Okay, everyone look at the bright sparkly lights...waiting for the rug to be pulled out. I guess I am officially in denial. All of this smells of one last hail mary attempt.
The only way I see that forecast happening is that a major worldwide resource war kicks up and similar to 1939-1940, we become the world's arms dealer.
Does it really matter if it feels like a DEPRESSION to most of the population? Who cares if the bankers get back to their bonuses (see GS) if the rest of us are fighting 16.5% unemployment (counting everyone).
I found this forecast amazing. They are forecasting a robust recovery in 2010 (above the growth rate of potential GDP - so probably in the 3.5% to 4.5% GDP range), declining unemployment, and little inflation. Nirvana.
I've never seen a robust recovery without housing and consumer spending leading the way ... hmmm.
I must have missed their forecast for the recession we are "leaving". Since their economic forecasts have been so accurate over the last 10 years I guess we should be paying a lot of attention to what the Fed has to say.
(2011-2012): that real GDP would expand at a rate well above that of its potential, that the unemployment rate would decline significantly, and that overall and core personal consumption expenditures inflation would stay low.
Okay, I am no architect of stable economic societies...but something tells me that a lot of unemployed people aren't going to cheer a recovering economy that pays more money in bonuses than a 'middle class normal guy' sees in a lifetime. Again, how is a jobless recovery good for America? The key to this whole situation will be when Goldman Sachs announces it is relocating to somewhere abroad. Then the yellow brick road will make sense...
Crispy - agree that it never was going to look like the 1930's b/c of the (limited) social safety net in place. But what % of folks are un/underemployed, locked in a declining standard of living due to debt service, with no prospects of thriving in whatever industries will grow in the future (bioscience, green tech, blah blah blah). More to the point - even if the cliff diving is done, what is going to lead to future prosperity?
One thing difference from the '30s is the student loan program. Pretty much everyone I know from the US in real estate development is headed back to school to do something else.
"In price, that's a 2$ loss in a week for the suckers who bought at the auction."
If this is happening week after week then perhaps it's more than being a sucker? When you hitch your export based economy to a faltering consumer based economy then that doesn't leave you much choice. Of course you could just unhitch and have a civil war instead.
Hal Incandenza -
"agree that it never was going to look like the 1930's b/c of the (limited) social safety net in place" - yes, along with the flood of money, it was obvious from the beginning this would never occur.
The poor and middle class have been killed in this country since the Reagan Revolution and Contract w/ America. Just keep giving them their circus and bread (cable and fast food) and they will take it....
I've heard about that - they're all going to become nurses and dental hygienists and xray techs. Too bad no one has health insurance to pay for all of those services. Try again!
The alchemy of deficit finance will make the economy look better for about the next year. It's an illusion, and the cost will be another trillion or so of debt tied around everyone's neck. GDP numbers from Q3/09 - Q3/10 should be positive though. The Fed is low on it's unemployment forecast too. 10%+ is coming soon and will persist for years. 10%+ unemployment for a prolonged period of time is one definition of a depression.
There is a difference between a projection and a prediction. Many's the time I've sat through a meeting in which we made plans based on projections that everyone in the room knew were utter BS but which we were forced to use for reasons of corporate politics (usually because the CFO had presented the figures to analysts and shareholders in a desperate attempt to maintain expectations).
"The poor and middle class have been killed in this country since the Reagan Revolution and Contract w/ America. Just keep giving them their circus and bread (cable and fast food) and they will take it.... "
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"If this is happening week after week then perhaps it's more than being a sucker?"
Oh, it isn't the Chinese buying the 10 year. They are still buying, but in the short end.
Who could it be, then? Who has been given a ton of money by BB at zero interest rates, and have no viable private sector places to park that money? Who was bailed out by the government? What strings were attached to that bailout money?
Crispy - I've been trying to make the point to my parents for years that our standard of living is going down, not up. My Mom, a smart, professional lady, has always countered that I was wrong b/c she can afford to fly cross-country and has an HDTV. Nevermind that there's no pension and it takes 2+ incomes to make it work.
oh well. i guess we're all wrong. time to go long. it's worth noting that very few, if any, of the doomsday prognostications proffered on this board have come to pass.
I was thinking about appointing a few PBS people to Czar positions, Like Barney or a committee composed of Sesame street Tele Tubbies, Thomas the tank engine! I don't think They could do any worse.
Of course they're going to cheerlead and sweep everything under the carpet. If public opinion gets too negative and people start to panic, the end is near.
That's the only rational way I can make sense of the new green shoots economy. I'm starting to think they don't really want this ship to sink either.
I know a guy with no pension but -- he thought -- sufficient savings for a long and plush retirement. Well, now his retirement fund has shrunk enough that, he says, he is probably going to outlive it. But he and his wife still takes a couple of big trips a year (and several other small ones). Now he's all pissed because he has to have surgery this summer (he's got Medigap, no prob) and he'll miss his usual summer cottage on Cape Cod. Responsible guy all his life, too, former engineer. (Add for those who care -- not a boomer, older than that.)
Of course they're going to cheerlead and sweep everything under the carpet. If public opinion gets too negative and people start to panic, the end is near. - Outsider
Last September, the world looked into the existential abyss, and completely freaked out. This will not be allowed to happen again.
I'm calling BS on the "no doomsday prognostications have come to pass" call. What do you call a 60% drop in the S&P? Who gives a crap that Tim&Ben are pumping it now - most folks would call it a crash, and have been. What do you call 60-70% home price declines?
The only people wrong about a doomsday scenario are the ones stocking up on ammo and dry goods. And they could be just "not right yet."
Well, will someone please explain this quote from LAST WEEK.
Summers says the recession has a long way to go and the worst is still ahead. Summers says: "I don't think the worst is over ... It's very likely that more jobs will be lost. It would not be surprising if GDP has not yet reached its low. What does appear to be true is that the sense of panic in the markets and freefall in the economy has subsided and one does not have the sense of a situation as out of control as a few months ago."
OTOH, the CNBC shill on the last thread specifically attacked the doomer blogs and "bitter bloggers." Which shows that blogs like CR are actually having an effect, and are something of a threat. You all should take some pride in that.
"ghostface, are you the reason I'm going to be paying more at the pump tomorrow? I don't appreciate that. "
Ah, no, you can blame Bernanke for that.
I doubt my buying is making a difference, but there are plenty more like me who see that all this money creation is going to lead to a currency collapse (relative to real assets, not other BS fiat currencies).
"Of course they're safe. There's absolutely no doubt about that. They are as strong, solid and as safe as any other building method in this country provided of course people believe in them."
