Roubini Sees Worst Recession in 40 Years
Submitted by
CalculatedRisk on Tue, 10/14/2008 - 10:57am (360 comments)
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Nice try, but I'm not at lunch yet.
third?
Love that Mandrake the Magician photo.
I tried clicking the image, but my browser has been hypnotized and refuses to leave the page.
So, Dow 10k by Friday?
He is such a dreamer.
As if we aren't heading to 1907 stylin' meltdown.
Top 5
No Nobel for You!
See Nouriel the Magnificent make faith in capitalism disappear! Oops...nevermind
All the LEH exposure listing is showing up. Is this new info? I see why Domino's Pizza Inc is tanking today, they most of their credit source.
looks like a bottom to me.
Don't let them know there's a new thread. I am really interested in hearing some serious contribution without all of the pithy replies.
i'm the polar nemo. i post the new thread annoucement on the old thread first ish.
not that nemo or his monkey could not do both at the same time. the only person to beat him could be CR. both are rockstars.
serious contribution
lmao.
Have some pity on us pithy!
Interesting Times writes:
serious contribution
lmao.
Interesting Times | 10.14.08 - 3:13 pm |
Hey, it does happe
CR, that reminds me...have you seen a chart of ECRI's WLI lately...a little bit of cliff diving there too I'm afraid. And ECRI is now calling for a deep recession. Seems to dove-tail with Roubini's prediction.
Not from me of course.
Still a grasshopper
I thought giving tax payer money to banks was going to solve all of this? How disappointing.
Here's a serious contribution: Another $700B bailout for all in our no consequences economy.
More anything? More everything!
Its seriously worrisome how reliably the market has been going positive at 3 pm lately. Is it really blatant manipulation?
Wait, are shorts allowed to short again? I lose track.
I wonder if Roubini practices that intense look in front of the mirror?
(sorry JoGa)
Hey, it does happen
JoGa | 10.14.08 - 3:14 pm | #
Here's one:
The unintended consequences of unlimited gurantees are unlimited.
Its seriously worrisome how reliably the market has been going positive at 3 pm lately. Is it really blatant manipulation?
Builder Bob | 10.14.08 - 3:16 pm | #
There has to be a way of tracking flows of stock transactions to reveal, buyers, which stocks, amounts. I'm new at this, hoping someone can answer.
3 pm is when the daytraders in Pago Pago wake up. Damn you all, Pago Pagoeans!
Who better to disect the paperprestidigitation than a guy named Roubini?
On the other hand...keep an eye on the constant Garten. He's the guy that laid out this Rescue Plan 5 years ago in the Times. He now calls for a Global Monetary Authority to oversee markets that have become borderless.
FT.com / Comment - Global authority can fill financial vacuum
Got One World Currency?
--
If I am not mistake, CR is for NO SEVERE RECESSION and progress is being made to repair the credit markets and thus the economy.
Next year CR will first enter the severe recession camp and then probable depression camp towards the end of 2009.
Fearless forecaster,
Jas
They tried to bounce this off a new daily low made just prior to 3 PM... hard to make that move stick...
Builder Bob writes:
Its seriously worrisome how reliably the market has been going positive at 3 pm lately. Is it really blatant manipulation?
Another thread commented about the con men pumping up the 3 card monte market, so the suckers put in their money just in time to watch it disappear.
It may be more than just a coincidence.
Hey does anyone know what's up with QID today? Can't get a quote...
@Roubini: "The stock market is going to stop rallying soon enough when they see the economy is really tanking"
Well, Duuuh, but WHEN?
Take physical delivery
Gold: The Last Carry Trade -- Seeking Alpha
Bloomberg babe just had a chart up shoewing that some $30 trillion has been lost in share valuations worldwide over the past 12 months.
Toss in real estate losses and that sounds like some serious loss of capital to me.
Foolish Jas!
The Masters of Money have conquered the Wave. You, not CR, will change your tune in 2009!
Mu ha ha ha.
I agree with Kunstler the GOP under Bush has wrecked America so Americans had better get a new "Dream" and fast !
And all in all, and pathetically, 9% unemployment doesn't sound that bad when compared to depression era unemployment numbers (unless, of course, I end up being one of the unemployed).
You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.
The market didnt go positive on thursday at 3pm. Such a theory could prove costly.
And, as they say in Chicago, "If you are not at the table, you are on the menu."
It's a "No Go" for the status quo.
10 year at 4.04%
Broward Horne, To Jas' credit, he admitted all his past forecasts have been proven wrong - but he is "fearless" so he is predicting a depression once again. Someday he might be right ...
For me, I get some right - I get some wrong. I have no crystal ball, but at least I'm not a broken record like Jas.
Best Wishes.
I taught that Roubini kid everything he knows, he was always an optimist.
40 years -> 1968
Nope, haven't had a net credit unwind/deleverage since 1968. This will be worse, have to go back further.
I don't care for needles and shots, but can I haz some capital injection, plz?
Jett Rink,
You misunderstood. This financial bailout package comes only in suppository format
snap
Mission Accomplished indeed GWB.
Ok so wage and price controls in 2012!!
Actually, "worst" I guess is a gross measurement compare, because I can't see the slightest similarity between the two periods besides the horribly expensive war itself...
Otherwise, we had savings, we were an exporter with a magnificent industrial base, we had a huge untapped population of workers(married women) that could generate wealth.
Uh oh.
NR, not yet, you must begin to see that the market must rally for a couple of weeks, until the election is over.
Then you get a resumption of the free market (well, as free as it will be now;-).
Folks are ready to panic at the drop of a hat, skip that and take your time. All is well in hand now, whether anybody likes it or not.
Like I said before, the crisis on Wall Street is contained, and Main Street will have to wait until after the election.
Someday this war's gonna end...
For me, I get some right - I get some wrong. I have no crystal ball, but at least I'm not a broken record like Jas.
Best Wishes.
Calculated Risk
I'm wondering if we're starting to see your interest rate scenario come true.
If the flight to quality is largely over we could start to finally see treasuries reacting to foreign capital flows.
let's regress and put them childrens and babies to work.
It ticks me off how market makers are so distorting the opening and closing 90 minutes because they know they can easily trade in after/pre-markets to muscle others out of their positions
2:1 up/down volume on NYSE currently. Shorts have woken up, but not out in force
18-24 months? I'll believe that when you tell me what's going to bring us out of recession.
Or will we sink so low that "growth" may well begin at 18-24 months -- but growth beginning from a much lower level of economic activity than we have now?
I am far more pessimistic than the good Dr.
I sit here at my desk at work---for now---and gawk wide-eyed in utter amazement at the depths to which human beings will go in order to satiate their lust for power and their Midasian greed. Paulson, Bush, Bernanke: soucndrels, one and all. Scumbags of the highest order. Liars who would sell their souls to the devil, who would swear on the lives of their families, that they are telling the truth. But no amount of dissembling or obfuscation can change the laws of nature: reality, in the end, always wins out.
Toxic assets in the tens of TRILLIONS of dollars fill the casks and vaults and safes and basements of the worlds major financial institutions. Worthless pieces of paper that, when exposed to the light of day, will bring the global economy as we know it to its knees. There is no escaping this reality. None. The laws of nature will eventually pull the curtain back on the Oz-like charade that is being played out in Washington and Paris and London and Berlin, and the global economy will shatter.
And so in the intervening days/weeks/months, Paulson and Bush and all of their minions pump trillions of dollars of money into these so-called healthy institutions in order to loosen the credit market so that, at least for the time being, things regain the appearance of a recovery. And an election takes place next month, and the DOW rebounds to about 10,400 give or take, and a few of the largest banks begin easing credit restrictions and reluctance to take on risk, and all seems to be moving in the direction of eventual better times. And yes, recession exists, and the economy is tight, and jobs are lost, but the new President goes on TV and tells the people that, while times are tough, we are a strong people, and we will recover. (Meanwhile Bush and Paulson and their minions have moved to a small island off of the coats of Costa Rica and hired Blackwater to protect them from the rest of the world.)
