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Battle Of The Heavyweights: Rosenberg Vs Ryder On Keene
Sick of listening to the dime a dozen "experts" on CNBC every 5 minutes (with no apparent regard for their reputation - just roll the dice) discussing how the US economy will improve in Q4, after a drop in Q3? Too bad none of them can ever formulate even half a logical or sensible sentence to explain just what it is in the next 2 months and 26 days that will make this miraculous transformation happen, when with every passing day the economy gets worse and worse. In fact, can someone please explain to these soon to be unemployed individuals that the only reason stocks are up is because of QE2, which is happening only because the economy is in dire need of even more negative real interest rates, which is the functional equivalent of what buying securities achieves. It is no wonder we can't remember any of their names: they all blur in a gangrenous cloud of lies and stupidity. We can't say the same for David Rosenberg, who has so far been spot on in his predictions on the economy (the market will catch up sooner or later). The Canadian strategist was on Tom Keene's show earlier, in what always becomes an informative and insightful interview. Rosenberg's soundbite from this particular show: "I think fourth quarter [GDP] can be flat to negative, as almost all the GDP growth in Q3 was from auto-production." Yet to keep it from being one-sided, Keene brings on a bull to attempt to diffuse Rosie's permaunrosyness, in this case John Ryding of RDQ Economics. And yes, John fails.
Full clip below.
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I hope that doen't leave a scar...
The people that argue against Rosenberg, consistently show that they can see no farther than tranches or 1,000 point moves. Mr Rosenberg truly has shown he can see around corners and far into the future.
But he has no answers!
That was my impression as well. His view was that an interest rate increase will not help and that capital investment incentives likewise will not work.
The only clear policy/strategy prescription I heard was to support labor.
I'm gonna watch it again, but that's what I heard.
Okay, after a second viewing: Rosenberg, like Ryding, appears to support a Health Care Reform do-over.
Much to-do about little in this Match of the Economist Titans that I could see, really.
Obviously, interest rate increases are not on the table. Health Care Reform is now behind us. Ryding's idea of a Payroll tax holiday? A fart in the whirlwind of production contraction.
If there was more here, it was over my head.
The takeaway from both of them was that recovery is gonna be a long, slow process.
Come on, guys, asking a bit much, dontcha think?
Interview the most brilliant man anywhere and no matter how smart and informed he is, he's not going to give you a quick answer about how to unscramble an egg.
'Cause it can't be done.
I also feel, he feels ,eveything was answered. It was stated by both to let the inevitable run its course, take the pain.
...but The Fed does not wish to take the pain, because they've got a load of Mortgage Backed Securities on their balance sheet, and THE PAIN is a further necessary drop in housing prices. savers have to get rewarded somewhere or we'll keep protesting by buying gold. if Bernanke would allow further correction in real estate prices then we may loosen our death-grip on our hard earned money and scoopy, scoopy a lake house or two. ...but not at these prices, Benny. sorry, dude. we're taking our ball and going home.
He most certainly did have an answer. It was to attack the problem from the labor side of the equation and remove (or at least tone down) the confusion, unknowns and outright attacks on business and basic human liberties that this current regime is constantly pursuing.
have followed rosie for a while and man he was spot on with our credit crisis... he was calling it in 2006...
but since then he has been permabear -- I have followed his views and its guided my strategy and I have left a lot of money off the table...
he's sharp as a knife but I take is views with a grain of salt...
Inventory build? The huge (biggest ship-to-train in US?) new-car waypoint near me is bursting at the seams. I hope they find buyers for all those cans, even at the advertised 0.00% for 60 months.
the days of folks buying what they want, like the latest car model and 4,000 more square feet of castle dwelling, are now giving way to folks buying only what they need, like food and energy, and precious metals with any extra loot. the rubberband done stretched too far. never have so few resources been squandered by so many. its blowback time.
You’re a good man. Well said.
cheers, Ferrari.
I think they can continue to leave rates low and withhold bank loans to the public indefinately. What does it matter if the banks are just sitting on it? It isn't inflationary at all until someone takes a loan. It is just a number on a piece of paper. The real inflation comes from the increase in the money supply due to government borrowing. There is nothing that can be done about that. It is coming down the pipe big time.
Kick the can down the road until growth comes. Their only answer is keep the tax cuts and hold on tight!
Revisiting Irving Fisher & Debt Deflation - http://tinyhedge.blogspot.com/2010/09/irving-fisher-and-debt-deflation.html
What I found interesting is that they commented about the Health Care Reform. It almost appears that the President spent too much time on Health Care Reform and not on the Economy. The Health Care Reform caused Companies to let Employees go and to stop hiring new workers. If that is the case then no matter how much Money Bernankie throws at the problem it will not self correct as Companies will not hire workers because of the Health Care Bill.