Maybe they know the game is up and they are going all in on the bluff recovery....I am though utterly amazed at the strength of the market this year....stunning
I'm starting to think they don't really want this ship to sink either.
I think that was always clear, especially if you watched Greenspan closely.
It's never been about the Federal Reserve "robbing the country".
The Feds know their history, they know Henry Ford.
I suspect that they didn't know about the 60-to-48-hour-week transition from 1873-1896, because I only dug that out from reading through several source materials that were contemporary to the time and I've never seen it mentioned in modern studies.
I'm think the percentage bet is Harry Dent.
We get another recession in 2011-2013.
" it's worth noting that very few, if any, of the doomsday prognostications proffered on this board have come to pass. "
It would be worth listing which ones you mean. People have different measures of doom.
Widescale housing declines would count for some folks measure of doom, and it seemed inconceivable that national declines could occur. Yet they have.
Possibly the only thing that could save America at this point would be to renounce the "free-trade" mantra, slap a 20% or more duty on EVERYTHING that is imported and a 20% tax on the foreign operations of US companies. Then we'd see manufacturing start to relocate back here.
But our current system of "free-trade" is like a religion. We can't talk about it's failings. We can't consider alternatives. Consider GM. They received massive government bailouts and a cushy government-greased bankruptcy. What are their future plans? To build more cars in Brazil and China! Big business is multi-national. Their loyalty is to profits not to this country.
It's strange to think about how isolationist the USA was before WWII. But after the war we embraced endless global entanglements. Unless we can return to some form of self-sufficiency we are on an unstoppable path to ruin. The new America will be built on the Latin American model with 10% rich, 20% middle class and 70% poor. The shift from middle-class to poor is the name of the pain that the 50% in the middle are feeling right now.
I'm not sure those are entirely inconsistent with one another. The FOMC didn't project rising unemployment and GDP from here, they projected it from year end. If the second half is really, really catastrophic we could easily have much lower GDP and higher unemployment and still meet the FOMC's projections for next year.
Personally, I'm discounting the Mad Max, guns and ammo, burning cities stuff. My model is Portland, as it is now, sort of squeaking by on handouts, a basement flop, beans, and peanut butter. Not terribly exciting from a literary POV.
Dateline March 12, 2011. Place: US Congress. Fed Chair getting interviewed by ornery congresscritters about how their forecasts didn't play out. "Sir, nobody could have possibly forseen that unemployment conditions would have continued to deteriorate, leading to additional foreclosures and a double-dip recession."
Consider GM can profit these other countries with out UAW baggage. They still send the profits home to prop up what is left of GM and pay the UAW legacy cost and the US get tax money. I wonder why Ford or GM Corporate has hung around here?
I'm sticking with my doomsday forecast for CA. 40% more drop in home prices. Unemployment peaking at 14-15%, tons of people leaving, riots, looting, arson, national guard.
"Of course they're going to cheerlead and sweep everything under the carpet. If public opinion gets too negative and people start to panic, the end is near. -"
You should read "The Creature From Jekyll Island", there is a chapter near the end called "The Pessimistic Scenario" where the author calls this scenario pretty well.
I quote:
"It is now seven weeks later. Something happened, but no one knows what. Like a spark igniting a twig, spreading to a branch, and then engulfing the entire forest, the public has panicked. Responding to a primitive herd instinct, they are descending on the banks and thrifts. They want their money. They want their savings.
Perhaps it was the newly released statistics showing higher unemployment, or the continued rise in bankruptcies, or the Congressional vote to increase the national debt again, or the jump in Social Security taxes, or the loss of another 140,000 jobs to Mexico, or the riots in Chicago and Detroit for more food stamps and government housing, or the presence of UN 'Peacekeeping' troops to augment the National Guard, or the rumor that Bank of America was technically insolvent, or the UN World Court ruling that the number of American automobiles had to be cut by 30% by December 31st, or the skeptical tone in the voice of the CBS news anchor as he quoted the latest prediction of renewed prosperity.
Whatever it was, there are now long lines of sober-faced depositors outside every bank...
Spokesmen from the Treasury and the Federal Reserve appear on TV and assure the nation that there is no need for panic. Everything is under control. The only problem is the irrational behavior of alarmists who have no faith in their country.
They still send the profits home to prop up what is left of GM and pay the UAW legacy cost and the US get tax money.
Repatriated earnings get taxed at 35%, which is why the money will stay overseas to finance expansion. it also explains why BigPharma and Silicon Valley has had to issue a lot of debt recently.
A friend just sent an email and told me to tell all of you that everything is alright and a man in a bright white jacket would show up soon with some 'happy' medicine. So stay nice and calm and everything will make sense soon. Also the big needle doesn't hurt a bit.
Your comment about the cat in a hat shirt and googly ball eyeglasses while sitting in a shutdown the office meeting got me to reminiscing on the last biotech I worked at.
At the end we were a whole building, most of the cubes torn down and about 8 of us left helping to shutdown the company. You could literally play soccer inside the building it was so large and so empty. We were in the process of moving all the equipment (dna scanners, computers etc..) out into a garage area so that the VC companies could repossess everything. We had to move everything through the lab area which was right in front of the board room. They were still meeting sometimes with VC firms trying to drum up some cash. My boss was the head of IT and Biotech at that point and still met occasionally with VC and upper management to give an overview of everything.
On the way back from the garage I decided to give him a ride on the trolley. Bad idea. Turns out the door to the board-room was open and there was a VC meeting going on. We go flying by at full speed, the head of IT/Biotech with arms outstretched like in the movie Titanic screaming "wheeee!!!"
Sadly we didn't get any more funding. Not bad though, the company blew through a couple of hundred million of VC funding before shutting down. The sad thing was that by that time we actually had a genetic test that had passed the FDA regulatory hurdles. And it worked very well.
Possibly the only thing that could save America at this point would be to renounce the "free-trade" mantra, slap a 20% or more duty on EVERYTHING that is imported and a 20% tax on the foreign operations of US companies. Then we'd see manufacturing start to relocate back here.
No, I don't think that would work. A lot of our parts are made overseas, etc. Our markets are already intertwined. To cut off foreign trade would result in massive job losses on our shores too. Not to mention foreign countries are funding our debt as it is.
haha - except I'm not playing this market at all. I'm just not happy w/ sky high equities prices based on well, thin air. - burn
I can't be so sanguine-- my money is in cash, American cash, and it's getting chewed up by inflation and low returns. Play the market, or don't play, scrood either way.
At some point taxes will be collected in theory but you may be right. Right now these markets have buyers and the investment is needed. Proves the fact the US consumer has no buying power and won't for a long time. Neither does Europe, that is why they dumped Saab and Opel/Vaxhaul. Never an mention of Australia, China, Korea, Brazil operations for sale either. After the blip of presale from the cash for clunkers runs out what next? The long hard slug will bring them right back down.
"Also, no fear of inflation despite a promise to remain stimulative in a period of projected above potential growth."
One irony is, a rising stock market alone is inflationary - P/E expansion is nothing more than money creation. As people borrow against this new wealth, the effect multiplies.
Which is why the Fed will try to manipulate the markets in both directions. They want "Goldilocks". If things heat up now, with no underlying strength in the economy, it will be just as bad as a depression.
Also, the more people swing from the fear of deflation to the fear of inflation, the more scrutiny the Fed gets.
That exists in lots of places in the world. Yeah, there is some light rioting, but not much."
But Americans don't view themselves as living in "lots of places". High unemployment is viewed as a weakness to Americans, they won't stand for it as long as the French.
Also, without universal healthcare, they can't stand for it.
Protectionism will be back, and in a big way, sooner than you think. - WWNM
I can't see it. Foreigners own too much stuff in America, and we own a lot of stuff overseas. And most big corporations are multinationals, too. Protectionism is Mutual Assured Destruction for too many important players, who have money to buy Congress, and the courts. That deck is stacked.
" slap a 20% or more duty on EVERYTHING that is imported and a 20% tax on the foreign operations of US companies."
Can you give us Canadians back 20% on the locked in undermarket rates you're getting on water and natural resources as part of NAFTA as part of the bargain. And if you could also throw in again allowing us to offer tax-credits to smoke-stack polluters like were able to do before NAFTA I'd be much obliged as well. Also pretty please let us drop the requirement that is part of NAFTA that we cannot stop selling water to the US EVEN if we run dry in Canada.
The "Mad Max" thing has always been floating about but never been a serious prediction. OTOH, I stand by my depression call, and that's based upon continued economic contraction, higher persistent unemployment, and overall deflation. As many have noted, there's no sector poised to lead us out and many still pushing us further in; and no, government can't do anything beneficial about that.
We have yet to see the bottom in the markets, housing, employment, CRE, etc. Should be plenty of fun ahead (sarcastically speaking, of course).
I can't be so sanguine-- my money is in cash, American cash, and it's getting chewed up by inflation and low returns. Play the market, or don't play, scrood either way.
If I had cash lying around and I were wondering what to do with it (which is not the case, unfortunately), here is what I'd do. I'd pay off all of my debt, Everything. Then I'd pay any expenses forward that I could. After that I'd buy everything that I might be absolutely needing in the near future - whether it's clothes or food or whatever. I'd learn how to do as much self-sufficient stuff as I could. I'd perfect my food growing techniques. I'd practice living on as litlte as I could. If I needed to, I'd buy some land.
And if I still had cash after that, I'd throw a big party and invite everyone. And make sure I helped whoever I could.
And then I'd put the rest in diversified places and forget about it.
Totally agree with Ghost on the book.....be prepared to devote some time to it..it's fairly long.
the Pessimistic scenario at the end is playing out as it's pretty spot on.....we just need that little part about panic with the depositor base (which seems unlikely at this point) because it's still being *ss-reamed by "hope".
What do you want to bet that we'll get those much anticipated bank-holiday's but it will be because of swine flu or some other manufactured "event".
I am not the smartest one here. So I decided to make a list. A pro v. con of economic nirvana.
Pro
The banking system is no longer going collapse
Unemployment, just like housing prices can not continue to rise forever.
Consumer spending can not drop much lower - people will replace items at a minimum
We still manufacture and can sell enough just in NA to provide jobs
Con
The banking system still has to survive CC problems, housing, and CRE
Unemployment will continue to rise and spinoff all kinds of bad things
Consumer spending will not drive the economy again for at least a generation
We don't make anything that anyone needs
That’s an interesting way to think about what has happened — and it also suggests a startling conclusion: namely, government deficits, mainly the result of automatic stabilizers rather than discretionary policy, are the only thing that has saved us from a second Great Depression.
TJ, I disagree. I'm genuinely curious what doomster predictions they believe have been wrong.
btw: THe downfall (imho) of hbb was that there were 50 posters saying the exact same thing every day.
Yes there was a housing crash, and yes hbb/ben was on top of it. But the blog stopped being useful because nothing else got fleshed out.
And I note: An honest-to-god prediction registration site would be very useful.
So now we have a "shitload" of companies who find themselves in a "new normal" economy with more factories, offices, employees, etc than they can ever use and more debt than they can ever pay back. Expect the recurrent theme for years to come to be "Recession is over"....only it won't be.
"Krugman's obviously drinking the same primo koolaid they serve at the FOMC. "
'
The 2008 vintage got bad reviews but the 2009 vintage is stellar apparently. Very smooth with hints of something green rolling off the tongue and a slight manure after taste.
The way I see it is, that the staff must smoke some killer weed. Somewhere along the line of "chronic wheelchair weed". There is no other rational explanation for their arguments. I bet they smell like skunks.
I'd pay off all of my debt, Everything. Then I'd pay any expenses forward that I could. After that I'd buy everything that I might be absolutely needing in the near future - whether it's clothes or food or whatever. I'd learn how to do as much self-sufficient stuff as I could. I'd perfect my food growing techniques. I'd practice living on as litlte as I could. If I needed to, I'd buy some land.- Outsider
Aw, hon, it just doesn't quite work that way. I don't have any debt, other than the mortgage, and if I paid that off, I'd be placing a bet on the future of the local housing market, tying up a large chunk of change in an illiquid asset. And that's more uncertain than the stock market, IMO. Buying stuff ahead of time presumes a lot of storage space, and you have to pay for that, either renting or owning. Becoming 'self-sufficient' food wise also presumes you're buying or renting land, unless you can get a community garden patch.
In any case, food is not the big ticket-- it's medical care. And that's thousands of dollars a year, or go without. As I get older, I see that's the difference between a comfortable retirement and poverty. It only takes one bout with cancer, God forbid, to bankrupt you, even if you have a stash of cash. That's why I will be retiring outside the U.S.
Next Congressional session in December will, among several big items, include a major inquiry by Senator Glass concerning banking in general and the role of Federal Reserve credit in speculation;
Bulls encouraged by recent rally and technical indicators of strength. Buy orders accumulated over the weekend, leading to an opening rally with new rally highs for many major stocks. Speculative issues were particularly active. Oils, food, amusement, communication, utilities, banks strong. Most stocks closed at daily highs.
Good signs seen in rise in life insurance sales and bank deposits vs. 1929.
Leading traders seen buying; "They are picking out stocks strong in intrinsic value, with potentialities of a quick comeback when business returns to normal."
Auto industry successful in reducing inventories by drastically cutting production.
May freight traffic on class 1 rails was 36.6B net ton miles, down 12.8% from 1929 and down 6.8% from 1928.
A&P first-half sales $548M, up 8% from 1929; June sales also up 8% from 1929. Remodeling stores to attract "that part of the public that patronizes better shopping districts and demands unusual varieties and costly delicacies."
Sheesh makes me damn lucky that I sold SZCSH (july Spy Puts) at $1.27 last week....now only if I loaded up on SWGGN at .13 on Friday...can't win them all I guess.
......geeze..........what the Hell happened? I see I missed another "Recovery" - Well, It's not so much whether you think the game is "fixed", but whether you buy a ticket to it..........Seems a lot of people are "buying" according to Mr. Market.
WASHINGTON (MarketWatch) - Former Treasury Secretary Henry Paulson is planning to defend his involvement in Bank of America's controversial acquisition of Merrill Lynch, saying Bank of America had no legal basis to cancel the transaction.
"It would be unthinkable for Bank of America to take this destructive action for which there was no reasonable legal basis and which would show a lack of judgment," Paulson said in a copy of testimony obtained by MarketWatch.
Paulson is scheduled to testify Thursday before the House Oversight and Investigations Committee about the Treasury's role in the deal.
Fed-up
goose the market with more golden eggs....
Okay, everyone look at the bright sparkly lights...waiting for the rug to be pulled out. I guess I am officially in denial. All of this smells of one last hail mary attempt.
Follow the yellow brick road......
FOMC = Idiots who never get anything correct
I am not a bull or bear, but Immaculate recovery? No way!
Which sectors will lead us out? If you cannot answer you are making up any predictions of recovery.
Can we have a running quotefest if Fed predictions? Seems to me this is recycled from 2007, 2008 and earlier this year with just the dates pushed out.
Did they mention the subprime problem would be contained, too?
Rob Dawg-
The sectors are the following:
The only way I see that forecast happening is that a major worldwide resource war kicks up and similar to 1939-1940, we become the world's arms dealer.
Did they mention when I would get a raise? Or a higher paying job?
Stock market rallying on this...shorts getting taken out and shot...
Does it really matter if it feels like a DEPRESSION to most of the population? Who cares if the bankers get back to their bonuses (see GS) if the rest of us are fighting 16.5% unemployment (counting everyone).
Wow! this must be a Olympic event. Synchronized BS, Germany on 7-13-09 claimed first gold followed by the USA silver and bronze to be determined!
Server-Fehler 500: Interner Fehler - SPIEGEL ONLINE - Nachrichten
Which sectors will lead us out?
Guns & Ammo?
About that 900 target for the S&P, sure it isn't 1000?
On a wing a prayer........whoooo could it beeeeeee? Believe it or not, it's just meeeeeeeeeee.......
When can we start flipping houses again?
I got a recruiter call for a homebuilder position in California a few weeks ago. I almost seemed unethical to even think about returning the call.
A few participants were concerned about rising inflation, while they raised forecasts for unemployment.
can you say Misery Index?
I found this forecast amazing. They are forecasting a robust recovery in 2010 (above the growth rate of potential GDP - so probably in the 3.5% to 4.5% GDP range), declining unemployment, and little inflation. Nirvana.
I've never seen a robust recovery without housing and consumer spending leading the way ... hmmm.
best to all
Consumer spending appeared to have stabilized since the start of the year
Well,...DUH!
And why not? Since an ever greater number of people aren't paying their taxes, mortgages, or credit card bills.
"IOUs may be the future of municipal finance"
Giggity giggity!...opps I think I just pooped myself...
I have already seen the house flipping being. The market makers are back in the real estate market....
"Does it really matter if it feels like a DEPRESSION to most of the population"
Not to me or anyone I know....the depression is not going to happen. Never was. Move on!
I must have missed their forecast for the recession we are "leaving". Since their economic forecasts have been so accurate over the last 10 years I guess we should be paying a lot of attention to what the Fed has to say.
I've never seen a robust recovery without housing and consumer spending leading the way ... hmmm.
I think the Fed just told us it's different this time.
"About that 900 target for the S&P, sure it isn't 1000? "
No, it will bump up between 870 and 940, but once it starts getting out of hand the spoos selling starts in earnest.
there will always be another bond auction to be primed, after all.
Not to me or anyone I know....the depression is not going to happen. Never was. Move on!
Good to see Buffy and Biff doing well...now about those other 20 million or so.
the staff projected that real GDP would expand at a rate well above that of its potential,
Potential is a maximum.
We will exceed the maximum.
We will be better than best.
Pump monkeys, conmen, whores, pimps, johns and indentured servants. We're #1
And the Fed has been just spot on. Righto. Okee-dokey.
(2011-2012): that real GDP would expand at a rate well above that of its potential, that the unemployment rate would decline significantly, and that overall and core personal consumption expenditures inflation would stay low.
guess BB gets that reappointment
I really admire the bankers. It takes big-ballz to flaunt your uber-wealth in front of an unemployed mob.
Okay, I am no architect of stable economic societies...but something tells me that a lot of unemployed people aren't going to cheer a recovering economy that pays more money in bonuses than a 'middle class normal guy' sees in a lifetime. Again, how is a jobless recovery good for America? The key to this whole situation will be when Goldman Sachs announces it is relocating to somewhere abroad. Then the yellow brick road will make sense...
"...the staff projected that real GDP would expand at a rate well above that of its potential..."
My immaculate ass. But the markets will buy it-- the Matrix has been reloaded and those who disagree will get their shorts reamed.
2009 Recession Revisited
http://www.realmeme.com/roller/page/realmeme?entry=2009_recession_revisited
Roubini's traffic peaked in Oct.
CR's traffic peaked in March.
Recession keywords peaked in March.
Double peak pattern is similar to 2001 Recession.
very convenient we were able to sell a slug of 10 years last week at 3.30%, now they are at 3.58%.
In price, that's a 2$ loss in a week for the suckers who bought at the auction.
you could make a mint doing a pairs trade leading up to auctions, then reversing it.
Put out the biggest forest fire (financial meltdown) in 80 years by breaking the dam and flooding the forest with massive liquidity.
Nothing BUT an 'immaculate recovery' to follow.
At least the banker's mountainside homes with scenic panoramas are saved. Too bad about the town down in the valley, though.
Crispy - agree that it never was going to look like the 1930's b/c of the (limited) social safety net in place. But what % of folks are un/underemployed, locked in a declining standard of living due to debt service, with no prospects of thriving in whatever industries will grow in the future (bioscience, green tech, blah blah blah). More to the point - even if the cliff diving is done, what is going to lead to future prosperity?
Looks like Bernanke is gonna be bunking with Krugman in China.
Rob Dawg (homepage, profile) wrote on Wed, 7/15/2009 - 6:13 pm
Which sectors will lead us out?
Government
"Health" (government)
"Education" (government)
"Environment" "green" jobs (government)
War (government)
Rather than leading out, it is more like leading us into the woods.
The FOMC says 'Get a job you losers"
Thanks for the link, Broward.
Hal-
One thing difference from the '30s is the student loan program. Pretty much everyone I know from the US in real estate development is headed back to school to do something else.
What about the debt? What about California? What about entire industries that are now obsolete?
I must be really negative.
I hear banjos...
"In price, that's a 2$ loss in a week for the suckers who bought at the auction."
If this is happening week after week then perhaps it's more than being a sucker? When you hitch your export based economy to a faltering consumer based economy then that doesn't leave you much choice. Of course you could just unhitch and have a civil war instead.
Oh, more than that, one in nine Americans is getting food stamps now...
U.S. food stamp tally up 1.2 million in two months
| Reuters
"What about the debt? What about California? What about entire industries that are now obsolete?"
financial engineering will take care of this
Hal Incandenza -
"agree that it never was going to look like the 1930's b/c of the (limited) social safety net in place" - yes, along with the flood of money, it was obvious from the beginning this would never occur.
The poor and middle class have been killed in this country since the Reagan Revolution and Contract w/ America. Just keep giving them their circus and bread (cable and fast food) and they will take it....
I've heard about that - they're all going to become nurses and dental hygienists and xray techs. Too bad no one has health insurance to pay for all of those services. Try again!
The alchemy of deficit finance will make the economy look better for about the next year. It's an illusion, and the cost will be another trillion or so of debt tied around everyone's neck. GDP numbers from Q3/09 - Q3/10 should be positive though. The Fed is low on it's unemployment forecast too. 10%+ is coming soon and will persist for years. 10%+ unemployment for a prolonged period of time is one definition of a depression.
There is a difference between a projection and a prediction. Many's the time I've sat through a meeting in which we made plans based on projections that everyone in the room knew were utter BS but which we were forced to use for reasons of corporate politics (usually because the CFO had presented the figures to analysts and shareholders in a desperate attempt to maintain expectations).
"The poor and middle class have been killed in this country since the Reagan Revolution and Contract w/ America. Just keep giving them their circus and bread (cable and fast food) and they will take it.... "
Didn't you mean "Contract on America"?
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"they're all going to become nurses and dental hygienists and xray techs"
no, butlers, maids and au pairs for the GS execs.
"If this is happening week after week then perhaps it's more than being a sucker?"
Oh, it isn't the Chinese buying the 10 year. They are still buying, but in the short end.
Who could it be, then? Who has been given a ton of money by BB at zero interest rates, and have no viable private sector places to park that money? Who was bailed out by the government? What strings were attached to that bailout money?
This river don't go to Aintree.
Crispy - I've been trying to make the point to my parents for years that our standard of living is going down, not up. My Mom, a smart, professional lady, has always countered that I was wrong b/c she can afford to fly cross-country and has an HDTV. Nevermind that there's no pension and it takes 2+ incomes to make it work.
About as reliable as their "subprime is contained" and "housing prices are based on fundamentals" calls.
@Turbo
YouTube -
Nothing but the end of the line will stop this monetization train.
Hal-
You've got a point about butlers and au pairs for GS execs. In about a generation Americans will do the jobs that illegal immigrants won't want to do.
w-o-w
oh well. i guess we're all wrong. time to go long. it's worth noting that very few, if any, of the doomsday prognostications proffered on this board have come to pass.
I was thinking about appointing a few PBS people to Czar positions, Like Barney or a committee composed of Sesame street Tele Tubbies, Thomas the tank engine! I don't think They could do any worse.
welcome to the government bubble. enjoy it while it lasts, cuz when it crashes...
damn, look at oil go today.
my wealth is being preserved, at least.
never was going to look like the 1930's b/c of the (limited) social safety net in place"
The 1930s had an extensive social safety net.
The federal government replaced it with a federal safety net.
Okay. I think I'm beginning to get it now.
Of course they're going to cheerlead and sweep everything under the carpet. If public opinion gets too negative and people start to panic, the end is near.
That's the only rational way I can make sense of the new green shoots economy. I'm starting to think they don't really want this ship to sink either.
I keep thinking it is 1974 all over again, and we're headed for a 1982 in a few years when the government debt bubble crashes.
can kermit pump over 8600 today? timmay using hank's bazooka?
my wealth is being preserved, at least.
ghostface, are you the reason I'm going to be paying more at the pump tomorrow? I don't appreciate that.
" it's worth noting that very few, if any, of the doomsday prognostications proffered on this board have come to pass. "
Agree!
I know a guy with no pension but -- he thought -- sufficient savings for a long and plush retirement. Well, now his retirement fund has shrunk enough that, he says, he is probably going to outlive it. But he and his wife still takes a couple of big trips a year (and several other small ones). Now he's all pissed because he has to have surgery this summer (he's got Medigap, no prob) and he'll miss his usual summer cottage on Cape Cod. Responsible guy all his life, too, former engineer. (Add for those who care -- not a boomer, older than that.)
I just don't get it.
I was just thinking is this pump a reaction to a possible CIT failure this friday? hmm.
Of course they're going to cheerlead and sweep everything under the carpet. If public opinion gets too negative and people start to panic, the end is near. - Outsider
Last September, the world looked into the existential abyss, and completely freaked out. This will not be allowed to happen again.
CIT fail already priced in.....glad I sold my puts and FAZ last week....
I'm calling BS on the "no doomsday prognostications have come to pass" call. What do you call a 60% drop in the S&P? Who gives a crap that Tim&Ben are pumping it now - most folks would call it a crash, and have been. What do you call 60-70% home price declines?
The only people wrong about a doomsday scenario are the ones stocking up on ammo and dry goods. And they could be just "not right yet."
this keeps up though, it ends in war. maybe we were heading there no matter what, but none of what is going on now is sustainable.
CIT fail already priced in.....
I see 227 priced in so we will be down 200 the next few days....I get it now....whew! for a minute there I thought all hope was lost.
Has there ever been a dissent on the "outllook" part of FOMC minutes?
Well, will someone please explain this quote from LAST WEEK.
Summers says the recession has a long way to go and the worst is still ahead. Summers says: "I don't think the worst is over ... It's very likely that more jobs will be lost. It would not be surprising if GDP has not yet reached its low. What does appear to be true is that the sense of panic in the markets and freefall in the economy has subsided and one does not have the sense of a situation as out of control as a few months ago."
OTOH, the CNBC shill on the last thread specifically attacked the doomer blogs and "bitter bloggers." Which shows that blogs like CR are actually having an effect, and are something of a threat. You all should take some pride in that.
"ghostface, are you the reason I'm going to be paying more at the pump tomorrow? I don't appreciate that. "
Ah, no, you can blame Bernanke for that.
I doubt my buying is making a difference, but there are plenty more like me who see that all this money creation is going to lead to a currency collapse (relative to real assets, not other BS fiat currencies).
We haven't begun to finance our deficits.
Is nothingburger in the CR glossary?
How about Bankerdome?
black dog,
cognitive dissonance?
This was prescient:
Monty Python's Flying Circus: Just the Words - Episode 35
"Of course they're safe. There's absolutely no doubt about that. They are as strong, solid and as safe as any other building method in this country provided of course people believe in them."
Maybe they know the game is up and they are going all in on the bluff recovery....I am though utterly amazed at the strength of the market this year....stunning
Maria's rolling the midnight cowboy stand out of the closet and pluggin it directly into the PGE generator outside the building.
Look at the futures under Energy...look at natural gas...questions?
Bloomberg.com:
Commodity Futures
who forgot to add nothingburger?
I'm starting to think they don't really want this ship to sink either.
I think that was always clear, especially if you watched Greenspan closely.
It's never been about the Federal Reserve "robbing the country".
The Feds know their history, they know Henry Ford.
I suspect that they didn't know about the 60-to-48-hour-week transition from 1873-1896, because I only dug that out from reading through several source materials that were contemporary to the time and I've never seen it mentioned in modern studies.
I'm think the percentage bet is Harry Dent.
We get another recession in 2011-2013.
" it's worth noting that very few, if any, of the doomsday prognostications proffered on this board have come to pass. "
It would be worth listing which ones you mean. People have different measures of doom.
Widescale housing declines would count for some folks measure of doom, and it seemed inconceivable that national declines could occur. Yet they have.
Like I said: Which ones do you mean?
My list so far:
Mad Max.
Possibly the only thing that could save America at this point would be to renounce the "free-trade" mantra, slap a 20% or more duty on EVERYTHING that is imported and a 20% tax on the foreign operations of US companies. Then we'd see manufacturing start to relocate back here.
But our current system of "free-trade" is like a religion. We can't talk about it's failings. We can't consider alternatives. Consider GM. They received massive government bailouts and a cushy government-greased bankruptcy. What are their future plans? To build more cars in Brazil and China! Big business is multi-national. Their loyalty is to profits not to this country.
It's strange to think about how isolationist the USA was before WWII. But after the war we embraced endless global entanglements. Unless we can return to some form of self-sufficiency we are on an unstoppable path to ruin. The new America will be built on the Latin American model with 10% rich, 20% middle class and 70% poor. The shift from middle-class to poor is the name of the pain that the 50% in the middle are feeling right now.
I'm not sure those are entirely inconsistent with one another. The FOMC didn't project rising unemployment and GDP from here, they projected it from year end. If the second half is really, really catastrophic we could easily have much lower GDP and higher unemployment and still meet the FOMC's projections for next year.
Also, no fear of inflation despite a promise to remain stimulative in a period of projected above potential growth.
Hmm.
"Maria's rolling the midnight cowboy stand out of the closet and pluggin it directly into the PGE generator outside the building."
She is so pleased she is buying new batteries on the way home tonight.
Personally, I'm discounting the Mad Max, guns and ammo, burning cities stuff. My model is Portland, as it is now, sort of squeaking by on handouts, a basement flop, beans, and peanut butter. Not terribly exciting from a literary POV.
i would have swore midnight cowboy was in the glossary already
was it removed?
Dateline March 12, 2011. Place: US Congress. Fed Chair getting interviewed by ornery congresscritters about how their forecasts didn't play out. "Sir, nobody could have possibly forseen that unemployment conditions would have continued to deteriorate, leading to additional foreclosures and a double-dip recession."
"a basement flop, beans, and peanut butter. Not terribly exciting from a literary POV"
waiting for the dostoyevsky of flatulence
the correct terminology is nightstand cowboy
midnight cowboy works for me though, add it
Consider GM can profit these other countries with out UAW baggage. They still send the profits home to prop up what is left of GM and pay the UAW legacy cost and the US get tax money. I wonder why Ford or GM Corporate has hung around here?
Mad max is a remote possibility that becomes less and less so everyday as our leaders procrastinate their own come to Jesus moments.
As this country's liabilities continue to pile up exponentially.....the event horizon accelerates.
I'm sticking with my doomsday forecast for CA. 40% more drop in home prices. Unemployment peaking at 14-15%, tons of people leaving, riots, looting, arson, national guard.
So did the depression bounce off Frenchy Fuqua or Jack Tatum?
"Of course they're going to cheerlead and sweep everything under the carpet. If public opinion gets too negative and people start to panic, the end is near. -"
You should read "The Creature From Jekyll Island", there is a chapter near the end called "The Pessimistic Scenario" where the author calls this scenario pretty well.
I quote:
"It is now seven weeks later. Something happened, but no one knows what. Like a spark igniting a twig, spreading to a branch, and then engulfing the entire forest, the public has panicked. Responding to a primitive herd instinct, they are descending on the banks and thrifts. They want their money. They want their savings.
Perhaps it was the newly released statistics showing higher unemployment, or the continued rise in bankruptcies, or the Congressional vote to increase the national debt again, or the jump in Social Security taxes, or the loss of another 140,000 jobs to Mexico, or the riots in Chicago and Detroit for more food stamps and government housing, or the presence of UN 'Peacekeeping' troops to augment the National Guard, or the rumor that Bank of America was technically insolvent, or the UN World Court ruling that the number of American automobiles had to be cut by 30% by December 31st, or the skeptical tone in the voice of the CBS news anchor as he quoted the latest prediction of renewed prosperity.
Whatever it was, there are now long lines of sober-faced depositors outside every bank...
Spokesmen from the Treasury and the Federal Reserve appear on TV and assure the nation that there is no need for panic. Everything is under control. The only problem is the irrational behavior of alarmists who have no faith in their country.
No one believes them..."
Good stuff.
They still send the profits home to prop up what is left of GM and pay the UAW legacy cost and the US get tax money.
Repatriated earnings get taxed at 35%, which is why the money will stay overseas to finance expansion. it also explains why BigPharma and Silicon Valley has had to issue a lot of debt recently.
A friend just sent an email and told me to tell all of you that everything is alright and a man in a bright white jacket would show up soon with some 'happy' medicine. So stay nice and calm and everything will make sense soon. Also the big needle doesn't hurt a bit.
from the last thread:
"Another short gets washed upon the rocky shore... "
haha - except I'm not playing this market at all. I'm just not happy w/ sky high equities prices based on well, thin air.
Broward,
Your comment about the cat in a hat shirt and googly ball eyeglasses while sitting in a shutdown the office meeting got me to reminiscing on the last biotech I worked at.
At the end we were a whole building, most of the cubes torn down and about 8 of us left helping to shutdown the company. You could literally play soccer inside the building it was so large and so empty. We were in the process of moving all the equipment (dna scanners, computers etc..) out into a garage area so that the VC companies could repossess everything. We had to move everything through the lab area which was right in front of the board room. They were still meeting sometimes with VC firms trying to drum up some cash. My boss was the head of IT and Biotech at that point and still met occasionally with VC and upper management to give an overview of everything.
On the way back from the garage I decided to give him a ride on the trolley. Bad idea. Turns out the door to the board-room was open and there was a VC meeting going on. We go flying by at full speed, the head of IT/Biotech with arms outstretched like in the movie Titanic screaming "wheeee!!!"
Sadly we didn't get any more funding. Not bad though, the company blew through a couple of hundred million of VC funding before shutting down. The sad thing was that by that time we actually had a genetic test that had passed the FDA regulatory hurdles. And it worked very well.
Possibly the only thing that could save America at this point would be to renounce the "free-trade" mantra, slap a 20% or more duty on EVERYTHING that is imported and a 20% tax on the foreign operations of US companies. Then we'd see manufacturing start to relocate back here.
No, I don't think that would work. A lot of our parts are made overseas, etc. Our markets are already intertwined. To cut off foreign trade would result in massive job losses on our shores too. Not to mention foreign countries are funding our debt as it is.
If I'm wrong here, someone tell me.
haha - except I'm not playing this market at all. I'm just not happy w/ sky high equities prices based on well, thin air. - burn
I can't be so sanguine-- my money is in cash, American cash, and it's getting chewed up by inflation and low returns. Play the market, or don't play, scrood either way.
15% unemployment is doom?
That exists in lots of places in the world. Yeah, there is some light rioting, but not much.
To me, doom is much much worse.
Protectionism will be back, and in a big way, sooner than you think.
At some point taxes will be collected in theory but you may be right. Right now these markets have buyers and the investment is needed. Proves the fact the US consumer has no buying power and won't for a long time. Neither does Europe, that is why they dumped Saab and Opel/Vaxhaul. Never an mention of Australia, China, Korea, Brazil operations for sale either. After the blip of presale from the cash for clunkers runs out what next? The long hard slug will bring them right back down.
"Play the market, or don't play, scrood either way. "
I still think we're going to have pretty nasty deflation. Cash is a good place to be.
You should read "The Creature From Jekyll Island
Weird title, but I'll look for it. Thanks.
"Also, no fear of inflation despite a promise to remain stimulative in a period of projected above potential growth."
One irony is, a rising stock market alone is inflationary - P/E expansion is nothing more than money creation. As people borrow against this new wealth, the effect multiplies.
Which is why the Fed will try to manipulate the markets in both directions. They want "Goldilocks". If things heat up now, with no underlying strength in the economy, it will be just as bad as a depression.
Also, the more people swing from the fear of deflation to the fear of inflation, the more scrutiny the Fed gets.
It's a balancing act.
"Yeah, there is some light rioting"
burning and a looting tonight
Voodoo economics. Period. End of story.
" 15% unemployment is doom?
That exists in lots of places in the world. Yeah, there is some light rioting, but not much."
But Americans don't view themselves as living in "lots of places". High unemployment is viewed as a weakness to Americans, they won't stand for it as long as the French.
Also, without universal healthcare, they can't stand for it.
Protectionism will be back, and in a big way, sooner than you think. - WWNM
I can't see it. Foreigners own too much stuff in America, and we own a lot of stuff overseas. And most big corporations are multinationals, too. Protectionism is Mutual Assured Destruction for too many important players, who have money to buy Congress, and the courts. That deck is stacked.
" slap a 20% or more duty on EVERYTHING that is imported and a 20% tax on the foreign operations of US companies."
Can you give us Canadians back 20% on the locked in undermarket rates you're getting on water and natural resources as part of NAFTA as part of the bargain. And if you could also throw in again allowing us to offer tax-credits to smoke-stack polluters like were able to do before NAFTA I'd be much obliged as well. Also pretty please let us drop the requirement that is part of NAFTA that we cannot stop selling water to the US EVEN if we run dry in Canada.
crispy's taunt is a red herring.
The "Mad Max" thing has always been floating about but never been a serious prediction. OTOH, I stand by my depression call, and that's based upon continued economic contraction, higher persistent unemployment, and overall deflation. As many have noted, there's no sector poised to lead us out and many still pushing us further in; and no, government can't do anything beneficial about that.
We have yet to see the bottom in the markets, housing, employment, CRE, etc. Should be plenty of fun ahead (sarcastically speaking, of course).
This secretly recorded image of the FOMC meeting explains a few things:
http://screenrant.com/wp-content/uploads/my-little-pony.jpg
In any case, I'm 100% cash in ye ole IRA with today's rally. A nice flip in TBT from 48.x takes the sting out of my TZA.
I can't be so sanguine-- my money is in cash, American cash, and it's getting chewed up by inflation and low returns. Play the market, or don't play, scrood either way.
If I had cash lying around and I were wondering what to do with it (which is not the case, unfortunately), here is what I'd do. I'd pay off all of my debt, Everything. Then I'd pay any expenses forward that I could. After that I'd buy everything that I might be absolutely needing in the near future - whether it's clothes or food or whatever. I'd learn how to do as much self-sufficient stuff as I could. I'd perfect my food growing techniques. I'd practice living on as litlte as I could. If I needed to, I'd buy some land.
And if I still had cash after that, I'd throw a big party and invite everyone. And make sure I helped whoever I could.
And then I'd put the rest in diversified places and forget about it.
Totally agree with Ghost on the book.....be prepared to devote some time to it..it's fairly long.
the Pessimistic scenario at the end is playing out as it's pretty spot on.....we just need that little part about panic with the depositor base (which seems unlikely at this point) because it's still being *ss-reamed by "hope".
What do you want to bet that we'll get those much anticipated bank-holiday's but it will be because of swine flu or some other manufactured "event".
Ciao
MS
I am not the smartest one here. So I decided to make a list. A pro v. con of economic nirvana.
Pro
The banking system is no longer going collapse
Unemployment, just like housing prices can not continue to rise forever.
Consumer spending can not drop much lower - people will replace items at a minimum
We still manufacture and can sell enough just in NA to provide jobs
Con
The banking system still has to survive CC problems, housing, and CRE
Unemployment will continue to rise and spinoff all kinds of bad things
Consumer spending will not drive the economy again for at least a generation
We don't make anything that anyone needs
Krugman seems to think gubmint deficits saved us from GD II
Deficits saved the world - Paul Krugman Blog - NYTimes.com
That’s an interesting way to think about what has happened — and it also suggests a startling conclusion: namely, government deficits, mainly the result of automatic stabilizers rather than discretionary policy, are the only thing that has saved us from a second Great Depression.
Mr. Market in "stupid up" mode now.
Buy now or BE PRICED OUT FOREVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Krugman's obviously drinking the same primo koolaid they serve at the FOMC.
Protectionism will be back, and in a big way, sooner than you think.
Absolutely. It's the last bastion of scoundrels.
I really don't agree with a single one of those "pros". but .500 is pretty spectacular for baseball.
nova,
Not to feed your "AA" prose but I'm not so sure of those "pros".
Yep, We have been saved from ourselves. Now who do I thank, since the enemy of my enemy is my friend.
crispy's taunt is a red herring.
TJ, I disagree. I'm genuinely curious what doomster predictions they believe have been wrong.
btw: THe downfall (imho) of hbb was that there were 50 posters saying the exact same thing every day.
Yes there was a housing crash, and yes hbb/ben was on top of it. But the blog stopped being useful because nothing else got fleshed out.
And I note: An honest-to-god prediction registration site would be very useful.
Outsider,
Yeah, lots of preparatory things I'd do if I had the money, too!
At least I have no debt.
PS: Maybe I shouldn't be so hard on HBB. It's been ages since I looked there.
TJ,
Actually, I couldn't think of any pro's. I just did to be balanced.
"here is what I'd do. I'd pay off all of my debt, "
Why even bother?? Obviously you've not learned from the PTB.
Ciao
MS
So now we have a "shitload" of companies who find themselves in a "new normal" economy with more factories, offices, employees, etc than they can ever use and more debt than they can ever pay back. Expect the recurrent theme for years to come to be "Recession is over"....only it won't be.
"Krugman's obviously drinking the same primo koolaid they serve at the FOMC. "
'
The 2008 vintage got bad reviews but the 2009 vintage is stellar apparently. Very smooth with hints of something green rolling off the tongue and a slight manure after taste.
At least I have no debt.
And how did the bankruptcy proceeding go?
The way I see it is, that the staff must smoke some killer weed. Somewhere along the line of "chronic wheelchair weed". There is no other rational explanation for their arguments. I bet they smell like skunks.
Great post.
primo koolaid=grape laced with marinol
I'd pay off all of my debt, Everything. Then I'd pay any expenses forward that I could. After that I'd buy everything that I might be absolutely needing in the near future - whether it's clothes or food or whatever. I'd learn how to do as much self-sufficient stuff as I could. I'd perfect my food growing techniques. I'd practice living on as litlte as I could. If I needed to, I'd buy some land.- Outsider
Aw, hon, it just doesn't quite work that way. I don't have any debt, other than the mortgage, and if I paid that off, I'd be placing a bet on the future of the local housing market, tying up a large chunk of change in an illiquid asset. And that's more uncertain than the stock market, IMO. Buying stuff ahead of time presumes a lot of storage space, and you have to pay for that, either renting or owning. Becoming 'self-sufficient' food wise also presumes you're buying or renting land, unless you can get a community garden patch.
In any case, food is not the big ticket-- it's medical care. And that's thousands of dollars a year, or go without. As I get older, I see that's the difference between a comfortable retirement and poverty. It only takes one bout with cancer, God forbid, to bankrupt you, even if you have a stash of cash. That's why I will be retiring outside the U.S.
And how did the bankruptcy proceeding go?
LOL, but only because it's partly true. I emerged from a successfully completed 13 plan 4 years ago.
Headlines July 15, 1930
Next Congressional session in December will, among several big items, include a major inquiry by Senator Glass concerning banking in general and the role of Federal Reserve credit in speculation;
Bulls encouraged by recent rally and technical indicators of strength. Buy orders accumulated over the weekend, leading to an opening rally with new rally highs for many major stocks. Speculative issues were particularly active. Oils, food, amusement, communication, utilities, banks strong. Most stocks closed at daily highs.
Good signs seen in rise in life insurance sales and bank deposits vs. 1929.
Leading traders seen buying; "They are picking out stocks strong in intrinsic value, with potentialities of a quick comeback when business returns to normal."
Auto industry successful in reducing inventories by drastically cutting production.
May freight traffic on class 1 rails was 36.6B net ton miles, down 12.8% from 1929 and down 6.8% from 1928.
A&P first-half sales $548M, up 8% from 1929; June sales also up 8% from 1929. Remodeling stores to attract "that part of the public that patronizes better shopping districts and demands unusual varieties and costly delicacies."
BREAKING
CIT shares halted; last trade up 1.9% at $1.64
Priced in huh.....fools.
Sheesh makes me damn lucky that I sold SZCSH (july Spy Puts) at $1.27 last week....now only if I loaded up on SWGGN at .13 on Friday...can't win them all I guess.
Ciao
MS
......geeze..........what the Hell happened? I see I missed another "Recovery" - Well, It's not so much whether you think the game is "fixed", but whether you buy a ticket to it..........Seems a lot of people are "buying" according to Mr. Market.
From Bazooka Hank:
WASHINGTON (MarketWatch) - Former Treasury Secretary Henry Paulson is planning to defend his involvement in Bank of America's controversial acquisition of Merrill Lynch, saying Bank of America had no legal basis to cancel the transaction.
"It would be unthinkable for Bank of America to take this destructive action for which there was no reasonable legal basis and which would show a lack of judgment," Paulson said in a copy of testimony obtained by MarketWatch.
Paulson is scheduled to testify Thursday before the House Oversight and Investigations Committee about the Treasury's role in the deal.