But soon thereafter, at some unknown moment in time, all of the fake money, the supposed assets and capital that the Bushies have pumped into the system---all of the trillions of dollars in guarantees promised by the countries of the EU to their financial institutions---all of these monies become exposed for what they really are---MORE DEBT. More lies, falsehoods, specters. Trillions of dollars THAT DO NOT IN FACT EXIST, loaned to banks and insurance companies and auto makers in hopes that they, somehow, will be able to make some money and build capital that, at this point, is simply a wraith in the night. But of course this plan fails. It must fail. It is just another layer of the grand ponzy scheme of the millennium, perpetrated on the people of the Earth by a handful of greed-mongering bastards and sons-of-bitches.
By way of metaphor, this situation is akin to building a tower on unsteady ground, and instead of deconstructing the tower and starting again, you simply make the tower taller and claim to the people that this truly is the most wonderous tower in the world, a monument to the strength and resolve of the people. But it must fall. The laws of physics demand it. And the same is true of our current economic joke.
And so I sit here and watch economist after economist, legislator after legislator, president after prime minister after finance minister, claim that the plan will work. And they are all lying.
It cannot work. It cannot. The laws of nature will win out because they always do. Always.
Welcome to the NBA stock market. It's all about free throws in the final minute.
If any of you believe in the "max pain" theory regarding opx week you'll see that quite a few stocks are hovering right around the maximum pain point right about now.
Ciao
MS
The great thing is plenty of prognistications of when the "recovery" is going to start. Probably by the same people that told us it was going to start 3Q this year!!
I guess they have the "cheerleader special" keyboards, which don't come with the "L". Everything simply must be "V-shaped".
BTW why do we get pictures of Nouriel Roubini but not Meredith Whitney?
Seems like a bit of a double standard...
The quote
Its from Jackson
"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution BEFORE MORNING.
Andrew Jackso
I went to the local pawn/gun store in town and was talking to the salesman about safes and he said that they were out and they havent been able to keep them in stock. He seems to think that the buyers are people who have pulled money out of the banks and are now locking it up at home. He also mentioned that the distributors are charging more for them nowseems demand might be on the increase. If this is true, wow.
Bob Dobbs,
I said 18-24 months would be a good/solid/quick recovery for the circumstances. If the US has to keep borrowing while the economy deteriorates because earlier spending was ineffective, then it gets a sovereign downgrade. The rating's agencies will probably follow the treasury prices down, so it won't be their choice either
Paulson himself said we were going to add over 500k jobs in the second half......of this year.
Ciao
MS
Another good post I copied from here two weeks ago - forgot who posted it tho - sorry!
Whoever mentioned the 'lessons of the Depression' is off base. The lesson of the Depression is that the gov't should try and fix prices higher than they should be, particular for goods, services, and labor. That hasn't happened yet - but that is why unemployment was so high.
Most of the other stuff the gov't does is penny-ante compared to forced unemployment for 10-15% of the population. Sure, the new deal was idiotic and the new, new deal that obama will implement will be wasteful and pointless. And intentionally losing 500 billion+ taxpayer dollars is generally bad news. But spreading that out over time it isn't anything that we're not used to on a yearly basis.
In my view, these interventions don't really do anything if you aren't caught short and have to cover. The market is going to go where it is going to go, all the government can do is shift the time and make that movement more volatile.
The big problem is unemployment as a result of unprofitable businesses getting liquidated. As far as I can tell, only Freddie and Fannie were saved from this fate. And possibly AIG although my understanding is that the issue w/ AIG is holding assets away from the fire sale, not continued operations.
All these mergers will lead to major layoffs. Those layoffs will lead to main street losses and then layoffs in manufacturing and consumer goods companies.
All of this will lead to way lower earnings and there is nothing the government can do about that unless it wants to purchase the entire stock market on margin. I don't think there are enough idiots in the world willing to load the government money to do that.
I really do hope the lessons of the Depression are learned and we let the businesses fail, let unemployment spike, and let wages fall and then people will be re-employed and things can begin to get better.
VIX 57.77
gosh, changing the short rules, etc. having unintended consequences?
Delayed effect of that last line of coke at 3pm...
Ciao
MS
Huh! A UPS guy just knocked on my door, I said to him I did not order anything.
He said it was compliments of the US Government, a free Box of Wooden Arrows.
Enjoy.
T. Paine prescient remark about Paulson's actions and Wall Street:
"To argue with a person who has renounced the use of reason is like administering medicine to the dead." Thomas Paine
Yea - 1968. What an odd number,
Maybe he meant since Carter's stagflation of the early 70s, 35 year ago?
Now that is something we all see coming.
ext market collapse:
Economists Warn Anti-Bush Merchandise Market Close To Collapse | The Onion - America's Finest News Source
But no rum!
Dammit! I always miss out on the booze!
brokenotbroken writes:
I went to the local pawn/gun store in town and was talking to the salesman about safes [...]seems demand might be on the increase. If this is true, wow.
Still don't get it. What is rationale for physically physical currency?
borkafatty
HAHAHAHAHAHAHa!!!!!!!!!, good one. Now for a billion USA-Zimbabwe dollars you can buy one bow.
He said it was compliments of the US Government, a free Box of Wooden Arrows.
LOL
How neopaleolithic of them!
Hey Apple is selling $999 laptops....
about two year's too late IMO.
Ciao
MS
Typing too fast.
Still don't get it. What is rationale for physically holding currency?
Duncan: The Olduvai Theory of Industrial Civilization
JoGa,
They don't trust banks or the market, but still trust money has value. Just my guess.
"The laws of nature will win out because they always do. Always"
The crowd in charge believes that they now can create reality. They'll create a reality and we'll scramble after them trying to figure it out under the old rules of fair play and justice. Meanwhile, they're fabricating yet another reality.
I wrote recently that this is the biggest and baddest reflation in the history of the world.
The reason why I think it is the worst is because the U.S. and Europe are attempting any trick in the book to keep the Ponzi scheme alive by attempting to keep asset prices at totally unrealistic levels. It should by now be obvious that they are trying to inflate out of this mess.
The problem with this approach is that it creates an even greater glut of high quality government bonds especially treasuries which will result in significantly higher market interest rates. The results is that in this risk adverse environment, money flows from emerging and less developed countries into bonds in safe heaven countries.
As we just now found out, the global finance economy is too integrated to allow any major player to fail. This, however, is to a lesser degree also true of the real economy. The global supply chain is more integrated than ever. The unlimited liquidity PLUS economies are choking the real economies of the commodity and supply chain countries leading to an even worse disruption of the real economy in the G7. Investments in commodity producers are fraught with risk and therefore have to deliver high rewards. In this case money is fleeing leaving producers unable to finance their activities. With little to no inventory in these JIT times, hoarding and much higher prices are inevitably the result.
Higher commodity prices right when the real economy hits its worst bump.
apple is right on time
luxury market dying, time to put out windows style cheap junk
EvilHenryPaulson writes:
Jett Rink,
You misunderstood. This financial bailout package comes only in suppository format
EvilHenryPaulson | 10.14.08 - 3:28 pm |
Thanks anyway, I'll just go back to my providing the capital for the injecting.
We'll see about that monta, I really think you should just cancel Xmas....many people already have.
Ciao
MS
The dollar will be a bartering tool/value within the USA.
I'm not canceling Christmas; I'm just canceling a lot of my other discretionary spending.
They "forgot" that the whole point of free market economics was not fighting the laws of nature.
My opinion on the 3 PM thing is that the margin clerk usually finishes up somewhere between 2:25 - 2:45 and it's simply an abatement of selling.
JoGa writes:
Typing too fast.
Still don't get it. What is rationale for physically holding currency?
I don't know. I guess many old-timers revisiting the fear of bank runs. The local population is mainly older, retired folks.
I just found it very interesting. The fear is real for some.
ah, not this year
now next year, i propose a holiday called thanksmasyear
would save holiday pay, increase worker output, and without christmas no need for the presents
as for apple - they will bump down like everyone, but they will be just fine
connectivity and quality still matter
What is rationale for physically holding currency?
JoGa | 10.14.08 - 3:41 pm | #
It is hard to spend electronic digits in someone else's computer in a banking holiday
IMO, investing in gold in the US is kind of like keeping your gambling winnings in the safe deposit box in a casino that has a history of confiscating your money.
When the crap really hits the fan, like in a depression, the president can just sign an order confiscating your gold or capping the price at some low level. Gold hoarders have no lobby, no political pull- in a crisis most Americans will think it's real funny to watch the gold bugs take it in the teeth.
I've resigned myself to the fact that the best way I can fight inflation is to do what I've been doing lately- going from bank to bank on the internet and find the bank that pays the best interest rate on FDIC-insured deposits. If I can find 5% yield a few weeks ago in this environment, I expect I'll be able to find banks paying 8% or so when inflation and interest rates are higher.
"I wonder if Roubini practices that intense look in front of the mirror?"
You won't know intense looks until you talk to Conjure. Then, you'll know.
Is that "worst recession IN 40 years" or "worst recession FOR 40 years" (Biblical duration)?
"Government moves again to unclog credit lines" - AP
Because there aren't enough loans for the throngs who want to buy Ford Expeditions?
More credit - it's the only answer to every problem.
oGa writes:
Typing too fast.
Still don't get it. What is rationale for physically holding currency?
JoGa | 10.14.08 - 3:41 pm | #
Don't be so sure that they are putting dollars in it...
Apple gave up on the edu. market in the mid- 90's. Totally screwed themselves until the IPOD. I gather having today's young workforce (who should have been educated on MACS) would be paying off in spades right about now.....much more than it is already.
Ciao
MS
CR - I'm just funning Jas, I happen to agree with quite a bit of his thoughts.
I'm old enough to have seen how the employment world & culture has changed and each year I have less interest in fighting it.
The Federal operation was a success but the patient died.
Is that "worst recession IN 40 years" or "worst recession FOR 40 years" (Biblical duration)?
Not One Cent | Homepage | 10.14.08 - 3:46 pm | #
One major unknown affecting economic models is availability and pricing of energy.
Still don't get it. What is rationale for physically physical currency?
Really?
We have a fiat currency.
Fiat currencies have a bad habit of collapsing during severe economic downturns when the government attempts to print their way out.
There is a legitimate historical foundation for their concerns.
And all in all, and pathetically, 9% unemployment doesn't sound that bad when compared to depression era unemployment numbers
You might want to check out U-6 unemployment numbers which are far more comparable to the unemployment numbers during the great depression.
Just an observation: I am seeing very little commentary on the massive amounts of liquidity being put into circulation. Kinda like the "all is fine" discussions of the housing bubble in Q1 2006.
just say'
The Dow hit 100 in 1907. It last hit 100 in 1943.
"I wonder if Roubini practices that intense look in front of the mirror?"
Depends on what his mirror tells him.
I've seen a lot of Roubini on the news of late, and find his dry pessimism is somehow refreshing. We could use a modern equivalent of Cato in government to oppose this financial bacchanalia.
Can anyone explain to a noob like me how "capitalizing" the banks with yet more liquidity will have any effect on untold trillions of damage? Or, does Wall St. simply want to push up another speculative run before everything crumbles into dust?
For anyone who wants to follow a potential surge of inflation storyline:
ArcelorMittal has started announcing the 15% production cuts they threatened a couple of weeks ago. Everyone else will follow suit (so far the cuts were in Europe, their American holdings include what was Dofasco which is at the high end/efficient/insulated from the automaker decline. Asia still needs loads more of steel. Africa probably imports all new steel due to power requirements)
The smart people who have physical gold understand that those coins or bars are worth much more than a spot market price.
In an extreme case one of those pieces could go a long way towards saving you or one of your family member's life.
Think about it in that way...
Ciao
MS
Maybe he meant since Carter's stagflation of the early 70s, 35 year ago?
Now, now... that was really LBJ and Nixon's stagflation.
Carter was just there when the crime was discovered.
"was talking to the salesman about safes and he said that they were out and they havent been able to keep them in stock"
The percentage of people who purchase safes in any time period is low. It doesn't take much of an increase in demand to deplete inventories.
MS - agreed, but maybe, as in many things, from the ashes rose something better
and perhaps that is the lesson for our gov't/economy
the apple model is perferable to the microsoft one
wring out the excess, go close to death and then rebuild something worthwhile
Microsoft has become to big to succeed
I am seeing very little commentary on the massive amounts of liquidity being put into circulation.
largesse to middle managers now that CEOs have been spanked.
Privatized profits and Paulson/Bernanke's treasonous socialized risk has gone the way of the dinosaurs. Enter the beginning of a new age of Enlightenment. Adios voodoo economic deregulation.
"Apple gave up on the edu. market in the mid- 90's. Totally screwed themselves until the IPOD. "
They're making a pretty good comeback at the university I work for. The math and science geeks go for Windows laptops, but for the liberal arts majors and the media freaks, the CPU of choice is a MacBook. Most of the university admin staff is on Macs as well.
On Apple - Most of the techies and trendies already have their MacBook Pro at this point. Apple needs to open up a new space down-market in order to grow volume. Why should they let the other laptop companies have that to themselves? It makes sense to me...
Is that picture from Glamor Shots at the mall? I have one of myself just like it, but I'm wearing a pink boa.
so what happens after Steve Jobs is out of the picture?
If they confiscate everything through fiat money or fiat orders; I will at least have the satisfaction of heaving a gold brick at them as they come to collect.
We need some AIGs Toes commentary right about now.
Apple, great company. Extremely overpriced stock due to the media attention it cultivates.
"The smart people who have physical gold understand that those coins or bars are worth much more than a spot market price."
Can't eat gold. King Midas would concur.
I am seeing very little commentary on the massive amounts of liquidity being put into circulation.
We've been talking about it endlessly for the past year and a half or so.
Now that it's finally here we're kind of resigned to reality.
Can't eat gold. King Midas would concur.
Or paper dollars either but i'd admit they are better on the a$$.
"Fiat currencies have a bad habit of collapsing during severe economic downturns when the government attempts to print their way out."
Yes, and governments have a bad habit of defending their collapsing currency by all means necessary, which most assuredly includes limitations on private ownership of gold. Don't bet against a wounded bear.
The good news about inflation is that it's generally accompanied by high interest rates, so you should be able to find some CDs, etc paying good rates.
so what happens after Steve Jobs is out of the picture?
Apple will finally make a 2-button mouse.
They're not confiscating gold, their long-term goal is to confiscate the worker's labor into perpetuity.
OK , I'm back lets see what i missed....
Hold gold and hold paper money in front of a seller's eyes in times of exigency.
It's like an exquisitely beautiful woman. The beholders go all goofy and fall all over themselves to get anywhere near it. And to touch it, well...
Can't eat gold. King Midas would concur.
rps
I dunno, Women love gold and there's always a demand for whatever the wife wants
"so what happens after Steve Jobs is out of the picture?"
About 25% of it's share price initially. After that who knows. Never have the fortunes of one company been as concentrated as they are with Apple and Jobs. What would Berkshire be without Buffet?
About the same result.
Ciao
MS
"In an extreme case one of those pieces could go a long way towards saving you or one of your family member's life."
I must admit that I find these predictions of a secular apocalypse a bit annoying. There has never been a state of general anarchy and lawlessness in this country. I don't expect to see one because I don't see any reason why it should happen - saving a severe global natural disaster or world war. Not for any economic reason, though.
In Sierra Leone or Liberia, perhaps.
the gov't goal is simply to keep the banks up as long as possible
the idea being that if these banks do not fail, then the CDS and their derivatives do not come due, and the systemic risk is averted
likewise, doing so allows banks to lend because they know they will never have to pay off any sort of huge CDS hit.
and once all of the insured binds run out, hopefully a CDS exchange and regulation is in place to take down the opacity and sheer size of these side bets.
now, whether it works is a better question.
my guess is that it takes massive domino style failures off the table. unfortunately it does so at the cost of any true profitability and growth in the banking industry.
back to the old boring model. borrow at 3% lend at 7% rinse repat with 7-10x leverage.
it works, but it is boring. like being a public utility really.
Olduvai theory is fatally flawed because it ignores the fact that the world is controlled by an occult ruling class. They will not allow civilization to return to stone age levels of energy use. Instead, they will simply kill off as many sheeple as necessary until whoever is left has enough energy to continue the advancement of technology.
Famous last words heard in Argentina, Russia 1917-1998, Germany 20's&40's, Iceland now.
Ico421,
How is what you said not the Olduvai theory?
I must admit that I find these predictions of a secular apocalypse a bit annoying. There has never been a state of general anarchy and lawlessness in this country.
Me too.
Look, what we think of as "America" or "the world" and its current power structures rest on top of local customs, local governments, local cultures. In case of an emergency, don't you think people would revert to local order instead of just going shithouse bananas? Honestly.
Only people who live rootless lives disconnected to any community (read: exurbans) harbor these anarchy fantasies.
Can't eat gold.
That is one of the characteristics that make gold a good money. Would strawberries make a good money? Gold is not really that important for much else. If someone does not have a surplus they will not trade and if you do not have something they need they will not trade. What you need is something that everyone wants but no one needs.
Plantagenet writes:
"was talking to the salesman about safes and he said that they were out and they havent been able to keep them in stock"
The percentage of people who purchase safes in any time period is low. It doesn't take much of an increase in demand to deplete inventories.
Yep, I agree. Just my anecdotal fear mongering
"The Dow hit 100 in 1907. It last hit 100 in 1943."
Let's call Bob Precter and ask him when the DOW will next hit 100.
Pavel-
Attention to the first four words:
"In an extreme case...."
You'd rather have them and not need them then not have them and need them IMO.
Ciao
MS
that guy roubini, he just keeps scaring the hell outta me
for halloween im going dressed up as roubini but just adding two fangs and a black cape
kind of a dracula image dont ya think
ac writes:
Still don't get it. What is rationale for physically physical currency?
Really?
We have a fiat currency.
Fiat currencies have a bad habit of collapsing during severe economic downturns when the government attempts to print their way out.
There is a legitimate historical foundation for their concerns.
That's kind of my question - seems to be the safe will be worth more than the currency inside of the safe (unless, as suggested above, the buyers are using the safes to hold cash, but something else instead).
Can't eat gold.
That is one of the characteristics that make gold a good money.
Also, it is really shiny. You cannot discount the shiny factor.
"Just my anecdotal fear mongering"
Don't get me wrong. It's like shopping for a generator before a hurricane. The hurricane is real.
johnny
having your debt in your own currency solves a lot of problems
quite simply put
all of your examples fail for the simple reson that the dollar is the new gold. everyone uses it and hoards it.
yes we have consequences for our debt creation, but defaulting on our obligations in a foreign currency is not one of them.
its good to be king, even if you are really bad at being the king.
Wells Fargo has been unscathed so far, but man do they ever flog reverse mortgages hard. "Now my house does more than put a roof over my head, it pays for my healthcare"
ps - the same exurbanites who harbor these anarchy fantasies are the same ones who get a secret righteous thrill out of their fear-fantasy that Obama will be assassinated by Republicans.
These brainless pseudo-affluent exurbanites need cut out the drama, shut up and sit the fuck down.
Monta, spare me forever that kind of profitabililty and growth.
ac - The massive amounts since August 0f 2008 and now other foreign counties is a new sequence of events that to my mind has never happened before. Does it shield the draw of deflation or cause spikes in short term notes driving up the cost of business. We have seen the commodity bubble all but burst and this sides inflation worries for awhile.
its good to be king, even if you are really bad at being the king.
monta's ankle
Except when "they" get you.
that guy roubini, he just keeps scaring the hell outta me
He does so because he tells it as a matter of factly without any fanfare but somberly with gravity.
If he's lying i sure wouldn't want to play poker with him.
I find these predictions of a secular apocalypse a bit annoying
Me three. If you're bartering for your life with gold, chances are you won't live long in any case. If such are conditions, a loaf of bread is worth more than a pound of gold.
Olduvai theory says that humanity will return to the stone age after a breif period of industrialism. This is not true. humanity will come to an end at the end of the industrial age. At that time, a new species will emerge. That will actually be the catalyst for the end of the industrial age. Humanity will be eradicated, not left to chuck spears on the savannah.
And, yes, I am stupid (and knowing this makes me smarter than many). But I am willing to learn.
"cannot discount the shiny factor.
Elvis"
LOL!
A few are now calling frugality the new black - dont show your money at any cost! So, shiny might be out of vouge
OPERATION STATUS
FULDA TO CENTCOM
POSITIVE PRESSURE IN CHUNNEL CLEARING
NERVE GAS TOWARDS UK END
BARRICADE CLEARING AT 2 KILOMETERS PER DAY
Z-DEVICE TEST PUT ON HOLD
NEUE FINANZ AMPHBIOUS KORPS REGROUPING
EMP ATTACK ON LONDON SCHEDULED FOR 0200 GMT 15 OKT 2008
FULDA
Is Roubini gay ?
Doesn't anyone want to know what Elaine Garzarelli thinks?
There is safety in community, and only in community.
What does Roubini know? He's called this wrong from the beginning.
[sarcasm]
How many different ways can I put it:
IN AN EXTREME CASE
Get it? Got it? Good.
Have fun jerking each other off about whatever you want to make out of being prepared. I am....are you?
Ciao
MS
But what does Abbey Cohen think???
the apple model is perferable to the microsoft one
Apple is in the discretionary market place whereas MS is now squarely in the mission critical arena. MS has much more staying power*.
Richard Russell's Dow Theory Letters dated October 6, 2008 noted: "Can the dollar hold up in the face of a probable series of trillion dollar deficits? Improbable. How long will our creditors be willing to hold and continue to take in dollars in the face of monster US deficits? Remember, the US is the only nation on earth that can manufacture (out of thin air) the fiat currency to pay off its debts. We won't be able to print our way out of this bear market -- our creditors won't allow us to do it. At some point, I believe, our creditors will demand gold instead of Federal Reserve Notes. At that point, it will be to the US's advantage for gold to be as high-priced as possible -- What will we do?
The US will cut loose the price of gold FROM ITS CURRENT ridiculous official price of $35 an ounce and give gold to our creditors at a price of $30,000 an ounce".
ot that nemo or his monkey could not do both at the same time. the only person to beat him could be CR. both are rockstars.
serf alan greenspend | Homepage | 10.14.08 - 3:13 pm | #
yes they are
but hey im tellin you guys
Nemo has this monkey seated at an identical computer next to his
he pays the monkey (in bananas) to keep hitting the refresh button over while the monkey watches the CR page
when the monkey screams (new blog entry) Nemo comments "first"
there's no way to beat him unless you get your own monkey
hey paulson, get over here
Despite Roubini's awkward attempt at looking sexy and brooding, he generally is right. Except for the part of ``We're going to be surprised by the severity of the recession and the severity of the financial losses.'
Trichet's address :-
Bloomberg News
"I dunno, Women love gold and there's always a demand for whatever the wife wants" EvilHenryPaulson
False assumption. Women understand the fragility and risk of creating life and giving birth. If women can put their lives at risk then men at the very least must "help" provide shelter, food, and defend against predators. Can't eat gold. Women know this. Labor is the bartering tool. Gold doesn't replace labor. Women do LABOR.
Geez, for now I am with Pavel:
http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=313625
Sounds like they have total panic right now in Iceland, gee, we might be able to get some young people to move back to the rural areas and stop being investment bankers.
The boom ran waaaay to far and collapsed, and now they have to go back to boring things like making money the old fashioned way, by earning it. Boo, hoo.
Someday this war's gonna end...
Is Brian Westbury still calling for dow 16,000?
MS,
Apple's back in edu. My friend is IT director for Fullerton school district. Lots of OC schools running mac now.
He gets all expense paid trips to the mac expo...bastard.
Nostrovia,
Apple has 90% market share of PCs costing over $4000.
For Halloween, I'm going to strip off all my clothes, glue monopoly money all over my body and go as a "Bailout".
Then I'll tell everyone to grab whatever they want!
Wow....the PPT boys could only manage a 200 point push up today from the lows.
Those guys are losing their touch!
3-month Libor @ 4.635
3-month T-Bill @ 0.259
TED Spread @ 4.38
[sarcasm]Credit markets look fixed to me...[/sarcasm]
Back on the short bus it is for me.. let's see how many ways Uncle Sam can rob me.
For Halloween, I'm going to strip off all my clothes, glue monopoly money all over my body and go as a "Bailout".
Then I'll tell everyone to grab whatever they want!
Broward Horne
To save money on the soaring cost of glue, I recommend staples.
"IN AN EXTREME CASE
Get it? Got it? Good."
It's a scenario. Didn't mean to tick you off, but I really do think that more optimism and fewer jeremiads would be helpful.
No offense intended.
godhatesfangs writes:
Is Brian Westbury still calling for dow 16,000?
That guy can't even go out in public anymore...couldn't stand him.
wonder what Lance McDaniel thinks...
Pavel writes "I find these predictions of a secular apocalypse a bit annoying. There has never been a state of general anarchy and lawlessness in this country.........
I don't expect to see one because I don't see any reason why it should happen"
And that's the rub.... One blinkered into a sense of entitlement by the good life is very likely to be blindsided and totally incapacitated when things spin slightly out of control. That individual will interpret minor setbacks as "chaos" and will act accordingly.
So rps, after the apocalypse, I should be able to buy some women for gold? After all, it worked like that for oh, seven thousand years of recorded history.
Feh. Read Ferfal from Argentina, if you have a collapse it is useful as a storehouse of value, not the end all and be all of civilization. A case of scotch would be of equivalent value for a while.
Why is everyone concentrating on the end of the war so soon? This will take a looooong time to get there.
This is starting to become a parody of how not to survive the coming crisis in 2012, when the Mayan calendar ends
Someday this war's gonna end...
Roubini is a Nouriel come lately.
I have heard it told that Conjure predicted the exact timing of this plunge back in 1072, in Alexandria, and commited the forecast to a papyrus scroll written in Coptic.
In 1490, the legend goes, Conjure translated his old work into Latin, and shared the forecast with Ferdinand and Isabela.
So what if Roubini has been right the last couple of years. A drop in the ocean of history.
Roubini says 40% house price drop. If so, the middle class will be wiped out.
We talked about this possibility months ago. Household net worth is going to end up looking very nasty, given what the market losses will be.
Ah, the smell of doom and gloom in the air,
must be the bottom!
I must admit that I find these predictions of a secular apocalypse a bit annoying. There has never been a state of general anarchy and lawlessness in this country.
Rob Dawg made an excellent comment in an earlier thread:
HaloScan.com - Comments
What we see now isn't so much about who the next President may be but rather a desperate scramble to try to make sure the next President isn't the last President. Upheavals are made of governments reneging on promised benefits. People don't seem to grasp just how close we came to toppling the Federal government in 1932 during the Bonus Marches.
It could easily happen again just in different form.
more optimism and fewer jeremiads
i agree. don't worry be happy has worked real well so far.
If you're bartering for your life with gold, chances are you won't live long in any case
In the late 80s, I worked with Vietnamese boat people who traded gold for passage out.
Except for one guy who admitted that a group of them just shot the captain and took the boat.
What we see now isn't so much about who the next President may be but rather a desperate scramble to try to make sure the next President isn't the last President.
Hopefully a little ACORN will grow into a great tree.
I find these predictions of a secular apocalypse a bit annoying
Me three. If you're bartering for your life with gold, chances are you won't live long in any case. If such are conditions, a loaf of bread is worth more than a pound of gold.
You are obviously not Jewish. And without historical perspective.
Obama to redistribute wealth?
News for Obama fans: There is no wealth left.
Did you all catch the Journal article today on "Smart Money Stays on the Sides" on front page of the C section?
Very good article.
Together with the Hedge Fund pull out and the $60B+ taken out by Mutual Fund participants this month alone, who is actually playing in this market?
The outflows of cash are historic.
Roubini says 40% house price drop. If so, the middle class will be wiped out.
We talked about this possibility months ago. Household net worth is going to end up looking very nasty, given what the market losses will be.
mp"
They will just be BK, default on their credited purchase, and will have to live within their narrow means. Nothing to worry about...
EvilHenryPaulson - where do you live? I have never heard nor seen anything from Wells pushing HECM product in my neck of the woods.
I chuckle at the presumed real value of gold. Gold is as much a fiat currency as paper, wampum or electrons on the computer banks of financial institutions. The value of gold is its arbitrary desireability combined with its scarcity. Besides, there is not enough gold in the world to operate the modern world economy.
Why not germanium?
Re: the 3:00 magic (up or down). One easy, possible explanation is that if you buy index mutual funds, at least some banks (like one of mine, USAA) only makes purchases/sales one time per day, right before the market closes. So you make your decision to buy or sell the day before, you have to wait until close of business the next business day for it to actually get done.
A similar phenomenon occurs with end-of-the-month regular 401(k) and 403(b) contributions, which always occur within a two or three day period pretty much for everyone.
I've thought, in fact, that some smart hedgie would exploit the predictability of these moves (especially the end-of-month mass purchases). In fact, I'm sure someone has.
In other words, these patterns will "naturally" occur, even without something ridiculous like the PPT.
ac - The massive amounts since August 0f 2008 and now other foreign counties is a new sequence of events that to my mind has never happened before. Does it shield the draw of deflation or cause spikes in short term notes driving up the cost of business. We have seen the commodity bubble all but burst and this sides inflation worries for awhile.
Barley
I dunno... with the credit collapse we are still in a deflationary environment IMO, but the extreme actions and the statements that "we'll do whatever it takes" add more credibility to the possibility of hyper-inflationary scenarios.
I still think this is unlikely, but I'm not going to totally dismiss people who've made predictions as accurately as Faber and Rogers have in the past. Plus their arguments do have historical credibility.
I think another possibility is mild deflation over the next several years accomplished by dramatically increasing the monetary supply that turns into a severe inflationary event 5 to 10 years from now when credit and velocity returns.
I just don't feel confident about any solid conclusion right now. The blender is on full speed, and until the chaos dies down I think anything can happen, though nothing that's likely to be good I'm afraid.
So Citizen AllenM, try telling that to a woman with a shotgun. Who the heck do you think was defending the homestead when the men went off to wars? Annie's got her gun.
I drop scotch in hard times, I cry. I drop gold in hard times, I cry only if it hits my foot.
The Rothchilds are Jewish........holders of one of the largest private reserves of gold.
I was surprised to see the article recommend that we should give these clowns Global Monetary Authority. Then I saw that the author is a Yale professor (perhaps a friend of Ben).
Why not germanium?
Why not Mackerel?
Why not germanium?
Catfish
Is it shiny?
brokenotbroken:
Curiously, I was talking to an officer at a local (Chicago suburb) bank Saturday and she mentioned that a lot of folks had been taking cash out of the bank -- and that the owner of the local hardware store had told her that he had had a run on safes -- completely sold out his inventory.
Holy mackerel! Is that confusing god and mammon?
"People don't seem to grasp just how close we came to toppling the Federal government in 1932 during the Bonus Marches."
From what I've read, these people had no intention of toppling anything. It was MacArthur who brutalized them.
There's a great story about FDR receiving as phone call during a small dinner party at Hyde Park. He chatted amiably with the person on the other end of the call, and when he hung up he told the guests: "I've just spoken with the most dangerous man in America."
They laughed and said: "Who was it, Hughie Long?"
"No,' said Roosevelt, 'it was Douglas MacArthur.'"
Eeek... approaching 4.08% now. Hope you guys got that fixed rate mortgage a couple weeks back.
Can someone please explain gold to me?
You can't eat it. It won't keep you warm. To my knowledge it has no unique mfg capabilities. Why do you want it in bad times? It swould appear to be something of a medieval idea.
Pavel
right you are.
Why not copper instead? I have lots of pennies...I am rich!
Don't Worry! Be Happy!
YouTube -
CIT to sell $8 mln in shares to pay div on preferred stock
That makes cents? not....
BelieverJeff writes:
Can someone please explain gold to me?
You can't eat it. It won't keep you warm. To my knowledge it has no unique mfg capabilities. Why do you want it in bad times? It swould appear to be something of a medieval idea.
.....
yes, medieval, like the notion that torturing someone produces truth.
I think the answer to your question is that the US is a medieval place: torture, loose talk about crusades, throwing people into dungeons, direct lines to god.
You can't eat it. It won't keep you warm. To my knowledge it has no unique mfg capabilities. Why do you want it in bad times? It swould appear to be something of a medieval idea.
You're absolutely right, it's a barbarous relic, but these are barbarous times.
It swould appear to be something of a medieval idea
So is gunpowder and many modern Americans believe it has no utility, either.
In a deflationary event, most things lose nominal value. The trick is to own the thing that falls the least. In case you hadn't noticed, gold is up about 300% since the 2001 crash.
The current crash is a continuation of the 2001 crash. I'm fairly that's how history will read it.
You can not make this stuff up...
CIT announces its intention to sell $8 million in common stock to pay its preferred divs.
Lets get this straight - please buy my stock so I can deploy the capital to the preferrd holders.
How do you possibly sell this...
"I think the answer to your question is that the US is a medieval place: torture, loose talk about crusades, throwing people into dungeons, direct lines to god."
Especially the direct line to God part.
re: Apocalypse
I'm as bearish as anyone when it comes to the unrecognized losses, but a default of the US national debt would be more noise than anything else. It's happened to many other countries, smaller ones mind you, and it's pretty simple what happens.
The standard of living falls, the smart/skilled people immigrate for better money and send remittances. English is still the international language, so there are a lot of service sector jobs that could be filled with a company like IBM and a tool called the internet. Manufacturing will come back, but in aggregate will not change GDP that much, just make factory-type workers relatively better off. There's still food, still coal, still pretty real estate that makes a nice cottage for a McDonald's manager in Portugal.
There's all kinds of floors like that to slow any fall. The biggest change will be closing of military bases, mothballing of ships, and reduction in military spending. Lockheed, United, Boeing, etc. will do fine selling to international customers just like what happened in Russia.
It would certainly be a notable and historical event, but people aren't going to be cannibalizing their dead neighbour because there's no fuel to truck in food.
Gold, Forex, other hedges against as US economic collapse are fine, but only in the interest of diversification. The most valuable thing would be what skills/trade/education you have that maintains or improves its relative value regardless of the circumstances
"The math and science geeks go for Windows laptops, but for the liberal arts majors and the media freaks, the CPU of choice is a MacBook."
This might suggest something about their ability to analyze cost:benefits.
I bought Macs for a decade until I realized PCs now do the same thing, and at a significantly lower price. Apple's core marketing strategy has endlessly pushed the notion they're "different" enough to warrant a premiumconsider their mockumercials with "PC guy". Perhaps it's just me, but I'm leery of paying extra for "feel good" products with little discernible advantage. And what gives with their iPhoneanother overpriced toy?
[INTC] Intel Q3 net income 35c vs 30c a share
not bad...
Can someone please explain gold to me?
You can't eat it. It won't keep you warm. To my knowledge it has no unique mfg capabilities. Why do you want it in bad times? It swould appear to be something of a medieval idea.
BelieverJeff
It has very little intrinsic value. But people perceive that it has value because of it's limited supply and the fact that it can't be artificially produced (in significant quantities).
This belief in the value of gold seems pretty stable and is something the government can't fundamentally destroy. If peoples attitude towards gold changed it could become worthless overnight, but so far that's something that doesn't seem likely to happen given it's long standing status throughout history.
It seems reasonable to expect that it provides some safe haven against the government blowing up the dollar and the financial system.
FWIW I don't own any.
rps, So the slave trend in females that goes on even as I type doesn't exist? I seem to have misplaced a few dozen reports on the sex slave trade from the last decade...like down at your local massage brothel.
You seem to have some blinders on somewhere.
Even in Western Europe right up through the enlightenment there were slaves of all colors. As a matter of fact, during the English Civil War some women were sold into slavery as punishment.
Not a pretty fact, but out there in reality.
Someday this war's gonna end...
Ever the eternal optimist eh?
Is that not how we got in this mess in the first place?
"Home prices can't go down"
"they're not making any more land"
"Here are a few good as cash investments"
To name but a few.
Being optimistic is fine unless you refuse to embrace the reality that always comes with it.
Key point that..
Ciao
MS
INTC let me guess, extraordinary item and lower tax rate?
Shnaps Wells Fargo advertising on CNBC in Canada -- all the freaking time.
Does Jp Morgan get to write down portion of Wamu buy out...Could this goose thier numbers tomorrow?
Pavel,
I stick with mp:
Don't Worry! Be Happy!
"And what gives with their iPhoneanother overpriced toy?"
Conjure and I will buy iPhones, just as soon as they include a built-in wine cooler and hot tub.
Just kidding, clearly gold is garbage. We're just fools whose heads are turned by shiny pretty things. Hairy knuckled unsophisticates.
INTC
Revenue 10.1 - 10.9bn Q4 est (vs Wall St 10.8 expect)
Gross margin 'coming in light' Q4 due to Atom cpu
Pavel Chichikov writes:
There is safety in community, and only in community.
Pavel Chichikov | 10.14.08 - 4:02 pm | #
And when too many dispute this the end has come.
"He seems to think that the buyers are people who have pulled money out of the banks and are now locking it up at home."
I too, have pulled $20K from my bank and hide it in a safe place.
Evil Henry
When the US defaults and we skilled people all go out emigrating in search of new work, do you think we should add a line to our resumes about our time spent posting on the CR discussion boards?
Hasn't Fulda noticed he's back in Belgium yet? Is this like the fantasy reports Eastern front commenders sent out towards the end?
I thought the monkey day-traded the market, leaving Nemo free to hit the refresh button.
And what gives with their iPhoneanother overpriced toy?
Perhaps. For me, it's an inferior substitute to a small laptop. I used to carry a $1K, 3lb laptop everywhere.
Now I carry a $200, 1lb phone everywhere and it does 50%+ of what I want.
Gold paranoia. In NYT 5 stories below ground, in bedrock, sits domestic and foreign gold. Gold is always buried to "protect" it. And thru the ages, is lost. Checkout all the ships that sank with gold buillion to the bottom of the seas, pirate coves, buried treasure back into the earth from whence it came. Gollums worship the bright shiny 'preciousssss" tricksy gold.
Can't eat gold. Life continues when you labor in the garden and store perishables for the winter.
Intel cuts 2008 spending outlook to $11.5 bln vs $11.7 bln
another $200 million out of the system next year...
Hasn't Fulda noticed he's back in Belgium yet? Is this like the fantasy reports Eastern front commenders sent out towards the end?
Fair Economist | Homepage | 10.14.08 - 4:26 pm | #
Once a country adopts the Deltmark, it becomes part of Greater Deltland. France has now been absorbed.
cd
JPM can and will take advantage of the virtually unlimited tax-writeoff holiday the (Paulson via the) IRS passed to enable Wells Fargo to buy Wachovia with more up front cash, for even more tax credits (Paulson had to excuse himself from Wachovia/Wells negotiations due to being friends with the Wachovia CEO who just left the Treasury a year earlier)
So JPM would be stupid not to accept the tax credits, although it might not be fully realized for a bit
Intel cuts 2008 spending outlook
Means how many jobs lost?
re: INTC
would love to see what they did with FOREX....never be broken out though.
and more importantly what exchange rate they are using since it's been all over the place lately.
Ciao
MS
"Is this like the fantasy reports Eastern front commenders sent out towards the end?"
Like this report?
YouTube - The Spiral - Part VI - Crescendo Partners
"FRED writes:
INTC let me guess, extraordinary item and lower tax rate?"
ok lower tax rate and lower share count. Good iold American quiality of earnings
Thanks Evil...up and away tomm...
"Pavel,
I stick with mp:
Don't Worry! Be Happy!"
I'm not deliriously optimistic. There's more than enough anxiety and suffering to go around. We may see hard times.
I just don't see law and order collapsing because of economic dislocation.
"He seems to think that the buyers are people who have pulled money out of the banks and are now locking it up at home."
As somebody with most of my wealth in dollars at the moment I still find the idea of seeking safety by locking away Federal Reserve Notes to be intensely amusing.
The only way to find safety holding IOUs for nothing is via information and mobility.
Gold doesn't replace labor
That is the whole idea of money that it replaces labor. Like for like. To replace gold requires labor. The problem with our money it is the promise of future labor (debt which carries interest) which needs to make enough profit to pay the interest. To pay back our current interest we need more debt since that is not created with the orignal money. Therefore we get a exponential curve of money that is created to continually pay back the interest. To stop growing means collapse of the Ponzi scheme. It does not seem sustainable to me. In the near future I expect gold to continue to outperform other forms of savings
For a more cogent explanation (they do not like gold either) Please see Money as debt
Google Videos Error
AP today:
Baghdad housing prices soar under sectarian shadow
"An arrow in central Baghdad points down a side-street to a glass door with a sign that reads: "Ali's Office." That's where real estate broker Hadi Abbas Ali has greeted clients for 25 years. Now Ali is witnessing a boom of sorts in the Iraqi capital, where real estate prices have doubled in some areas.
But a sectarian shadow hangs over the boom. Buyers don't look for a river view or simply the best deal in town. Safety-conscious Shiites seek housing in walled-in areas dominated by their sect, and Sunnis stick to their own as well.
With little new construction afoot, there are far more buyers or renters than available homes in places like Karradah, a mostly Shiite area where Ali is hard-pressed to shrink his waiting list.
"The business in the area is not so good now because there is high demand but not much supply," said Ali, dressed sharply in a jacket and pressed trousers. He noted that the monthly rent for a two-room apartment in Karradah, where attacks still occur, is about $400, double the price in 2006."
OK everyone...now you know where to invest the cash you took out of the stock market last week. Toll Bros will be on this like stink on a warthog.
Intel cuts 2008 spending outlook to $11.5 bln vs $11.7 bln
Well, the gamer and enthusiast sales are going to be a LOT lower this Christmas season, i.e. much lower Gross margins.
DNA beats but lowers year view to low end.
.68 vs. .64 EPS
That'll leave a mark in the morning...the lowered guidance.
Ciao
MS
Historically, what happens to home prices during a period of high inflation? What happened in the early 80s?
Enjoyed his book, if you live with stochastic processes in any professional fashion it had to make you think...
Taleb's `Black Swan' Investors Post Gains as Markets Take Dive
By Stephanie Baker
Oct. 14 (Bloomberg) -- Investors advised by ``Black Swan'' author Nassim Taleb have gained 50 percent or more this year as his strategies for navigating big swings in share prices paid off amid the worst stock market in seven decades.
Universa Investments LP, the Santa Monica, California-based firm where Taleb is an adviser, has about $1 billion in accounts managed to hedge clients against big moves in financial markets. Returns for the year through Oct. 10 ranged as high as 110 percent, according to investor documents. The Standard & Poor's 500 Index lost 39 percent in the same period.
Taleb’s Universa Bets on Black Swan Deflation, Hyperinflation - Bloomberg.com
9%? Really? Not to sound insensitive, but thats not so bad.
I'm expecting 12-14% unemployment for the next four years and the emergence of a massive welfare state in most Western economies.
"Not a pretty fact, but out there in reality."
New reality Citizen AllenM, the NWO game plan is to enslave all of us. What are you worth? Male domination just ain't working out for the rest of us.
Mac v. PC:
The UCLA bookstore is inundated with buyers waiting for the new Macbook announced this morning. My eldest is authorized to buy the expensive one. When anything with Vista can generate that excitement get back to me.
Pavel Chichikov writes:
"People don't seem to grasp just how close we came to toppling the Federal government in 1932 during the Bonus Marches."
From what I've read, these people had no intention of toppling anything.
You need to read more. These were armed people schooled in the art of war camped on the steps of the Capitol. We aren't there yet and this time will be different but it is folly even the current administration is not ignoring.
I'm with everyone here, trying to figure out what will hold value.
I'm starting to think that solar panels might be a really good investment, as a hedge against both inflation and social instability, at least for those living in sunny climates. It's tough to outcompete the "government regulated" utilities, but having a "subsistence" amount of independent production could be valuable in a crisis. Roof-mounted solar ties you to your home, which is a bad risk right now, but a standalone system might make sense...
"In an extreme case one of those pieces could go a long way towards saving you or one of your family member's life."
I must admit that I find these predictions of a secular apocalypse a bit annoying. There has never been a state of general anarchy and lawlessness in this country. I don't expect to see one because I don't see any reason why it should happen - saving a severe global natural disaster or world war. Not for any economic reason, though.
Um...you have heard of the War Between the States, haven't you? (Nothing "civil" about it, as my great grandmother used to say.) Great stretches of the South in particular were most definitely in a "state of general anarchy and lawlessness."
Your roots must lie north of the Mason-Dixon line...
MS,
Did you catch the bleed out by AMZN? Guess the Kindle ain't the next Ipod...
(full disclosure I own neither but hear good things about both lol)
EvilHenryPaulson -
From what I understand, there's a 2% origination fee on the most popular form of FHA-insured reverse mortgage. What's not to like if you're Wells Fargo?
But what does Abbey Cohen think???
crispy& cole | Homepage | 10.14.08 - 4:03 pm | #
Glad you asked. My analysis shows the S&P 500 at 1550 by the end of the year. I raised S&P earnings from my earlier prediction, as I've become more bullish as this credit crisis continues and job losses mount. Fred Hickey says I'm crazy, but what does he know? He doesn't even have an office on Wall Street.
@NotOneCent...do a search on "Jeffrey Gardner". He's a former Kissinger planner and friend to Paulson.
If they're trying for One World Currency contolled by Fed, then this drop was just the start.
btw
thanks CR for posting this
great interview
The IMF estimated a total of $1.4 Trillion in writedowns after a very detailed study where they took into account (much) lower future house prices. The 3 Trillion of Roubini seems quite an overestimate. Of course there is still a lot of shit to come, but if one considers the speed of deleveraging/decreasing house prices/bank nationalizations and recapitalizations/worldwide government actions, it is not too strange to state that the problems in the financial will be "solved" quite soon (max half a year). The majority of the problems for the real economy is still ahead and this can indeed take a few years to normalize.
The point I want to make =>
There were numerous people like Roubini who have been predicting this crisis for years. They turned out to be very right, but it seems now that people are talking each other down the drain. As always, exaggeration happens both ways...
"Um...you have heard of the War Between the States, haven't you?"
Was it caused by a financial breakdown? I did mention war as a possible reason for civil anarchy.
Historically, what happens to home prices during a period of high inflation? What happened in the early 80s?
Real estate being generally a commodity would reflect inflation. House prices would generally rise, hence the appeal of inflationary solutions to the current problems.
We still haven't gotten to the point we did after the Depression where rising prices actually caused panic because of fears they were the harbinger of another depression.
If they're trying for One World Currency contolled by Fed, then this drop was just the start.
Probationary junior non-voting membership at most.
energy-
recall the "upgrade" by the C analyst as exactly that...kindle=Ipod.
I gather Legg Mason dumped quite a bit on that little pump upwards.
I have to admit that I have a short in AMZN made in late '05...I still have it. Watched it go to 100 and never gave it up. I WILL make $$ on them...don't care if it's just a few pennies but I will.
Ciao
MS
Soon we'll stop the following the CDS market and Bank Failure Friday, and start tuning into
and the Mass Layoff reports
Unemployment
New World Order, Robots running amuck, cats and dogs living together
MS,
True grit!
"That is the whole idea of money that it replaces labor."
I respectfully disagree. If we all are holding "money" what can you buy if labor doesn't exist? Who's gonna make your Sstarbuck frappacino? Money is a conduit of earned labor to purchase and provide labor to other sectors of an working economy
As for the warriors camped on the Capitol steps, the government had no cause for anxiety about them, as events proved.
I don't think there will be a people's putsch in the US.
RobDawg
What you say about the Bonus Marchers in 1932 is not correct. Pavel's assessment is spot on.
our government seems to think that we will run amok otherwise why homeland brigrard?
Pavel Chichikov writes:
"Um...you have heard of the War Between the States, haven't you?"
Was it caused by a financial breakdown? I did mention war as a possible reason for civil anarchy.
You really need to read more. The power shift from the agrarian states to the manufacturing states were the specific economic reasons for the South excercising their Constitutional Right of succession. The shift in power was already so solid that the North decided the Constitution was not as important as their access to raw resources. Think oil.
The civil discord came first the dissolution second.
RobDawg
What you say about the Bonus Marchers in 1932 is not correct. Pavel's assessment is spot on.
joe shmoe
Thanks for that searing refutation.
Gaps get filled....the gap in late april '07 is just about to be filled.
I told my wife that you will have to pry those from my cold dead hands in order for me to allow them to take my money. The last earnings report was just too precious...putting in money made from an asset sale into the operations bucket. They got away with it though.
Amzn is just a hedge fund that happens to be a retailer.
Ciao
MS
Anybody familiar with how well purchasing Precious Metal coins through my broker(Morgan Stanley) works? According to him, I am able to purchase 1 Oz American Eagle Gold Coins from Morgan Stanley, subject to a $5K Minimum, and a Delivery Charge of $75. He said that the only delay is roughly the 2 weeks for delivery time.
I'm waiting to hear back from him regarding a quote. Should I expect something close to Spot price? Should I expect there to be a delay, since the U.S. Mint is not taking orders?
Hoping someone here is familiar with this type of PM purchase through a broker, because according to him, I'm the only one who has even inquired about such an arrangement.
"That is the whole idea of money that it replaces labor."
I respectfully disagree. If we all are holding "money" what can you buy if labor doesn't exist? Who's gonna make your Sstarbuck frappacino? Money is a conduit of earned labor to purchase and provide labor to other sectors of an working economy
rps
I would refine the original statement:
"The whole idea behind money is a shared belief that there is some convenient representation of labor that can be held in its stead."
As long as that shared belief remains in tact then the money continues to function as a convenient form of "storing" wealth/labor (assuming a functioning economy).
But money is not these things and if this shared belief collapses for whatever reason, or if the economy collapse, then the money loses it's value.
I think the answer to your question is that the US is a medieval place: torture, loose talk about crusades, throwing people into dungeons, direct lines to god.
The direct lines to god keep the people chewing their cud rather than noticing the repo man leaving in the SUV, the house being trashed out by the bank, the 401K seen entering a hotel room with a lothario named Hank.
This might be a good time to observe that most US TV sets will stop working in February when analog broadcasts cease and the good little consumer-soldiers must either buy a digital TV or a set-top converter box.
That'll jumpstart the economy. Or something.
Scared-
Find a local dealer......don't go with a major as they WILL screw you. Just do a Google search in your area.
Much less hassle IMO.
Ciao
MS
"You really need to read more. The power shift from the agrarian states to the manufacturing states were the specific economic reasons for the South excercising their Constitutional Right of succession."
I always need to read more, Rob. But let's agree to disagree on this one. Parts of the South were a theater of war, subject to military jurisdiction. The closest the North came to an anarchic uprising were the draft riots in New York, which were put down handily when crack military units arrived on the scene. But the causes of the riots did not include financial breakdown.
Rob Dawg
How much detail do you want? I'm mostly limited by time.
The Bonus Marchers in 1932 were WWI Vets who wanted bonus bonds due to mature in 1945 to be paid off early. DC police shot two of them. Police shot first. Then Hoover called in the Army, legal to do in DC because DC is directly governed by Congress. In other places it would have transgressed the Posse Comitatus Act. MacArthur was in command, Patton under him. When the Army arrived, the Bonus Marchers (really squatters, in a Hooverville) first thought that the Army was there to endorse their appeal. They learned otherwise when charged with bayonets and gassed.
Now, would you also like me to explain exactly why your take on the onset of the Civil War is far from the reality?
You do know what I do, don't you?
UCLA bookstore is inundated with buyers waiting for the new Macbook
Yes, Jobs is a marketing genius - no argument there. I wonder how many of those computers will be paid for with student loans.
Anecdotal:
Dentist's office just called; they are postponing my appointment because the rest of their appointments for tomorrow cancelled. Everyone says because of the economy they can't afford to get their teeth cleaned.
The kicker? This is the SECOND time they've had to postpone. (But they seem to be booked up ahead, albeit on reduced hours.)
unemployment to 9 percent
....
You might want to check out U-6 unemployment numbers which are far more comparable to the unemployment numbers during the great depression
BushCo has demonstrated that they can and will manipulate statistics that people have depended upon for decades.
Anybody who thinks we get out of this with less than 10% unemployment hasn't thought this through.
Without a major new growth industry (alternative energy? - which will be fought tooth and nail) and major public infrastructure investment (also fought tooth and nail by conservatives), there is nothing to replace all the other loses in jobs.
Oh, and the financial services industry will experience a pogram in job as people realize that there is no there there. (The only positive).
MS writes:
Scared-
Find a local dealer......don't go with a major as they WILL screw you
Really? In terms of price? I have a long relationship with my broker, so I am wondering in what way you think I could get "screwed."
You claimed "The has never been a state of general anarchy and lawlessness in this country." Without qualification.
And it's not true.
You also mentioned "world" war as a possible cause. This war was completely domestically generated. (And yes, economics were a bigger factor in its origins than sometimes acknowledged.)
wisdom-
I guess we'll be just like England faster than we thought....
Ciao
MS
"Find a local dealer......don't go with a major as they WILL screw you"
How do you find a local dealer? I won't go heavily into gold, but 10% of my savings may be worthwhile.
"Really? In terms of price? I have a long relationship with my broker, so I am wondering in what way you think I could get "screwed."
Do you want to put in $5k minimum??
If not then you are being given not much of a choice....that equates to being screwed in my book.
They should have no minimum....something fishy going on with that.
Find a place to buy what you want and not one that dictates what your minimum is.
Ciao
MS
If you haven't caught Kevin de Bruxelles' delicious satire in an earlier thread, don't miss it (and no, I'm not the Kev):
HaloScan.com - Comments
Fink,
You know someone who doesn't have cable or satellite?
It is hard find physical gold anymore, you can buy it but getting it in hand isn't easy.. Expect to pay more then market price 10% to 15% more. Cash and carry.
Excellent post, JimPortlandOR.
- college will be unaffordable and millions of 18-22 yo's will be on the streets
Going to be hard to find begging space at PDX's Pioneer Square, no?
Rob Dawg, have you seen pictures of the bonus encapmments? The participants don't look very frightening. The fact that MacArthur was easily able to make them scatter with a couple of rounds of teargas (killing an asthmatic child) and a bayonette charge makes it rather hard to buy the idea the protesters were threatening the republic.
I mean come on, have you ever seen riots in S. Korea or France? Absolutely insane looking to an American, yet the Koreans take lunch breaks. The bonus riots were really minor league. Protests have to be huge to overthrow an efficient government.
By the way, for all the goldbugs out there...aren't gold coins and bullion as well as gold futures considered a collectible by the IRS (hence subject to 28% capital gains tax if held for more than one year) ?
That there's some nasty confiscation, kids.
Able was I ere I saw your post, Alba.
US cable penetration is somewhat less than porntastic; recession will make it droop.
"You claimed "The has never been a state of general anarchy and lawlessness in this country." Without qualification.
And it's not true."
Whatever you say. But general anarchy, to me, means the whole country is in a state of lawless turmoil. That's very rare.
I was in Moscow the year the SU collapsed. I didn't see holdups in the streets or people's throats being cut. There were paratroopers on patrol for a while, and once there were main battle tanks parked along certain streets. But no anarchy, not even in Moscow, and the rest of the country was calm.
As always, the police were omnipresent, as they always are in Russia, including paramilitary OMON. No one messes with OMON.
I know that people in the countryside had plenty to eat - by Russian standards.
Life went on, and no doubt it will go on here, barring some unforeseen universal catastrophe.
dunno scooby but how can you tax something you already own and have not sold?
ciao
MS
Builder Bob writes:
Its seriously worrisome how reliably the market has been going positive at 3 pm lately. Is it really blatant manipulation?
Builder Bob | 10.14.08 - 3:16 pm | #
There are secular reasons why this might occur sometimes. You're right that the reliability is a bit weird.
Mutual funds usually only buy/sell redemptions at the end of the day, for instance. Any kind of correlated redemption activity would tend to drive the closing numbers one direction or the other. Anyone with visibility into how that was going to break could "get there first" by buying a half-hour ahead of time and front-running the redemptions. Mutual fund holders get worse prices in this scenario because they are not free to use limit orders and specify their price.
I agree, it's been happening often enough that it makes you wonder. But there doesn't have to be any active conspiracy to create the effect.
And the best one yet today...
"Government's role will be limited and temporary"...GWB
Limited and temporary, as opposed to the rest of all the options on the table... including pushing the button.
yea, it's all a matter of perspective isn't it?