Could the real problem with unemployment go back to the Health Care Bill?
Sparkles:
Who knew?
Yes, the "health care" bill, just like "minimum wage"; distorts the price structure in a way that prevents companies from hiring.
So I conclude that either of these situations is going on: a) either these guys and gals in indisputable charge are smart(est) and most competent or they are b) inept and clueless.
The result of Our Dear President's promises that U/E would not go over 8% if we only passed his $787BB bailout (oops, wait, held up for the extra $5BB or so bribe to get the bill passed) is U/E approaching 10%, really U-6 > 17% and really when considering all of those who have fallen off the other end--lots higher.
So, I'm thinking that Our Dear President, SanFranNan, and Harry are on a mission. That mission has no understanding nor care for how jobs are created, nor for the people who would fill those jobs.
With that point of view stated: my question.
How on Earth do you think that the current administration actually cares about job creation to benefit normal people? This is a difficult issue to think through, I'll admit.
Of course, comparing union membership between 1930 and 1940, well, there was a net increase. Maybe that is the reason.
Add in "Cap and Trade" restrictions on invisible gas to your thinking. After all, the House "passed" the bill without it being in the well--go figure.
But your question is worthy of "Root Cause Analysis" that is conveniently done in the "Five Whys"; that is ask Why?, then Why is that? then ...
So:
I'd say the health care bill is a contributor to uncertainty, but it goes deeper than that.
Why?
- Ned
Maybe. Could the real problem with unemployment go back to electing a black president? I see this as more likely. Few will actually say it, but many business owners still carry a racially-based dis-ease that is augmented by Obama's lack of proven experience, and is manifested in a low level of confidence in this president, and in the country. [We beez in a funk.]
Put a white guy, or gal, in the oval office and more Johnie Rebs will start hiring; it still probably won't be enough.
The USA might have been able to tolerate a pro-union, half-black president with a muslim name, if the system was not so reliant on confidence, especially the confidence of small business owners.
I sometimes wonder if this wasn't forseen, and planned? But then I remember that those in control are not that smart, they mostly just have wealthy ancestors.
hh--uncertainty:
I'd go with the whole legislative agenda. I work for a moderately big organization, my brother is really small, we're in MA (Bawney Fwank zone) and both of us are constrained in 1, 3, 5 year financial projections with respect to hiring. And the thinking is "with this uncertainty, we'll wait."
Negats on the color thing--has nothing to do with the view 18 months into it (of course, Rassmussen's poll with >90% dark green approval has its own implications on the matter).
But does have bearing on the "American" view. So the Southerners who I know are not at all racist (got over it a long time before T'wana Brawley).
Think if C. Thomas was on the ballot.
Forseen? Saul did. Planned? Bill and George 'been working on it for decades.
- Ned
The very wealthy Jewish friends of mine from Newton, MA, (obviously fans of the blue team) who I know very well, will never say they have low confidence in a half-black president with a Muslim name just because he is half black with a Muslim name. However, I know them well enough to believe this is indeed the case.
I live in the South, and your Southern acquaintances must not be that close.
And as for uncertainty, most small business owners are rarely if ever certain of the future six months or a year out. Most small business owners manage payroll to payroll, and have been for many years.
hedgeless, I can't stand Obama, but your comments are bordering being ridiculous. The color of his skin does not mean anything. It's his actions and beliefs that the American (and the world) people are, quite frankly, freaking out about. America is learning (day by day) that he is an opinionated, spoiled, snot nosed liberal socialist that believes that Government can make better decisions for the citizenry than the citizenry can make for themselves.
I am relieved too see that this ratical view is in fact not being endorsed by the majority of Americans. America is also in the early stages of realizing that we, the people, have been getting robbed by our leaders in Washington and through the policies of our Federal Reserve System. America has been bamboozled by this "Great Monetary Ponzi Experiment" that Nixon got us into. The brain washing spell seems to have been short circuited. Let's just hope that this enlightenment continues to spread.
But the color of his skin is meaningless.
To even call what happened a "health care bill" is to fall into a failure of understanding. Yes, yes, that's what it's called, so no criticism here, but let's call a spade a spade.
This was a health INSURANCE bill.
The thing that's so frustrating is that there is not a human being alive who needs health insurance. What people need is health care.
Once you start getting abstract about the real problem, you run the risk of losing sight of what's going on.
There are ways you can approach the problem of distributing health care. There is absolutely no requirement for "mitigating financial risk" for individuals or providers. (edit)
Insurance itself is an industry that depends completely on skimming off the resources exchanged between the consumers and the providers for the profit of the insurer. It serves no other function.
The fact that the Feds chose to further commit to the insurance industry rather than the care-provider industry just demonstrates how big the abstraction problem has become.
Completely agree with your post, but
you can call it that or you can say that it takes a big amount of uncertainty from peoples live. Everybody knows that there is a posibility that you pay more to your insurance than you would if you payed directly for health care (and the same applies for any type of insurance). But there is also the posibility that you had bad luck and suddenly were in the need of a big important operation that would bankrupt you. The posibility is small but exists. The insurance company takes away big part of that risk. Everybody knows the insurance company makes money, and that there is a big posibility you end up paying more money with the insurance than paying directly, but you are paying for the service of taking away the risk. Its that simple.
It's all bs...You're either making money trading or losing money trading, the rest is just conversation.
Waterfall
"Could the real problem with unemployment go back to the Health Care Bill?"
Probably not but it certainly doesn't help ANYTHING! Let's face it, we've all been fed a shit sandwich with respect to healthcare. I get to pay more taxes to pay for the people that already do (and will continue) to receive health care benefits a'la the various ERs around the country...
Still trying to figure out who's been lacking health care in this country? I worked in health care for my first 5 years out of college and trust me, no one, NO ONE gets turned down from care when they walk in to the local hospital. Various levies pay for the dregs...
Ryding... how many jobs has he had since Bear? How many times can a guy be wrong before there is no one else who will listen to him? He just spouts off Q4 will grow about 3% without any reasoning whatsoever. I guess since that's about the rate gdp is perceived to have averaged over most of his career, he's just using that number. I'd rather him say something outlandish like 8% or something as long as he backs it up, than just default back to 'trend growth'. You could tell from his body language that he doesn't believe what he's saying in the slightest, also. Too bad Tom didn't follow up and challenge him in the least.
If Ryding is a bull...he's not exactly raging.
These guys are douchebags. It's a debt crisis and a currency crisis. While Rosy always has some good insights they don't mention what the true problem is. They just think growth is the only way out. Their option is do nothing and keep the tax cuts. Next!
I read some Einstein quote today that said something like you can't think the same way to get out of the problems that were created by that same mode of thinking. Obviously that applies here.
precisely, our Fed is a one trick pony hellbent on 'full employment' and 'moderate inflation' when this does not reflect reality as it relates to the ebb and flow of real, unforgiving markets, (especially those whose currency is not anchored to precious metals). fractional reserve lending? this may create money but it destroys wealth. Nevermind, they have tinkering to do! Somebody has to be in charge, bygolly!! So, they tinker and tinker until one day interest rates get left too low for too long and the entire western world inflates like Violet in Wonka's Chocolate Factory.
http://www.youtube.com/watch?v=qG7_V1Lzy9Q
then pop! no regional boom/bust, but rather a nationwide 'great recession'. there is nobody left to bail us out now, is there? since THE PAIN is inevitable, the least The Fed could do is raise rates to 20% to protect our USD by making it scarce again so we do not have to keep hoarding gold. "But raising rates would cause a depression!!" fucking right it will, but thats coming anyway. how long do we want it to last? because its The Fed and all these politicians that wish to keep controlling what cannot be controlled thats fucking us all up. this central money planning is a farce and the greatest crime against humanity the world has ever known. it will cause another world war, if not now, in the near future.
the answers are crystal clear: end The Fed. allow competing currencies to emerge in regional markets, including gold and silver. end 'fractional reserve lending' which is designed by banks to serve banks. get back to trading freely instead of enslaving ourselves to the ruling elite.
Chopper, I think you're dead on. Great comments. You should be a contributor.
thanks, Jean. its nice to know my wine-filled rants do not go un-noticed. :)
Doc, at least the proven way out of this mess in >'46 was growth. We know all of the other paths are dead ended. If it is an ambush, then the immediate action drill is to fight through the ambush--otherwise FUBAR.
But no economic experience that shows another path.
And the ruling folks are anti-growth. That means population die-off. That means that they intend same.
- Ned
Tom Keene is the BIGGEST Keynesian voice out there! He's no doubt a smart guy, but he has the tone like one of those pompus european sounding news anchors on public radio! I'm impressed at how well Keene keeps his composure, but he always exposes himself when anyone suggests that more stimulus, QE, etc, will eventually do more harm than good.
havn't had my Bloomberg sirius plugged in for a while and am the worse off for it. that will change soon and am i'm glad to hear the chatter here. love both Keene and Kudlow--the ultimate economic smackdown between the two heavyweights in their respective corners. CNBC really needs to turn over it's "ethos" to Kudlow the way Bloomberg had done with Tom because each is more than just a unique voice--they each have a unique approach to their craft--although you can't separate Kudlow from Cramer and "real money." the irony of course if they're both attacking a similar problem of "what saveth the City"--a question i simply avoid by declaring Chicago the victor. Still--i love the Yankess and the New York Football Giants--i can't help it. It's who I am. "Winning isn't everything. It's the only thing."
Dude, get your drugs on.
Keene's shtick is to play one interview off against another, he's really non-confrontational with amazingly stupid comments from his subjects. But he does bring on the opposite point of view and, if you listen over a period of time, well, I've seen him play one vs. other. Otherwise why would he sponsor "special" time with Whitney (ok, ok) but also Roubini and Taleb.
- Ned
Rosenberg needs to know when to push away from the table. And what's with the pink tie? Never mind the support of the Fed's eternally low interest rates? He is a gastronomic Keynsian.
pink tie?
Look Rosy's moobs - its breast cancer awareness ;)
But seriously 3% growth in 4th qtr - not likely
It is better than Liesman's famous foreskin costume (pink shirt and vein-blue tie).
The answer to the last question in the interview is that the Europeans wanted Ryder Cup victory just that little bit more.
As for Rosie, he's over the border and is set for the next phase.
Everytime you price capital poorly you create another bubble in some other part of the economy. Bubblicious economics will continue, just don't buy the top tick and if you do use a stoploss. Don't resent the illuminati for doing this just accept it for what it is and live long and prosper!
somebody has to be in charge of markets!!! ...only they're not.
Given the fact that it was a 10 minute conversation with 3 knowledgeable folks all trying to solve a massive problem (the economy), I thought it was pretty good.
I would take either one over Jabba the Summers or Turbo Tax Tim in a millisecond.
sschu
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good move by Bloomberg TV putting Keene on at noon in addition to his morning stint on Bloomberg radio -
David Rosenberg may not be who many think he is.
When Tom Keene said a highlight of the weekend was a WSJ op ed article by Chuck Schwab (Enough With the Low Interest Rates!) urging that the target interest rate be increased now because savers are getting killed without making credit readily available, Rosenberg discounted any help for savers, suggesting that savers would be the only ones helped by an interest rate increase and “the stock market would be hurt.”
The reason Rosenberg and the Fed want to target savers, of course, is that they are a prime source of sound money and stored value.
Said Rosenberg: “If you raise interest rates, then borrowing costs across the spectrum are going to go up and you have a whole bunch of mortgage borrowers who are going to be refinancing in a higher interest rate environment. And how are you going to restore faith in the housing market, which is the most interest sensitive sector of all, if you start raising interest rates? How are you going to square that circle?”
Continues Rosenberg: “What is raising interest rates going to solve? You can argue it’s going to help savers who have money in bank deposits. If you start raising interest rates what is it going to do to the stock market? Because the stock market is part of saving as well. If you raise interest rates what is it going to do to bonds? The bond market gets clobbered. A lot of people have their savings in bonds…
“The name of the game is for the Fed to do everything it possibly can to get the economy moving. I’ve never seen a cycle where they raise interest rates to get the economy strong…”
The bottom line: Rosenberg made a solid case for taking the value of savers’ money and giving it to the stock market. IOW, the way to restart the economy is to use savers’ money for the market and let the savers starve—by holding the interest rate down, by printing money and inducing inflation and by allowing banks to use that increasingly low interest rate to build up their reserves, and buy stocks and others investments on the cheap.
That means the stock market, heavily dominated by the financial sector, is the recipient of the incredible margin between interest paid and interest received; it also means that this is the time to sacrifice America’s savers—who will receive peanuts forever and ever and ever…
This of course is built on the Big Lie: that the financial sector is needed for the health of the economy.
what kind of world do we live in where those who earn and save lose out to those who borrow and take excessive risk?
an artificial world. one that will not last. savers will not take this shit.
The Fed raised rates during the Great Depression for exactly this reason. capital was fleeing the country. "But they made it worse!" did they? or was that damage already done during the 'roaring 20s' of easy credit? protecting the dollar was a priority and still should be. The Next Great Depression is surely coming if/when there is a run on the USD. Perhaps our governments can stop the bailouts and 'stimulus' government works programs and stop meddling to fix what can only be healed organically. Perhaps The Fed should shut its doors and allow regional currencies to compete, including gold and silver, so that folks with REAL wealth can decide to whom they would like to lend. this whole system is ridiculous and on on a clear path to ending in tears, if not today, sometime very soon. trade accordingly.
Choppa"
+1
Roaring '20s easy credit seems to be close to proximate cause of current difficulties, but I'd put Bawney Fwank into that mix as well.
Please explain what those "programs" are ;-)
Yep, only way is heal organically; unlike many, I'm crediting Big Ben for attempting to cushion the PLF from five points to prevent a heels-skull landing fall. It still is gonna' suck.
Don't know about savers; probably will get screwed like in the '30s.
- Ned
...i hope we don't fall for that "we'll just hold your gold for you" trick again. :)
ruthless. i love it. "take that American people" with no holds barred. I agree "there is no revolution" such that at the end of the day it is mere outrage. