

Is the AIG bailout money actually quietly keeping your 401K GIC's and pensions intact?

Anonymous Sat Mar 14 22:13:47 2009 CDT #

RockyR says:

"Any takers on my question?"

No. It just sucks. It's cronyism taken practically to its logical extreme.

RockyR Sat Mar 14 22:15:21 2009 CDT #

Anonymous says:

Roubini is a frontrunning, "faux elite-underground", doom-gloom shill for gov't/banking co-interests...he says bad while others say good!...when goes bad, there's an inkling in J6P of well...i knew it was too good to be true...this inkling softens the blow and lubricates the next maneuver for the empowered

Anonymous Sat Mar 14 22:15:31 2009 CDT #

RockyR says:

"Roubini is a frontrunning, "faux elite-underground", doom-gloom shill for gov't/banking co-interests...he says bad while others say good!...when goes bad, there's an inkling in J6P of well...i knew it was too good to be true...this inkling softens the blow and lubricates the next maneuver for the empowered"

Who's wearing the tin foil, now?

OK. I'm out for a bit.

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RockyR Sat Mar 14 22:17:42 2009 CDT #

PonziMonetizaCoruptiCapitalism says:

pet peeve warning:

http://www.yahoo.com/s/1043693

mgm, kerkorian's shop, may break itself up to lure potential buyers as it races to raise the more than $1.5 billion it owes in bond payments and interest this year

this guy spent the last 10 years trying to buy auto houses, and can't manage his own.

something ponziesque about this guy....very shady.

PonziMonetizaCoruptiCapitalism Sat Mar 14 22:16:33 2009 CDT #

1 currency [yogi] says:

When your business is named "The Mirage" the Ponzi aspect doesn't come as a total surprise. =-O

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1 currency [yogi] Sun Mar 15 01:23:45 2009 CDT #

KR says:

"You have to wonder what kind of bonus agreement is made with executives that trash a company."

Astute question indeed. I have been thinking that 50 years from now its one of the things historians will point to as a fundamental behavioral flaw - the twisted notion of rewarding failure in order to protect the sacred status of a banker class, meanwhile a global economy was gutted.

KR Sat Mar 14 22:20:00 2009 CDT #

Anonymous says:

I have a question - why do they keep hauling out the old bromide about the stock market predicting the upturn? When the market was making new highs in late 2007 even as the sub prime crisis was exploding were they predicting a growing economy 9 months later? We know how well that worked. In fact I don't believe that any of the market behavior in the last 15 years as any predictive value whats so ever.

Anonymous Sat Mar 14 22:21:21 2009 CDT #

Baca says:

"In fact I don't believe that any of the market behavior in the last 15 years as any predictive value whats so ever."

Absolutely correct. The may be a coincident indicator, but certainly not a leading indicator. That's been busted for awhile - as the markets became more manipulated.

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Baca Sun Mar 15 01:03:19 2009 CDT #

Broward Horne says:

"It's cronyism taken practically to its logical extreme"

No, it's merely the "Best and Brightest" among us extracting the tribute due them for their creative abilities.

Broward Horne Sat Mar 14 22:21:28 2009 CDT #

Best and Brightest says:

It is American Idol actually-we will not allow Olympus to crash to the ground

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Best and Brightest Sat Mar 14 23:08:03 2009 CDT #

PonziMonetizaCoruptiCapitalism says:

monta, your tax dollar's are'nt.

You must know by now that the US of A runs Massive trade & current account deficit's. You should just think of your dollars going to all the things that we really need, and the excesses(bailout's, bonuses to banker's etc...) are borrowed from the chinese(ROW) and various caribbean shell accounts.

that should make you happier.

PonziMonetizaCoruptiCapitalism Sat Mar 14 22:22:06 2009 CDT #

Anonymous says:

aig is letting out the bonus pool. mostly to the crooks in the financial unit.

http://www.nytimes.com/2009/03/15/business/15AIG.html?hp

why is nobody going to jail instead? they talk about being contractually obligated to commit robbery. well, if the treasury would not have given them 200b dollars they would be bankrupt and at least some would be in jail, and we would not be talking about being contractually obligated to pay anybody anything.

we need to get a tall tree, put it on the lawn in the mall in dc, and lead the ceo's of these bastard companies up the steps one by one til somebody in congress gets enough balls to do something.

Anonymous Sat Mar 14 22:22:46 2009 CDT #

PonziMonetizaCoruptiCapitalism says:

The most likely trigger is a Tax Receipt Epiphany that leads to a Fiscal Deficit Shock and sudden loss of confidence in US sovereign credit quality"

why can't Jas see this. He's in the deflationary depression camp.

PonziMonetizaCoruptiCapitalism Sat Mar 14 22:25:31 2009 CDT #

Anonymous says:

Wow, that AIG bonus thingy is upsetting. Dylan Ratigan where art thou?

Anonymous Sat Mar 14 22:26:41 2009 CDT #

usmegatrends.blogspot.com says:

This article would suggest that the over-bought rally will become an over-sold rally again... Let's say new bottom at 6,000.

usmegatrends.blogspot.com Sat Mar 14 22:27:05 2009 CDT #

fried says:

I think it was Rob Dawg who wondered about planes being parked in the desert...here's a piece on those parked at Victorville ...with great photos...

http://www.latimes.com/business/la-fi-boneyard15-2009mar15,0,6631747.

fried Sat Mar 14 22:27:18 2009 CDT #

usmegatrends.blogspot.com says:

It this the equivalent of Toyotas being parked on ships due to the glut?

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usmegatrends.blogspot.com Sat Mar 14 22:28:08 2009 CDT #

Counterpointer says:

Planes in the desert? That was me and nova. Whitetails.

C

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Counterpointer Sun Mar 15 03:50:46 2009 CDT #

fried says:

Sorry Counterpointer. When I think transport sector, I think Dawg and energyecon....my bad. Hope you liked the pics anyways.

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fried Sun Mar 15 09:50:57 2009 CDT #

Anonymous says:

I just got a letter from the IRS. They said they owed me $24,000 for a refund check, but settled for only $1,700.

Anonymous Sat Mar 14 22:28:26 2009 CDT #

darkmatter says:

we need a million taxpayer march up the steps of congress demanding the ceo's be hauled in right now so we can tar and feather them. if they aren't delivered, we can start with a few congressmen.

darkmatter Sat Mar 14 22:28:49 2009 CDT #

usmegatrends.blogspot.com says:

Bonuses for what? From John Thain?

usmegatrends.blogspot.com Sat Mar 14 22:29:08 2009 CDT #

Broward Horne says:

"why can't Jas see this. He's in the deflationary depression camp"

Only Jas can answer that but I suspect he's betting on the historical odds. The past four U.S. depressions have been deflationary, i.e. the gov't chose bonds before born-n-bred dopes.

Broward Horne Sat Mar 14 22:29:57 2009 CDT #

Bubblisimo Gerkinov says:

this guy spent the last 10 years trying to buy auto houses, and can't manage his own.

something ponziesque about this guy....very shady.

... or, like many individuals and companies, MGM was operating on the deluded assumption that everything would keep going up indefinitely reinforced by Enron like accounting.

Bubblisimo Gerkinov Sat Mar 14 22:30:42 2009 CDT #

usmegatrends.blogspot.com says:

This article would suggest that the over-bought rally will become an over-sold rally again... Let's say new bottom at 6,000.

I apologize for the re-post.

usmegatrends.blogspot.com Sat Mar 14 22:30:46 2009 CDT #

usmegatrends.blogspot.com says:

Aloow mark to market and you can create your own reality

usmegatrends.blogspot.com Sat Mar 14 22:32:09 2009 CDT #

Anonymous says:

You published an excellent diagram - "Four Bad Bears".

According to it, if this is the market bottom then the worst world economic crisis in modern history will also have the shortest bear stock market. And by a wide margin - 17 months vs 30+ months of Tech Crash and Great Depression. I find it hard to believe it.

Also, research suggests that _banking_ crisis tends to cause longer recessions, not shorter. Dot-com bust lasted 30 months without any banking crisis at all.

So if things pick up soon, it'll be a miraculous outcome. From what I've seen so far, we've been somewhat short in the miracle department..

Anonymous Sat Mar 14 22:34:41 2009 CDT #

PonziMonetizaCoruptiCapitalism says:

MGM was operating on the deluded assumption that everything would keep going up indefinitely reinforced by Enron like accounting.
Like this comment? [yes] [no] (Score: 0 by 0)Community assigned karma score: 0 by 0Mark as offensive reply

nah, seriously this guy was wrppaed around someone's finger.A banker's Pawn.He was all in the deal with GM during their 2005 correlation crisis, when the cds was first poised to blow sky hi. BAC and Kk, were in bed with a military tuck.

PonziMonetizaCoruptiCapitalism Sat Mar 14 22:36:49 2009 CDT #

punditry says:

please don't paint me in the doomer corner, but i'm looking forward to another Sunday afternoon Mickelson Implosion.

punditry Sat Mar 14 22:42:18 2009 CDT #

Anonymous says:

U.S. business leaders urged lawmakers on Thursday to act quickly on healthcare reform, saying American companies were losing out to other countries with cheaper healthcare and healthier workers.
http://www.iii.co.uk/news/?type=afxnews&articleid=7218478&action=article

Hurry Oh bama before the fools figure out you don't get somthing for nothing. Hurry! 8-)

Anonymous Sat Mar 14 22:43:47 2009 CDT #

Jay D. says:

..........Qimonda AG to cease all DRAM production lines......

http://eetimes.eu/showArticle.jhtml?articleID=215900179

.........as expected this will be the blessing for the rest of the momery chip makers .......

Jay D. Sat Mar 14 22:49:12 2009 CDT #

bearly says:

OOOOOhhh, I want to see how market participants react to bernanke stepping in when treasury demand begins to wane.

Sheer panic is my guess because that *is* the abyss. A deflationary depression might be the best outcome but somehow the turds at the Fed with the lever that only turns a way, think otherwise.

We'll see.

bearly Sat Mar 14 22:55:57 2009 CDT #

Threads Must Die (aka bobn) says:

that will cause Treasury prices to fall, and in fact may be causing them to do so already. The most likely trigger is a Tax Receipt Epiphany that leads to a Fiscal Deficit Shock and sudden loss of confidence in US sovereign credit quality"

Broward Horne

Which causes more downward pressure on Treasuries, causing an adverse feedback loop (aka vicious cycle). I hate to think about where that one ends.

Threads Must Die (aka bobn) Sat Mar 14 22:58:02 2009 CDT #

Comrade De Chaos says:

I disagree. In the last business cycle we had a bubble in the RE market and not the stock market. So when comparing the current market/crisis to the one during the Great Depression, one has to remember that there was a huge BULL EQUITY bubble prior to 1929. In the last seven years market has barely recovered to 01 level while most of the none financial US firms did have very profitable cycle. Also the structure of the supply chain is very different, the extra capacity within the US firms is destroyed and redirected much faster than ever before.
Look, I am not saying everything in peachy, however the supply side of our economy (beyond financial sector) has plenty of aces left in the pocket. What drives the market so much into the negative is the fear of uncertainty. In a way we haven't seen much hardship relative to previous generations, that's why most people don't know how to deal with such a degree of unknown. A while from now majority will realize that 85+% of us still have jobs & our lifestyle while became simpler did not deteriorated that much. The greed will kick in and markets will recover to a certain degree that will resemble rational evaluations and not those driven by "animal spirits".

Comrade De Chaos Sat Mar 14 23:01:35 2009 CDT #

doug r says:

Yeah, but with no MEW or HELOCs, people just don't have the cash to spend to keep the economy going. Once the housing prices settle down in a couple of years, we'll see a new equilibrium.
If the infrastructure spending works, the cash could start flowing sooner-a little inflation could help here.

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doug r Sat Mar 14 23:38:49 2009 CDT #

Alo says:

Oh, I don't know. If you add up all of our "aces" (what are they again?) and subtract that pesky uncertainty (which includes mere trifles, such as as banks and insureres hiding insolvency behind their fancy skirts), you still wind up in negative territory.

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Alo Sun Mar 15 09:14:56 2009 CDT #

goadam says:

I see we have a utopist.

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goadam Sun Mar 15 19:30:51 2009 CDT #

Broward Horne says:

" I hate to think about where that one ends"

If we're lucky and they can manage the rate-of-change... then a repeat of the last cycle, i.e. rising interest rates for the next twenty years.

House prices & real estate stagnant for a long time, just like Japan.

Broward Horne Sat Mar 14 23:02:41 2009 CDT #

Threads Must Die (aka bobn) says:

Is the AIG bailout money actually quietly keeping your 401K GIC's and pensions intact?

So funny you should ask. My 401K GICs are all with various insurance companies. (I only yesterday learned that they were called GICs - before that they were just mysterious "contracts with insurance companies". HIG, PRU and MET are somewhere around half the whole shebang. I used to have 100% of my 401k there. Last October I moved 3/4 out - now I'm wondering if I left too much.

Threads Must Die (aka bobn) Sat Mar 14 23:03:44 2009 CDT #

RE says:

I look at it differently. I believe that this contraction is a secular contraction with built-in feedback loops as the standard engines for a recovery will not be revived easily.

The U.S. has an economy that is primarily services driven. A services dominated economy has much more of a built-in recognition lag as the transmission mechanism is indirect.

What we have observed is that manufacturing economies have been hit much harder and earlier. They are first in line as a product’s useful life can be extended in most cases quite easily without a significant loss in productivity or convenience. This acts as the discretionary portion of the cycle and the retail trade in the U.S. has therefore been hit first and hardest to date.

The second leg happens as a result of lack of investment and increased layoffs. As we have seen with CRE, because larger scale projects involve have so much committed capital the tendency is to complete them even in the face of a dramatic slowdown in business. An important point in this regard is that, aside of housing, many businesses were not seriously impacted until the 3rd to 4th quarter of 2008.

In addition, government expenditures which make up about 30% of GDP are impacting the economy with a tremendous lag. It is only now that states and municipalities are starting to seriously cut back. Up till now increased Federal spending has cushioned the fall but increased Federal spending even at the present high levels has not been able to stop the downward trend. With Federal spending at a plateau, the cuts at the state and municipal level will now have an increasingly negative impact.

IMO the negative feedback loop will be in effect until the economy can shed a significant part of its debt load (personal and government) which is extremely difficult in a deflationary environment. I presently don’t see any policy on the table to address this key issue and therefore cannot see a sustained recovery in the foreseeable future.

RE Sat Mar 14 23:07:38 2009 CDT #

Comrade De Chaos says:

Also if you must invest:
Please remember that not all of the sectors will recover at the same rate. And one of the largest mistakes one can make is picking firms and sectors that have declined the most. For example, it will take the finance industry a while to work through toxic assets the same as it took tech industry a while to work through over capacity. Also making a single or just a few bets is way to risky in any environment especially the current one. Finally don't invest money you might need in the near future. If there is a certain value out there, it will not disappear. There is no need to rush.

Comrade De Chaos Sat Mar 14 23:08:18 2009 CDT #

Threads Must Die (aka bobn) says:

why can't Jas see this. He's in the deflationary depression camp.

PonziMonetizaCoruptiCapitalism

This comes *after* the deflationary depression in the disaster cookbook.

Threads Must Die (aka bobn) Sat Mar 14 23:08:25 2009 CDT #

cd says:

chaos,
ummm the market hit all time high in 07 (bubble), supplies mean squat when everyone is in debt, hardship is a personal story, yours being different than joe out of work and the animal spirits only work for native americans..not jane and jimmy middle class...

cd Sat Mar 14 23:11:05 2009 CDT #

Broward Horne says:

"In the last seven years market has barely recovered to 01"

That's because this is not the start of the Crash & cycle. The Crash began in 2001. This is a continuation.

Broward Horne Sat Mar 14 23:15:46 2009 CDT #

Baca says:

"That's because this is not the start of the Crash & cycle. The Crash began in 2001. This is a continuation."

You got that right, Broward. This is the biggest double top ever - it took a long time to create and will take a long time to correct.

Parent Post

Baca Sun Mar 15 01:08:08 2009 CDT #

Comrade De Chaos says:

"The U.S. has an economy that is primarily services driven"

That’s a regan-clinton-bush media feed picture of the economy. The real economy is efficiency driven - the real growth comes from productivity and only productivity gains. The more you can make out of given resources, the higher economic growth.
I'll give an example:
Let's say you ve got a small neat forest. You have two choices, cut the forest in two years and cut it in ten years. If you cut it out in two years, it will produce abnormal growth numbers vs, cutting it in ten years. Does it mean those numbers translate into economic growth? The answer is obvious - not.
However if you come out with a new forestation methods that allow abnormal tree growth within one year, then cutting your forest in two years will produce better results, because of sustainability of your resources/better efficiency, etc.
(all hail genetic engineering, :) )

Comrade De Chaos Sat Mar 14 23:15:59 2009 CDT #

alex black says:

I had a nightmare that I was mugged, and when brought in to look at a police line-up, this is what I saw: O:-) >:o :) ;) :'( 8-) :( :* :-D =-O =-X :-[ :-$ :-P :-E

alex black Sat Mar 14 23:17:33 2009 CDT #

Anonymous says:

http://www.youtube.com/watch?v=NDlIQToorpo

Max and Stacey twittercast covering the bases on the ongoing corruption. 2.5 stars

Anonymous Sat Mar 14 23:19:56 2009 CDT #

ShortCourage says:

Comrade De Chaos said,
A while from now majority will realize that 85+% of us still have jobs & our lifestyle while became simpler did not deteriorated that much. The greed will kick in and markets will recover to a certain degree that will resemble rational evaluations and not those driven by "animal spirits".

IMHO, you are way off on this. Markets will eventually decline to rational valuations. Today's stock prices only seem irrationally cheap to some who think that earnings will go back up to the levels that they attained during a credit bubble. They will not. Not for a long time. Deleveraging and deflation will drive them lower and keep them low for years.

Unless of course the government succeeds in reflation. It might, but I doubt it.

ShortCourage Sat Mar 14 23:23:01 2009 CDT #

Cliff\'s Diving School says:

When will these guys learn? It's the 3rd derivative, the rate of change of the rate of change of the decline. Now that's what I'm watchin'

Cliff\'s Diving School Sat Mar 14 23:23:12 2009 CDT #

Comrade De Chaos says:

"chaos,
ummm the market hit all time high in 07 (bubble), supplies mean squat when everyone is in debt, hardship is a personal story, yours being different than joe out of work and the animal spirits only work for native americans..not jane and jimmy middle class..."

well all you ve got to do to settle it is to look at the market gain during 21 -29 and 01 -07. Animal spirits do play huge role in our decision making. If modern economic models could incorporate our irrational behavior (animal spirits) , the forecast would be much more accurate. We all overestimate our rational thinking, don't believe me ask anyone who studies behavior finance / economics.
Yeah hardship is a personal story, however hardship of an average joe during the 1850 - 1950 period of time was much harsher then anything we are accustomed.

Comrade De Chaos Sat Mar 14 23:23:36 2009 CDT #

Comrade De Chaos says:

"Today's stock prices only seem irrationally cheap to some who think that earnings will go back up to the levels that they attained during a credit bubble."
I don't think the earnings of "big pharma" or tech sectors had anything to do with credit or leverage. I am not saying that DOW should be 20K or 15K, however one economy will recover there will be plenty of firms that are undervalued or fairly valued given their potential earnings. Also, you ve got to remember that the near future earnings are as important of defining a value of a company during the normal times as current earnings. (given a going concern for a firm is not a question.)

Comrade De Chaos Sat Mar 14 23:28:52 2009 CDT #

RE says:

That’s a regan-clinton-bush media feed picture of the economy. The real economy is efficiency driven - the real growth comes from productivity and only productivity gains. The more you can make out of given resources, the higher economic growth. ...

My point about a services driven economy was not a qualitative comment but to illustrate why a services driven economy reflects a slowdown differently than a manufacturing based one.

As to your productivity comment, I have quite a different view as I have stated here before. I believe that we have hit the inflection point where increased productivity will lead to slower growth as more and more of the “productive economy” i.e. people will be sidelined as a result.
Lower national income via increased productivity will not help a lot.

As a side note, I don’t think genetic engineering will be our salvation but actually the end of our species at the top of the heap.

RE Sat Mar 14 23:29:48 2009 CDT #

Threads Must Die (aka bobn) says:

As a side note, I don't think genetic engineering will be our salvation but actually the end of our species at the top of the heap.
RE Sat Mar 14 22:29:48 2009 MST

Meaning we make something so terrible it kills us all, or that we make our successors? Or both?

Threads Must Die (aka bobn) Sat Mar 14 23:32:42 2009 CDT #

Comrade De Chaos says:

Short Courage
p.s. when it comes to financial industry, I do agree it will take number of years to recover. Still it will depend on the particular business model of a given company, the firms that are involved only in brokerage or asset management will probably recover first. Many of those, especially smaller firms are position to benefit from the collapse of titans, etc. :)

Comrade De Chaos Sat Mar 14 23:33:30 2009 CDT #

Cliff\'s Diving School says:

"Animal spirits" I think I'll try them. My vegetable spirits aren't having the same impact these days.

Cliff\'s Diving School Sat Mar 14 23:33:31 2009 CDT #

ShortCourage says:

Comrade De Chaos,

Do you really think tech earnings were not influenced by the credit bubble? Wow.

First of all, you must realize that consumers purchased many tech gadgets with MEW money. Second, you might consider that many businesses that purchased tech products would not have existed were it not for the credit bubble. Or at least not at the levels that they existed. Government spending (on tech and whatever else) would also not have been at such high levels without the credit bubble.

Not sure how you can make that statement about tech not having anything to do with credit. As far as leverage goes, you might check the levels of margin debt at the recent market peak. It was about the same (mabye more, if I remember correctly) than during the dot-com bubble.

ShortCourage Sat Mar 14 23:34:54 2009 CDT #

Cliff\'s Diving School says:

Well, the thing that calms me down about the AIG bonuses is that they're getting paid out in dollars. Somehow, it doesn't seem so bad that their pile of wampum is bigger than mine. Now, if the money was going to be worth something down the road, that would be different.

Cliff\'s Diving School Sat Mar 14 23:36:53 2009 CDT #

RE says:

Meaning we make something so terrible it kills us all, or that we make our successors? Or both?

We are creating our successors as we speak.

Have a look at the second part of this video: the arrival of Homo evolutis. The first part is interesting but nothing new for people here:

http://www.ted.com/talks/juan_enriquez_shares_mindboggling_new_science.html

RE Sat Mar 14 23:37:51 2009 CDT #

unhappyCakeEater says:

never heard of this guy before- hes got a lot to say. im still digesting it
Martin Armstrong

unhappyCakeEater Sat Mar 14 23:38:11 2009 CDT #

Comrade De Chaos says:

well RE, historically higher productivity was always main engine of higher wages. Also under productivity I don't necessary mean Manufacture, etc.
I am going to quit such an argument though, I try to avoid speculations about future. (no pun intended) Whether robotization will harm a wage of an average worker, I don't know. My guess would be not.
As of genetic revolution, well it won' t necessary be a game changer in a near future, however in the long run results should be promising -potential colonization of mars, etc.

Comrade De Chaos Sat Mar 14 23:40:03 2009 CDT #

Anonymous says:

http://business.theglobeandmail.com/servlet/story/RTGAM.20090313.wtakingstock0314/BNStory/robColumnsBlogs/home

Janet Tavakoli warnings. I thought she might have been Tanta at one time. Obviously I was wrong.

Anonymous Sat Mar 14 23:43:29 2009 CDT #

Hazard says:

Comrade De Chaos, which gov't agency and/or Wall Street firm do you represent?

Hazard Sat Mar 14 23:44:21 2009 CDT #

Anonymous says:

I think Roubini is right on a global basis but I'm not sure that the U.S. won't come out sooner. Remember the Depression when the U.K. and similar import oriented economies suffered far less than the surplus countries, specifically America. The tables are turned this time.

That only implies to my mind a weak recovery sooner than others with the potential for real catastrophe just kicked down the road.

Anonymous Sat Mar 14 23:48:53 2009 CDT #

alex black says:

Can we get Home Evolutis to colonize DC instead of Mars?

alex black Sat Mar 14 23:49:25 2009 CDT #

blert says:

Refi the existing mortgages that underlie the RMBS...

AND CASH THEM OUT.

Use a Resolution Mortgage Bank: a direct arm of the USG...

The new mortgages: 2.5% 15year term, with full recourse.

Concentrate on the good credits first. There is a ton of value in the national mortgage pool. Many markets have prices that are not irrational and should be the first mortgages tackled.

The deal doesn't break the Treasury while resolving what the RMBS are worth as they get PAID OFF much quicker than the market expects right now.

Next lift all of the limits on SBA lending and change its name to Suffering Business Assistance. Permit the Agency fraction of those loans to be securitized. This mechanism provides private industry with credit at reasonable rates. It also permits the commercial banking sector a way to earn their way out.

The syn-CDO market needs to be unwound 'nunc pro tunc,' yesterday. If this is not defused, investor confidence in the truth and sanity of TPTB will be wiped out.

The solution is to go back to the future and start with structures that the market knows and trusts. Shut down all of this new age finance which has no market cred left and no chance of earning it.

Simplify.

BTW the actual cost to build housing is not really plunging. No new supply is going to be tooled up for years. So in most markets prices have already reached levels low enough that they undercut any prospective new construction.

Here and there some fools are still building like mad. But new construction is destined to collapse almost entirely this year.

Then population growth should begin its steady pressure on housing inventory. Still we have to get through a valley of tears as transaction prices are going to head directly lower from here.

Can you say Pick-A-Default ? Alt-A ? ...

blert Sat Mar 14 23:50:27 2009 CDT #

Anonymous says:

never heard of this guy before- hes got a lot to say. im still digesting it

Other side of the story from Cassandra does Tokyo. Caveat emptor

http://nihoncassandra.blogspot.com/2009/01/enigma-of-martin-armstrong-revisited.htmlo.

Anonymous Sat Mar 14 23:51:07 2009 CDT #

Comrade De Chaos says:

"Comrade De Chaos,

Do you really think tech earnings were not influenced by the credit bubble? Wow."

I think the credit bubble was not the major factor that influenced earnings for many firms outside RE and Finance related businesses.
You ve mentioned, apple, well the cost of making those gadgets have been falling by a lot during the last ten years. Lower cost usually spells better margins, especially if you are on the end of the supply chain - design/marketing. As for the Internet technology, well most of it was not profitable pre 2003. It is only in the last several years when firms learned how to get the most out of computer revolution.
Just look at the Wall Mart cost savings due to the better logistic. And the potential of IT revolution is even higher - better energy management, manufacturing process optimization, etc. It is simple, the potential to make more out of less in the near future is out there.

I actually think the credit bubble did hurt potential earnings in many other sectors beyond RE & Finance. The reason is simple, when we spend high proportion of GDP on RE we spend less on investment into the promising future technologies.

Comrade De Chaos Sat Mar 14 23:52:30 2009 CDT #

Anonymous says:

try again

http://nihoncassandra.blogspot.com/2009/01/enigma-of-martin-armstrong-revisited.html

Anonymous Sat Mar 14 23:54:49 2009 CDT #

RE says:

never heard of this guy before- hes got a lot to say. im still digesting it

Very, very smart guy. Good friend of Macro Man.

RE Sat Mar 14 23:55:30 2009 CDT #

Comrade De Chaos says:

"Hazard says:Today, 9:44:21 PM PDT
Comrade De Chaos, which gov't agency and/or Wall Street firm do you represent?"

I represent mostly myself. And while I do work in "finance", the company I work for is rather small and very unknown. Hopefully demise of WS will give guys like us a real fighting chance. :)
Or else I just hope I 'll have enough guts not to become one of those clones, 8-)

Comrade De Chaos Sat Mar 14 23:59:04 2009 CDT #

cd says:

chaos,
animal spirits will not come out for a long time..when finance and real estate groundhog puxatony phil reared his head from 01-08 he not only predicted a cold winter that will last 7-10 years..he guaranteed it..

Debt doesnt sleep, it hovers over you like a bad dream...then it hangs around all day under your cubicle practicing the script for tonights dream...

unless we get a jubilee on personal debt and ficos...animal spirits will be the buffalo about to run over you in a the never ending dream called debt...

cd Sun Mar 15 00:02:04 2009 CDT #

Comrade De Chaos says:

good night all, been a pleasure. ;)

Comrade De Chaos Sun Mar 15 00:02:28 2009 CDT #

Comrade De Chaos says:

just to be clear,
animal spirits are our instincts that often do fail us due to fast changes that in our society in the last 200 years. The best example I could think of is unreasonable breaking during the traffic jam because someone pulled to the shoulder and similar. Other famous example is buying un-needed stuff just because everyone else bought it even when we don't actually like it, etc.

Comrade De Chaos Sun Mar 15 00:08:25 2009 CDT #

EvilHenryPaulson says:

Comrade De Chaos,
to be clear, what you are saying is precisely nothing

Parent Post

EvilHenryPaulson Sun Mar 15 00:13:37 2009 CDT #

Anonymous says:

yep

Parent Post

Anonymous Sun Mar 15 00:39:36 2009 CDT #

Comrade Bear (tj and the bear) says:

Chaos is starting to sound like Allen. Hopefully this outbreak of irrational optimism can be "contained". ;)

Comrade Bear (tj and the bear) Sun Mar 15 00:13:16 2009 CDT #

Comrade De Chaos says:

Also, I am not calling this rally anything but a sucker rally. However the decline that might follow will be also a sucker decline, because at the moment it will be driven by fears and not rationality. (as much as rally is driven by greed and not necessary rationality, because there is nothing rational in buying a bank equity with unknown toxic exposure, near future profits, etc).\t

Comrade De Chaos Sun Mar 15 00:14:09 2009 CDT #

Threads Must Die (aka bobn) says:

never heard of this guy before- hes got a lot to say. im still digesting it
Martin Armstrong

Well, aside from the fact that he's in jail re: the Cassandra Does Tokyo post above - part way through the linked paper he starts discussing waves. One of them has a periodicity of 51.6 years. Sorry folks, but economic forecasting and timeframes specific to 3 significant digits screams "QUACKERY resides here!"

Also, check out those graphics! LOL!

Threads Must Die (aka bobn) Sun Mar 15 00:24:05 2009 CDT #

cd says:

chaos,
I get where your going with the animal spirits..but I would say the example of someone braking bcse of accident is really just stupidity rearing its ugly head..I see animal spirits driving down fell st to downtown SF every day and instinct has nothing to do with it...its called sh$t for driving skills and not paying attention..

instincts were papered over by dollar bills in this bubble...now with the easily borrowed dollar gone...instinct will be to stay away from debt...7 years after the GD1 people thought similar...winning a war unclogs that thinking....lets hope we dont have one of those....

cd Sun Mar 15 00:24:14 2009 CDT #

Threads Must Die (aka bobn) says:

However the decline that might follow will be also a sucker decline, because at the moment it will be driven by fears and not rationality.

Excuse me, but what is irrational about fear right now? Unless it's because it's understated and we should really be terrified?

Threads Must Die (aka bobn) Sun Mar 15 00:27:32 2009 CDT #

Anonymous says:

"QUACKERY resides here!"
The pompous sounding "Princeton Economics International" is a tell tale sign

Anonymous Sun Mar 15 00:50:33 2009 CDT #

Anonymous says:

good night all.

Anonymous Sun Mar 15 00:51:59 2009 CDT #

Paradigm Lost says:

Re & Threads: Your comments made me think of...

The Law of Accelerating Returns
by Ray Kurzweil

An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense "intuitive linear" view. So we won't experience 100 years of progress in the 21st century -- it will be more like 20,000 years of progress (at today's rate). The "returns," such as chip speed and cost-effectiveness, also increase exponentially. There's even exponential growth in the rate of exponential growth. Within a few decades, machine intelligence will surpass human intelligence, leading to The Singularity -- technological change so rapid and profound it represents a rupture in the fabric of human history. The implications include the merger of biological and nonbiological intelligence, immortal software-based humans, and ultra-high levels of intelligence that expand outward in the universe at the speed of light.

Paradigm Lost Sun Mar 15 00:55:23 2009 CDT #

otishertz says:

"The implications include the merger of biological and nonbiological intelligence, immortal software-based humans, and ultra-high levels of intelligence that expand outward in the universe at the speed of light."

or maybe we get too smart for our own good and become completely ineffectual bumbling idiot savants caught up in countless iterations unable to reach new decisions. by then we will have also solved the problem of scarcity so all our resource and physical needs will be covered, allowing us to fart around on the internet of the future all day, having faux freindster relationships and sex with robots.

Parent Post

otishertz Sun Mar 15 11:16:18 2009 CDT #

foolonthehill says:

Its all about China. Every since Nixon/Kissinger went there. When Bush (NOT Clinton) signed off on letting China into WTO he gave away the store.
The world economy is an only a slowly expanding almost zero sum system. In 2000 only a few stupid people knew that to make room for China everybody else would get squeezed.
Well now we all kind of know it.
The only answer I am afraid to say is for the rest of us push China back out the door and revoke MFN status. Then re-negotiate on our terms. And if we have to refuse to redeem their Treasury holdings. That is unless you want to live on China-level wages.

foolonthehill Sun Mar 15 00:56:52 2009 CDT #

CRbot says:

The Latest from Yves:

On Traders Behaving Badly and Cognitive Bias

CRbot Sun Mar 15 01:01:45 2009 CDT #

unhappyCakeEater says:

thanks anon. get a handle.

unhappyCakeEater Sun Mar 15 01:03:47 2009 CDT #

Comrade De Chaos says:

"An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense "intuitive linear" view."

Same goes for the stock market. However since the object is complex, it follows the behavior of all of the complex systems - an exponential growth could be periodically interrupted by exponential decline until the story is reversed and than repeated.

Comrade De Chaos Sun Mar 15 01:05:26 2009 CDT #

dr strangemoney says:

"An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense "intuitive linear" view."

Same goes for the stock market. However since the object is complex, it follows the behavior of all of the complex systems - an exponential growth could be periodically interrupted by exponential decline until the story is reversed and than repeated.

Didn't Mr. Singularity, Kurzweil, launch some pattern matching hedge fund right at the top of the market? Anybody know how that turned out? Some important mathematical texts were lost when the Christians washed them out to re-use the paper for religious writings.

Parent Post

dr strangemoney Sun Mar 15 01:58:56 2009 CDT #

Anonymous says:

that guy's message is getting really, really old.

Anonymous Sun Mar 15 01:05:38 2009 CDT #

unhappyCakeEater says:

those graphics were my favorite part!
bet hes been on George Noori once or twice...

unhappyCakeEater Sun Mar 15 01:07:24 2009 CDT #

KR says:

The crash is gaining mass momentum. The overall perception of the rate of change slowing due to some indicators is meaningless in the greater context. When the train derails, the tumbling of the rail cars while slowing is causing damage at an increasing rate.

KR Sun Mar 15 01:15:25 2009 CDT #

CRbot says:

The Latest from Mish:

G-20 Summit - a Complete Waste of Money

CRbot Sun Mar 15 01:18:56 2009 CDT #

unirealist says:

I'm not a Marxist, but history strngly suggests that Capitalism is its own worst enemy, bent on destroying itself as rapidly and efficiently as it can. It acts much like a contagious and lethal virus, and each successive wave of its contagion is more catastrophic for the host population - i.e us.

The last wave of contagion led to the Great Depression, and I think this one we're experiencing now will be a magnitude worst. It won't put a permanent end to Capitalism, I suppose, but the collective response among the global survivors may bring to a virtual dead stop the precipitous scientific and technological progress we take so for granted.

I think that at least the governments of at least a half-dozen countries will implode this year, and in the ugly aftermath of the secondary impacts, many other counties will ultimately convert to alternate forms of government, such as fascism and theocracy.

Unless global finance is granted a summary pardon by a divine entity, Capitalism is about to give us the most graphic demonstration yet of how savagely it can ravage its host body.

unirealist Sun Mar 15 01:26:30 2009 CDT #

mock turtle says:

i agree and posted something similar on another thread

more than one or two regimes and their political - economic systems will end because of this financial crisis

and we should not kid ourselves,,, while unlikely (UNLIKELY) it could be US

Parent Post

mock turtle Sun Mar 15 02:20:26 2009 CDT #

Paradigm Lost says:

Comrade de Chaos: Yep. Catastrophe brought to you by electronic trading, ether money and traders with the ethics of piranhna. Why did we think it would be otherwise?

Time to turn in.

Paradigm Lost Sun Mar 15 01:30:48 2009 CDT #

KR says:

Okay, i'm board. Can we discuss what things will be worth in say 2 years, or pick 3 years. i say butter will double.

KR Sun Mar 15 01:30:59 2009 CDT #

mock turtle says:

when things get crazy, it gets more and more difficult if not impossible to make predictions

the difference between predicting the current in a river as it flows past one big rock verses predicting the current passing thru a maze of rocks strewn across the entire channel

Parent Post

mock turtle Sun Mar 15 02:31:38 2009 CDT #

Guest says:

It's possible that we're near a bottom for the stock market but no for the economy (read: employment) if stock prices are simply way underpriced. Roubini doesn't seem to argue against undervaluation, instead arguing against optimistic readings of fundamentals, which I would agree with him about, but as we know the stock market doesn't always reflect the fundamentals :-).

Guest Sun Mar 15 01:33:53 2009 CDT #

KR says:

I'm bored #2, it just occurred, in three years i can see gold at 10,000 and a global economy in a currency war.

KR Sun Mar 15 01:35:41 2009 CDT #

Uncle Billy, Mental Widget says:

His original post was 6,400 words long -- over 9 pages of dense text. With a reference to Groundhog day?? C'mon, who really writes these things.

Uncle Billy, Mental Widget Sun Mar 15 01:48:16 2009 CDT #

rhhardin says:

Neither side of the second derivative argument has a clue about mathematics.

rhhardin Sun Mar 15 02:10:58 2009 CDT #

mock turtle says:

probably true, and, they are not using the term in a mathematical sense...i guess they just mean...from which it is derived

Parent Post

mock turtle Sun Mar 15 02:33:51 2009 CDT #

KR says:

rhhardin says:
Today, 3:10:58 AM
“Neither side of the second derivative argument has a clue about mathematics.

Explain your theory.

KR Sun Mar 15 02:15:15 2009 CDT #

KR says:

My bets: China is falling off a cliff and falsifying data. US U-3 data is off by 2 to 3 points on real unemployment because of the 31 million food stamps number. The truth will out. Betting #2, that oil will see $29 in 3 months because fundamentals are showing economy crashing, demand plummeting. Time will bring it on. There is no sooner or later, the crash will run its course. Its three to five years, pick one. I'm a pessimist, so i pick five.

KR Sun Mar 15 02:25:10 2009 CDT #

Tao Jonesing says:

CR,

RGE Monitor is quite pricey ($10K/year). Did you get a free subscription, or do you need some donations?

Thanks for sharing.

Tao Jonesing Sun Mar 15 02:25:34 2009 CDT #

Uncle Billy, Mental Widget says:

Tao: It's been free for a long time dude. Just sign up and the world is your oyster of doom.

Parent Post

Uncle Billy, Mental Widget Sun Mar 15 02:32:08 2009 CDT #

Tao Jonesing says:

As an aside, I'm "long" until Dow 7300, then I sell off my gains and start shorting again. I'm only in SSO right now (ProShares Ultra S&P500), and at a fifth of what I was gambling when short.

The one thing I find funny in all of this is that Roubini seems to think that we don't get that this is a suckers' rally. I've already sent an e-mail to my guys at Credit Suisse about the fact that Geithner is about to start talking again, so we may pull out before Dow 7300. If past is prologue, Geithner talking means "financial iceberg."

Tao Jonesing Sun Mar 15 02:32:56 2009 CDT #

KR says:

BTW, a 36 month recession is not a recession.

KR Sun Mar 15 02:34:29 2009 CDT #

KR says:

And, now that Roubini has quantified that we are in a depression, (thank you), the next question is how hard is the landing. The answer is, social change.

KR Sun Mar 15 02:40:57 2009 CDT #

JOE SICKS PACK says:

"A while from now majority will realize that 85+% of us still have jobs"

:-P

really? the 130 mil or so on the non-farm payroll are 85% or so of the folks who want full-time work? :-E

JOE SICKS PACK Sun Mar 15 02:45:48 2009 CDT #

mock turtle says:

hmmm the us population is a little over 300 million

the work force is 150 million
http://data.bls.gov/cgi-bin/surveymost?ln

nearly 13 million are U3 and who knows how many more bring the number up to U4

13 divided by 150 is around 8.6 percent

my guess is that the real unemployment numbers are far higher than the official 8.5% figures suggest

Parent Post

mock turtle Sun Mar 15 03:18:43 2009 CDT #

KR says:

and, political currency inflates in times of need, its a given. Obama, the Chicago bred politician does not look like a man easily knocked of his horse. On the contrary, he looks like a man who can ride a horse. In this case riding a bucking bronco is the requirement of the day. The weapons of mass destruction this time round, are home made. Can Obama save America? That is the question. The answer is no. The next question arising is, so now what?

KR Sun Mar 15 02:48:03 2009 CDT #

Anonymous says:

Is Roubini really using derivatives to explain the course of policy choice?

"Policies are indeed moving in the right direction – the first derivative is positive – but their second derivative is still negative as these actions are reactive rather than proactive to a worsening of the economic and financial outlook."

Translation: Policy is heading in the right direction, but its rate of ascent to those right decisions is declining.

Anonymous Sun Mar 15 02:50:09 2009 CDT #

mock turtle says:

KR
i take it back, maybe roubini is using the term "derivative" in a mathematical sense

"While the first derivative of economic activity is still negative the second derivative is becoming positive around the world: i.e. output, employment, demand etc. are still contracting but they are – or will soon be - contracting at a slower rate than in Q4 of 2008. As long as the second derivative is positive rather than negative economic activity will bottom out some time in H2 of 2009 and the recession will be over sooner rather than later."

so he's saying that the slope of the change is negative, but the rate of change of the slope towards the negative, is decreasing...ie the second order derivative of the plummeting economy is neutral or positive...ok could be

im not well versed in calculus

mock turtle Sun Mar 15 02:55:01 2009 CDT #

KR says:

Each month, in today's picture, America is shedding a number of jobs equal to the entire number of police officers employed by the entire country. (source CNN). Its a staggering number. This is how i finally understood the word deflation, how it sunk in.

KR Sun Mar 15 02:57:40 2009 CDT #

KR says:

Observation #3, The Fall of Wall Street is in the cards. Then what? Shanghai? Is it even possible? I'm betting it's obvious.

KR Sun Mar 15 03:03:45 2009 CDT #

KR says:

Observation #4. Mexico is a bigger problem than we think. The moral rule book is about to be re-written, as to how North America deals with its starving poor. There is going to be a flood of Mexicans into upper North America, a wave. We, up here, cannot stop this event from occurring. Social change.

KR Sun Mar 15 03:08:39 2009 CDT #

CRbot says:

The Latest from Yves:

Links 3/15/09

CRbot Sun Mar 15 03:10:26 2009 CDT #

KR says:

and, if the US legalized Maryjane, it would bankrupt British Columbia.

KR Sun Mar 15 03:13:47 2009 CDT #

toobigtofail says:

test

toobigtofail Sun Mar 15 03:29:39 2009 CDT #

KR says:

hmmm the us population is a little over 300 million

the work force is 150 million

nearly 13 million are U3 and who knows how many more bring the number up to U4

I'm with ya on that. 31 million on food stamps is more tell-tale. When i was killing salmon with deadly accuracy on the west coast i always used greibs, two little herring fisher birds, to mark my location and depth. This number of food stamps is a tell tale of real data, the catch in the story.

KR Sun Mar 15 03:39:45 2009 CDT #

Anonymous says:

'31 million on food stamps is more tell-tale.'

Mainly that Wal-mart's hiring remains robust in communities across America, right?

It's all good - low, low prices involving low, low wages, and the taxpayer footing the difference as they save, save, save.

Parent Post

Anonymous Sun Mar 15 04:37:19 2009 CDT #

That Barton Fink Feeling says:

"I'm having a little bit of trouble understanding why my tax dollars are going to be sent to AIG executives."

And they're having a little trouble holding back the laughter.

As President Money Honey is fond of saying, "We don't disparage wealth."

Nope -- it's bonuses for the creme de la crooks, and arbeit macht frei for the slobs.

That Barton Fink Feeling Sun Mar 15 03:41:24 2009 CDT #

Cornholio says:

The CEO of American International Group Inc is expected to testify on Wednesday at a U.S. congressional hearing on the bailout of the troubled insurer, two congressional aides said on Saturday.
http://www.reuters.com/article/newsOne/idUSN1448418420090315

Oh-Boy another symbolic tongue lashing for the peeps. =-X

Cornholio Sun Mar 15 03:42:07 2009 CDT #

RhodesianGreenbackinAZ says:

The Sopranos
“Bust-out”
Episode #23

Tony: What are you doing here?

Davey: I could ask you the same fucking question. It's my store.

Tony: Congratulations, it's a fucking disaster.

Davey: Hey, some of those airline tickets came in. You and me split them with you and richie.

Tony: They're mine, it's my idea.

Tony: That's where you sleep?

Davey: Yeah, sometimes. It's easier than going home.

Tony: I know what you mean.

Davey: I remember when you transferred into 10th grade from... Boden Boden. Fucking army brat. Hey, you remember when those guidos from patterson, they caught you up at garret mountain, they had you barricaded in your old man's car and I whipped that rock and hit that guy in the eye?

Tony: Don't reminisce on me.

Davey: You told me not to get in the game. Why'd you let me do it?

Tony: Well, I knew you had this business here, davey. It's my nature. The frog and the scorpion, you know? Besides, if you would've won I'd be the one crying the blues, right?

Davey: What's the end?

Tony: The end... It's planned bankruptcy. (Davey Sobbing)

Tony: hey, you're not the first guy to get busted out. This is how a guy like me makes his living. This is my bread and butter. When this is over you're free to go. You can go anywhere you want. Oh, for chrissake.

RhodesianGreenbackinAZ Sun Mar 15 03:58:00 2009 CDT #

Anonymous says:

More from the Horne's side of the street -
'Revolutions create a curious inversion of perception. In ordinary times, people who do no more than describe the world around them are seen as pragmatists, while those who imagine fabulous alternative futures are viewed as radicals. The last couple of decades haven’t been ordinary, however. Inside the papers, the pragmatists were the ones simply looking out the window and noticing that the real world was increasingly resembling the unthinkable scenario. These people were treated as if they were barking mad. Meanwhile the people spinning visions of popular walled gardens and enthusiastic micropayment adoption, visions unsupported by reality, were regarded not as charlatans but saviors.

When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.'
http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/

Now, just replace the world 'newspaper' with a three letter abbreviation often combined with 'Nr 1,' and you have a nice summary of the last couple of decades.

On another note, you could also substitute 'boomer outlook of the future,' but that is more a prediction than an observation, and thus less incisively useful.

Anonymous Sun Mar 15 04:55:22 2009 CDT #

Anonymous says:

regarding AIG executives'bonus, a suggestion to get clawbacks :
- deprive them of their US citizenship and declare them enemy combatants (or, more subtly, pretend to organize a special reward trip for "top talents" to first class beach resort in eastern Cuba)
- get their access codes to their bank accounts in Switzerland and Bahamas (some waterboarding might be involved)
- enjoy the money (but the US taxpayer is still on the hook for a few hundred billions of dollars)

Anonymous Sun Mar 15 05:19:26 2009 CDT #

Counterpointer says:

Mish nails it. WOFTAM.

C

Counterpointer Sun Mar 15 05:31:04 2009 CDT #

Anonymous says:

Really quiet, which is a shame, especially in light of the thoughts at the link - http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/ -
'And so it is today. When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution. They are demanding to be told that old systems won’t break before new systems are in place. They are demanding to be told that ancient social bargains aren’t in peril, that core institutions will be spared, that new methods of spreading information will improve previous practice rather than upending it. They are demanding to be lied to.

There are fewer and fewer people who can convincingly tell such a lie.'

Pretty much sums up a lot of what is discussed here, to be honest, though some of the posters here aren't yet quite aware that they aren't going to be spared the revolution either - regardless of their own proclamations to insight, foresight, or even, more humorously, hindsight.

Anonymous Sun Mar 15 05:34:19 2009 CDT #

traderwalt says:

Certainly the price of oil will figure prominently in our economic outlook. There's an OPEC meeting today and the Saudis are facing, once again, the prospect of other cartel members not adhering to their production quotas. Here's the Financial Times take on the situation:

http://blogs.ft.com/energy-source/2009/03/14/saudi-arabia-reins-in-the-opec-laggards/

traderwalt Sun Mar 15 05:59:59 2009 CDT #

Dead Stray Cat Bounce says:

Does Roubini realize that the Titanic only needed to hit one iceberg before it sank? Hitting another one seems unnecessary. We're already sinking folks...

Dead Stray Cat Bounce Sun Mar 15 06:13:57 2009 CDT #

traderwalt says:

Domestic oil and gas production will rise this year, but exploration and development probably won't. From the New York Times:

http://www.nytimes.com/2009/03/15/business/15drilling.html?ref=business

traderwalt Sun Mar 15 06:16:34 2009 CDT #

Counterpointer says:

Anony - of course it's quiet, excepting the insomniacs and EST early risers.

Anyhow there's a good clip with Rogoff on Option Armageddon, albeit more steady state decline than credit event:

http://optionarmageddon.ml-implode.com/2009/03/14/rogoff-interview-our-prospects-very-frightening/

C

Counterpointer Sun Mar 15 06:26:26 2009 CDT #

Comrade Byzantine_Ruins says:

Anonymous says:
Now, just replace the world 'newspaper' with a three letter abbreviation often combined with 'Nr 1,' and you have a nice summary of the last couple of decades.

"You have come too late, my work has already met... with success."

Comrade Byzantine_Ruins Sun Mar 15 06:31:20 2009 CDT #

Comrade Byzantine_Ruins says:

In a world where the US sovereign credit market wasn't going to implode, we'd see first a credit panic, then a long grinding downturn, assuming you imposed a Japanese solution and didn't allow the debt burden to get consumed in successive bankruptcies.

Unfortunately, the US sov debt market imploding is going to make things a little less formulaic than that.

Comrade Byzantine_Ruins Sun Mar 15 06:38:55 2009 CDT #

Counterpointer says:

I just find the concept of US sov debt CDSs blowing out quite mind-blowing. Ok, Ireland and Greece I can accommodate. But the US?

Wow. Just wow.

http://www.youtube.com/watch?v=itXbYH8X5Y0

C

Parent Post

Counterpointer Sun Mar 15 06:47:21 2009 CDT #

joe shmoe says:

The AIG bonus scandal gets bigger, and worse. Money is apparently already gone, again:

http://www.nytimes.com/2009/03/15/business/15AIG.html?hp

A.I.G. Planning Huge Bonuses After $170 Billion Bailout

By EDMUND L. ANDREWS and PETER BAKER

The insurer planned to pay about $165 million in bonuses by Sunday, though some payments were reduced after Treasury Secretary Timothy F. Geithner intervened

joe shmoe Sun Mar 15 07:20:07 2009 CDT #

Mr. Randy Middleclass says:

There's a good article in this month's Harper's by Thomas Geoghegan re how unlimited interest rates destroyed the economy.

Mr. Randy Middleclass Sun Mar 15 08:01:09 2009 CDT #

Counterpointer says:

That AIG story stinks to high heaven. Blecch.

C

Counterpointer Sun Mar 15 08:18:54 2009 CDT #

blonderengel says:

El Comandante Primo, part I

This isn’t for sensitive ears or any ears still attached to a breathing, blinking, speaking head. This is best for virginal ears. Ears created in laboratories, attached to the backs of mice—we let mice now do most of the heavy lifting; they have an affinity for it and a lack of unionization that makes this sort of arrangement nearly perfect if one were to speak in edenic terms, which I understand, is difficult, considering the near universal ban on Eden.

I say it if I must: No to Eden, no to Eve, no to apples (even apple sauce), any apple by-products, apple-producing countries (I’m sure there are some), and finally, consequentially, the shape round, the colors red and green which are clearly dominant apple colors. The ban is not complete but it’s a start.

blonderengel Sun Mar 15 08:19:02 2009 CDT #

Pavel says:

"Meaning we make something so terrible it kills us all, or that we make our successors? Or both?"

Yes.

Pavel Sun Mar 15 08:19:26 2009 CDT #

blonderengel says:

El Comandante Primo, part II

We will have to go after apple cheeks and will find new versions of beauty—don’t forget the contest for the revolutionary guards will be held next Wednesday; we still don’t have a stage and a sound mixer. Not everything can wait until the last minute. At the entrance you will find the 600 page instructions on how to structure an apple and form free beauty show.

Just as long as you don’t actually use people you should be o.k. Dogs? Not o.k. either. They fall squarely within in the round. Perhaps a gray piece of working glass paper should be entered from our commune. We have been creative in years prior. Gray is such a complex color, such a democratic color, perfectly representative of…the long march…the emergence from snow, sludge, to find the sky finally empty of everything but gray but that available in any color you wanted as long as it was gray: whitesmoke, gainsboro, lightslategray, slategray, darkslategray.

Something worked in gray that didn’t work in any other color of the spectrum: ideas and impulse. Silver even contemplates to desert from precious metals to make the trip across to gray. I encourage such foolishness, such deviation from the norm. In gray we trust, in gray we truest. Because all else is foolishness, fiddle-dee-dee, Ms. Scarlett, and just not proper. And o my!

My gallant Hero dressed in gray I will hound him for the rest of his living years and beyond for having lost this war. It is not acceptable to lose, certainly not a war, most certainly not a war of this scale, a clash of civilizations, if you are given to hyperbole, which I trust you are, else you wouldn’t be here. Tell me, my friend, how do we extricate ourselves from this fly trap, this place of high drinks and low music, soft women and sweaty sleepless nights and cotton so dry you’ll the harvest will fail.

The invitation to the island still stands. You are already packed. The plane can be here in ½ hour, fueled, ready. Are you? Are you ready to pull your toe from the brown backwaters, the occasional rattlesnake, water turtle or horsefly and hornet. They built their nests close to your houses as if to commit you to something, a long term tenancy agreement. Defaulted into it on my part and assumed from then on--

blonderengel Sun Mar 15 08:19:36 2009 CDT #

Pavel says:

"You have come too late, my work has already met... with success."

Quote from - ?

Pavel Sun Mar 15 08:20:49 2009 CDT #

Pavel says:

"...which I understand, is difficult, considering the near universal ban on Eden. "

THE CITY OF LIGHT

Death is a felony, crime and secession
From royal tranquility, kingdom of heaven,
A leap from the tower, across the frontier
The fugitives hurry, their power their fear,
Rebellion half-tamed and half-savage, let run
It shatters the world, the rebellion begun,
Assault on His love despairing and wild
Assault on His innocence, eyes of a child,
Outlaws at large in the desert of night,
Stars in the distance the city of light

\t\t\t\t\tPavel
\t\t\t\t\tMarch 10, 2009

Pavel Sun Mar 15 08:23:44 2009 CDT #

joe shmoe says:

Pavel asks:

“"You have come too late, my work has already met... with success."

Quote from - ?

I'm tempted to say Dick Cheney.

joe shmoe Sun Mar 15 08:24:07 2009 CDT #

Cornholio says:

Obama open to taxing some health benefits
http://www.iht.com/articles/2009/03/15/america/health.php =-X
The Borg - you will be ASSimilated

Cornholio Sun Mar 15 08:27:33 2009 CDT #

Counterpointer says:

Erm, blonderengel, this is the CR board, not afterthecrash...!

C

Counterpointer Sun Mar 15 08:28:32 2009 CDT #

REBear says:

AIG bailout and Timmay

>>
Timmay will tell us that those in the product division at AIG are helping taxpayers get a better deal, or something stupid like that.

REBear Sun Mar 15 08:34:22 2009 CDT #

Guest says:

Rogoff link above says inflation is the end game. Is that why the US Mint is restricting actual gold and silver? How can the spot price reflect reality? It is hard to believe in the PTB when thye have such a recent poor record.
http://mortgagedfuture.com/where-is-all-the-physical-gold-and-why-does-us-restrict-gold-purchases/

Guest Sun Mar 15 08:34:33 2009 CDT #

Guest says:

madoff morgan connection
http://www.portfolio.com/business-news/portfolio/2009/03/13/JP-Morgan-Chases-Ties-to-Madoff

Guest Sun Mar 15 08:47:14 2009 CDT #

Joanna says:

Been on a CR/obsessive-news-reading break for a while. Still the same variable speed train wreck, complete with selective coverage going on.

My personal economy has a hint of hope in that I'm not on any 1st wave layoff list.

Time to bake some oatmeal cookies...

Joanna Sun Mar 15 08:48:57 2009 CDT #

Anonymous says:

A view from NYC: I know 12 people who have lost jobs in the past 3 months. As of Friday all but one has found a new job. These are all investment bankers/traders by the way and I know far too many of them..... Go figure. Regional banks and boutique firms are picking up the slack. No doubt that these jobs wont pay nearly as much as they were making, but they're jobs nonetheless.
Aside from that, everyone else I know is short the market - almost all were 100% long just 6 months ago.
The housing markets here are about 12-18 months behind the rest of the country so more much more pain to come there.
All things considered, the mood of people is pretty good - work hours are down so people are spending more time with family. Recently, restaurants have been crowded and reservations are hard to come by. It's not at 2007 leels, but its actually picked up quite a bit from January, December, November. I guess people have been making money on the short side.....its certainly been the momentum trade of 2009 until last week.

Anonymous Sun Mar 15 08:55:10 2009 CDT #

shelly says:

I'm in the CR/obsessive-news-reading mode. I don't know how to stop. Driving my family crazy.
Question: If the decline started in 2001 wouldn't it be interesting to see the 4 bears chart that reflects this bear starting in 2001?

shelly Sun Mar 15 08:55:45 2009 CDT #

howardhughes says:

AIG = Astounding Illegitimate Gumption/Greed.

howardhughes Sun Mar 15 08:56:09 2009 CDT #

shelly says:

I also have 8 friends in NYC that have lost jobs. Only the one in banking is rehired as of now. I do think the mood is NYC is picking up. I just think we can't stay depressed more than 8 weeks at a time.

shelly Sun Mar 15 08:59:14 2009 CDT #

Joe Six Pack says:

Ever watch those Time Life videos of WW II? I like the ones where the airplane gets shot down and a wing comes off. That second derivative floats around the sky, allowing the breeze to take it in random directions. Unfortunately, the pilot is sitting in the first derivative.

Joe Six Pack Sun Mar 15 09:03:18 2009 CDT #

Counterpointer says:

shelly -sorry, you're doomed to dooming. Get used to it. But do take care of your family. They're solid, this thing is evanescent.

C

Counterpointer Sun Mar 15 09:06:48 2009 CDT #

Joanna says:

Yeah, unless you're on the frontlines of this crap, you have to step back and deal with your personal economy. Use the big stuff as an indicator and guide to making bigger decisions, but in the end, you still have to buy groceries, go to work, interact with the family etc. And all that is still going on, no matter how doomy the intertubes feels.

Joanna Sun Mar 15 09:10:40 2009 CDT #

Threads Must Die (aka bobn) says:

I just think we can't stay depressed more than 8 weeks at a time.

shelly

I think the market can stay depressed lots longer than we can. Once you get its attention, its attention span can be long, even with the occasional distractions.

Threads Must Die (aka bobn) Sun Mar 15 09:10:48 2009 CDT #

REBear says:

AIG bonuses may be a 'bait and switch' -

Now the stupids in congress will forget about the 100s of billions of dollars in counter party bailout and concentrate all their wrath on 100 million in bonuses.

REBear Sun Mar 15 09:11:00 2009 CDT #

otishertz says:

will bank runs just look like out of service ATMs?

otishertz Sun Mar 15 09:14:43 2009 CDT #

Threads Must Die (aka bobn) says:

shelly says:

I'm in the CR/obsessive-news-reading mode. I don't know how to stop.

Tell me about it. In my case it gets worse with time. :'(

Threads Must Die (aka bobn) Sun Mar 15 09:15:39 2009 CDT #

otishertz says:

"may be a 'bait and switch"

otishertz Sun Mar 15 09:20:55 2009 CDT #

otishertz says:

ie: if you are attacking yourself you control the opposition.

otishertz Sun Mar 15 09:23:15 2009 CDT #

nova says:

A pretty good thread. The brains seem to come out at night.

nova Sun Mar 15 09:25:12 2009 CDT #

otishertz says:

i'll check it out

Parent Post

otishertz Sun Mar 15 09:33:01 2009 CDT #

otishertz says:

reverse astroturf

otishertz Sun Mar 15 09:26:26 2009 CDT #

Anonymous says:

Enough of the puff: U.S. tax may cut smoking rates

Daniel Smith, president of the American Cancer Society's Cancer Action Network, said the next important step is for Congress to give the U.S. Food and Drug Administration power to regulate tobacco products. The FDA already oversees drugs, medical devices, most foods, cosmetics and animal drugs.

A House of Representatives panel approved the long-stalled measure on March 4. It still needs passage by the full House and Senate. "This is the year to make it happen," Smith said.
http://www.reuters.com/article/governmentFilingsNews/idUSN1340031920090315?pageNumber=2&virtualBrandChannel=10112

One down alkies your next 8-)

Anonymous Sun Mar 15 09:27:09 2009 CDT #

Anonymous says:

Can't hardly wait for them to go after the fatties =-X

Parent Post

Anonymous Sun Mar 15 09:33:10 2009 CDT #

otishertz says:

vengeful god, was that you?

otishertz Sun Mar 15 09:29:32 2009 CDT #

Anonymous says:

Corrected links
New Post by London Banker -
text posted at NakedCap (comment 12) or can be viewed at RGEMonitor with registration.

"I wrote the following 15 months ago. It looks like this dead cat bounce is yet another set up, but I suspect the next listing of this wreck will flood steerage. The last lifeboats, well stocked with comforts for the few passengers invited, are quietly loosing themselves and rowing for safety."

Anonymous Sun Mar 15 09:30:34 2009 CDT #

Threads Must Die (aka bobn) says:

calmo says:

The recession is 15 mo old, Threads, but the analysis is like a chance to let everybody know you took Math 12

I meant that the change in 2nd derivative had only been happening for a month or 2. And I'll admit my typing sux. As if that weren't oblivious. ;)

Threads Must Die (aka bobn) Sun Mar 15 09:32:10 2009 CDT #

joe shmoe says:

RE Bear

I don't think this is bait and switch. I think it is crash and burn - for AIG, maybe for Geithner, and maybe for Obama if he isn't running this show to turn the heat on AIG et al.

Yesterday AP reported that AIG said it would reveal the list of its counterparties . . . no explanation of why they would do that, all of the sudden. So the coincidence of that announcement coming out hours after the WaPo first posted its story on the bonuses looks like more than a coincidence to me.

Since Bernanke and Geithner refused Senators calls that they divulge the names of the counterparties, I have to wonder if AIG is playing live hand grenade handoff with Geithner.

Friends don't toss friends live grenades with the pin pulled. I think all these folks are overplaying their cards and the game of bluff is about to be called by all parties: AIG, the Amdinistration, and the public. If any Repub wants an issue to catapult them forward as the leading critic of the Obama Administration, this is it, unless Obama gets out ahead of them.

So that puts the question of the counterparties in play again, and the whole bonus story puts the prupose of the $180 Billion bailout into question again . . . And, most of all, it should highlight the question (d'uh?) of whether it was wise to bail-out AIG rather than have it go through a back-stopped bankruptcy (in which govt takes ownership, guarantees CDS as necessary, but wipes out management and solve the bonus/contract question once and for all.

joe shmoe Sun Mar 15 09:33:49 2009 CDT #

Black Star Ranch says:

"The FDA already oversees drugs, medical devices, most foods, cosmetics and animal drugs."

....and the FDA does such a "fine" job with their other activities & responsibilities. Promise me you guys you will pass a federal law allowing Obama to serve indefinitely.

Black Star Ranch Sun Mar 15 09:35:18 2009 CDT #

Comrade Kristina says:

Cigs here in Florida just went up over 6 bucks a carton and are going to rise again next month...I want to see a 6 dollar "sin" tax on Big Macs now...

Comrade Kristina Sun Mar 15 09:37:30 2009 CDT #

otishertz says:

how about a 60 billion sin tax on corporations that sell fake meat that pops your liver.

otishertz Sun Mar 15 09:40:40 2009 CDT #

Thoreau says:

Why should Madoff be incarcerated and the nationally renowned tax shelter crusader Mike Hamersley, of the California Franchise Tax Board, remain free? Madoff merely engaged in a time tested simple transparent scam and unlike the current Treasury Secretary, Geithner and Mike Hamersley apparently did not cheat on his taxes. Hamersely continues to purvey a scam so diabolical and a scam which has destroyed so many families’ lives that he is allowed to hold a high level job in the Government confiscating earnings from honest citizens who unlike Mike Hamersley did not lie to the Senate or the IRS about taxes. Hamersely told the Senate tax fraud was hiding the true facts from the IRS and engaging in paper transactions. Emails show Hamersley purveyed tax shelters for KPMG which resulted in tens of millions of tax fraud based on Hamersely’s definition of tax fraud to the Senate which hit the trifecta, sham paper losses, lying to the IRS, use of sham foreign companies and back dating (according to Hamersley’s definition of backdating). Why shouldn’t Bernie be free if the government not only allows Hamersely to be free but continue his charade on behalf of the Government?
Why should Bernie Madoff be in the pen while KPMG remains a going concern and not indicted for its part in the greatest ponzi scheme in history which has resulted in a $50 Trillion destruction of world wealth? KPMG audits many of financial institutions which were the purveyors of this ponzi scheme. KPMG received 100s of millions in fees from these institutions to sign off on the fraudulent financials (check out Citi’s level three assets and the 100s of billions of exposure it has to bad debts or Citi’s $32 Trillion of derivative ticking time bombs). Madoff is nothing compared to KPMG and at least apparently Madoff paid his taxes. KPMG engages in massive tax fraud with its fraudulent foreign Bermuda captive sham foreign insurance company, Park, where not only does KPMG cheat on its own taxes but cheats its partners through contrived reinsurance arrangements devised by the good KPMG soldier, Claudia Taft. Why does everyone hate Madoff but not KPMG, Madoff’s crimes are simple and a drop in the bucket compared to the malfeasance purveyed by KPMG.

Thoreau Sun Mar 15 09:42:21 2009 CDT #

Black Star Ranch says:

"I want to see a ..."sin" tax on Big Macs"

Can you imagine getting arrested for selling an illegal char-broiled bacon-burger with french fries? The high crimes of the new century - just watch for our incarceration rates in 2015 - you think jailbird pot-heads is a bad bust - try the new and improved "Hamburgler"!

Black Star Ranch Sun Mar 15 09:44:52 2009 CDT #

nova says:

6 bucks? How much are they in Georgia?

nova Sun Mar 15 09:45:40 2009 CDT #

I Heart CRbot says:

hehe

I Heart CRbot Sun Mar 15 09:45:43 2009 CDT #

otishertz says:

i can't wait for them to go after pussies

otishertz Sun Mar 15 09:45:52 2009 CDT #

Comrade Kristina says:

A poster earlier in the thread said they've been thinking about the Titanic alot lately. I think what we are witnessing is more akin to the Edmund Fitzgerald. It rode a huge crest then nose dived to the bottom of Lake Superior, never to be seen again...

Comrade Kristina Sun Mar 15 09:46:18 2009 CDT #

Jas says:

--
On Deflationary Depression

Deflation is already here because of the falling "aggregate demand," driven by falling household debt, led by drop in mortgage debt, etc. The whole consumption cycle was driven by huge growth in household debt that now is contracting.

Drop in consumption leads to drop in other activities, including capital spending. The vicious cycle sets in and the govt policies are always reactionary and cannot avoid the ultimate outcome. What after the stimulus? More stimulus? And what after that? Fatigue. Depression always wins the battle against policymakers advised by rogue economists like Krugman.

All economic theories are only good until they are proven bad and that would the fate of Keynesians. Monetarists are even worse. Austrians have some merit; they understood debt, or credit.

Jas

Jas Sun Mar 15 09:46:36 2009 CDT #

Threads Must Die (aka bobn) says:

Anonymous says:

Can't hardly wait for them to go after the fatties =-X

I'd welcome all the reasonable motivation I could get.

Threads Must Die (aka bobn) Sun Mar 15 09:46:50 2009 CDT #

Black Star Ranch says:

Thoreau......
Sounds like your beef with KPMG is personal. Anyone who defends the IRS is a moron.

Black Star Ranch Sun Mar 15 09:49:45 2009 CDT #

Guest says:

All economic theories are only good until they are proven bad and that would the fate of Keynesians. Monetarists are even worse. Austrians have some merit; they understood debt, or credit.
Jas

Jasbot! Only YOU know the world's correct economic model. You are so dreamy :*

Guest Sun Mar 15 09:57:14 2009 CDT #

Jas says:

--
No, sir. I only observe and history is the only observation post. Failures of the various theories are well known but propagandists are there to defend just like religious zealots. Economics has lot in common with religion!

Jas

Parent Post

Jas Sun Mar 15 10:04:52 2009 CDT #

nova says:

Fried says:Today, 10:50:57 AM

Please feel free not to include me. I am rather shallow. Except when I am at sea.

nova Sun Mar 15 09:58:14 2009 CDT #

fried says:

nova,
you are always in my thoughts, to include you in print would be redundant.

Parent Post

fried Sun Mar 15 12:00:55 2009 CDT #

REBear says:

joe shmoe,
I see the AP story as a short term diversion. AIG may be ready to divulge names but the treasury which controls 80% of AIG may not want to do it.

If AIG management tries to get smart, Timmay will hand them the pink slip and maybe even place an anonymous call to the FBI.

All the reason why i feel AIG bonus is a bait and switch to pull the topic of couterparty beneficiaries off the table.

Although, i hope you are right.

REBear Sun Mar 15 10:07:10 2009 CDT #

Nawar says:

Is Roubini an economist or a market timer?, I don’t know if he will be right or wrong on this call, but predicting short term market action got nothing to do with deep and well thought economic analysis, like a prior poster said “Roubini will be right until he is wrong”.

Regards,
Nawar

Nawar Sun Mar 15 10:29:52 2009 CDT #

Jas says:

--
Any economist invited to Davos is in propaganda business. The whole meeting is for the economic ruling elite and their agents. Things, in reality, are lot simpler than most people can think.

Jas

Parent Post

Jas Sun Mar 15 10:41:27 2009 CDT #

Alan Rohrbach says:

While there are always reasons to look for the 'silver lining', this one would seem to leave Roubini more likely right than not in the sense of the late great Geo Carlin's observation on that.

If anyone doubts the economy can remain weak fully into the end of this year, reference the latest from what has been the highly prescient OECD Composite Leading Indicators http://bit.ly/pYTRJ. Sad but true that the indicators which called the top in mid 2007 & maintained their bearish view through all of 2008 (including the hopeful Spring) is going from bad to worse than seen in decades at this time. :'(

Alan Rohrbach Sun Mar 15 11:32:56 2009 CDT #

Ponies for Show says:

I was going to upbraid CR for being too optimistic, but after going back and re-reading his words it seems he is "open to optimism" rather than "cautiously optimistic" - darn you are smart, CR.

For the sake of argument I will be a bit pessimistic. The TemporalOrder model which CR points to says that "housing usually leads the economy out of recessions too". Residential Investment and PCE are the first types of spending that swing up. This recession is different however, in that it is hard to see how it is that residential construction will swing up with all of the excess housing supply to be worked off and residential housing prices continuing to fall. Furthermore, why will PCE turn around - because people become tired of being pessimistic?

I am inclined to suspect that turn-around will hinge on external importers of US exports - ie Asia and Europe. I am not yet ready to be optimistic about either.

Ponies for Show Sun Mar 15 11:44:07 2009 CDT #

otishertz says:

"may be a 'bait and switch"
otishertz | Sun, 15 Mar 09 09:20:55 -0500 | #

this comment was originally longer. somehow the part after the quote vanished. where is the rest?

it included the idea of bankers taking pages from the mass propaganda play book of positioning well paid lightning rods to divert attention from the real crime. anger over hundreds of bailout BILLIONS is shifted to anger over the hundreds of bonus MILLIONS. they create their own opposition in order to control it. popular anger is hereby focused on only a fraction of the looting.

otishertz Sun Mar 15 12:08:12 2009 CDT #

M, says:

I'm calling my senators and my congressman tomorrow to ask them what they are doing about the AIG bonuses, when these people should be in jail.
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The number is (202) 224-3121 just ask for your representatives by name.
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The word of the day is OUTRAGE
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Remember Monday - 9 AM EST, start calling, (202) 224-3121

M, Sun Mar 15 13:33:35 2009 CDT #

Anonymous says:

Two kinds of service economies are possible.

1) A very productive economy in which the minority, domestic, goods producing economy adequately supports the population's need for food, shelter, electronics, etc. Not the US.

2) An uproductive service economy which does not have an adequate goods producing sector, and must borrow to import goods. This is an inherently unstable economy over time. It must develop sufficient goods producing sector before the inevitable collapse of its currency. The question is Does the US economy have the capablity to develop sufficient domestic industry before its capacity to borrow degrades?

Anonymous Sun Mar 15 15:16:15 2009 CDT #

2Kt says:

Roubini now moved to a slippery path of stock price predictions. There, he will find his maker, like many others.

At this point it's about time TV programs and publications start asking about list of clients of RGE Monitor. Every other stock analyst has to do it and so must Roubini.

2Kt Sun Mar 15 15:42:02 2009 CDT #

Ron says:

Thanks for posting this "CalculatedRISK." You continue to be one of the few fact-based data oriented sources of information in the media. Your blog is so valuable in a time where broadcast has evolved into total "spin."

Ron Sun Mar 15 15:48:51 2009 CDT #

http://weblog.ecommunics.org/gary.lammert/ says:

4/10/8/1 of 6-7 Weeks - Major Equity Devaluation Immediately Ahead
March 15th, 2009

The Operative Lammert Fractal Progression for the Wilshire is 4/10/8/1 of 6-7 Weeks.

The progression and ongoing integration of the macroeconomic universe’s internal factors is defined in its asset valuation saturation curves and is absolutely and perfectly mechanistic and predictable.

Over the next 5-6 weeks equities will have a major devolution in value as a 4/10/8/1-2 of 6-7 week Lammert fractal series is completed. This fractal progression can be seen more clearly with the use of the NIKKEI, FTSE, and DAX. This identified sequence has allowed a highly probable solution for the long term asset valuation fractal evolution.

The two cardinal mathematical laws defining the quantum progression of the macroeonomy’s asset valuations over time along the continuous valuation saturation curve that defines the self balancing macroeconomic system and constitutes the empirically and evidence based science of nonstochastic saturation economics are x/2-2.5x/2-2.5x/1.5-1.6x and y/2-2.5y/2-2.5y. The first series x/2-2.5x/2-2.5x/1.5-1.6x is a four phase fractal progression with the first three fractal quantum units representing asset valuation growth progression and the last 1.5-1.6x fractal quantum representing asset valuation decay.The above cited 4/10/8/1 of 6-7 week fractal is a four phase fractal proportionalty of this law. The recent 5 day valuation rise of the Wilshire conforms to a 1/2/2 day fractal saturation growth series or a 9/19/16 hour unit saturation fractal growth series constituting the first three quantum units of the four phase series. y/2-2.5y/2-2.5y is a three phase decay fractal with serially lower nodal asset valuation lows defining fractal decay.

The utility of this scientific model is its predictability of asset valuation saturation areas. Intervention to moderate can then occur.
As non-money asset valuations collapse, remaining outstanding debt grows relatively larger in size with ever greater difficulty in ability to adequately service. After gold’s devolution there will be little doubt that this collapse is a profound deflationary collapse where money owed on overvalued assets purchased near the leveraged valuation saturation highs cannot be repaid by declining after tax wages and the declining absolute number of jobs.

From the Wilshire’s March 03 lows and using nodal lows: the weekly fractal decay progression is 75/189/189 weeks. The second fractal of 189 is slightly more than 2.5x of the 75 week base, but the 75 week base fractal contains a time period of proportionally fewer trading holidays. This y/2.5y/2.5y decay sequence may be an interpolated second fractal of yet a larger 17/36/36 quarter year fractal decay series commencing in October of 1998.This is a millennium size decay fractal.

http://weblog.ecommunics.org/gary.lammert/ Sun Mar 15 16:07:16 2009 CDT #

GS Rome says:

Regarding the length of deflation:
Due to the faster flow of info, would inflation kick in faster? I assume that inflation is a function of fear. Since the Chinese have publicly announced their fear, they would look pretty silly if they kept throwing good money after bad.

GS Rome Sun Mar 15 16:45:05 2009 CDT #

Michael LittleBig says:

With all due respect to Professor Roubini,
Thank God that Congress has all the answers.

Michael LittleBig Sun Mar 15 16:47:44 2009 CDT #

Comments for Roubini: "Reflections on the latest sucker’s rally"

END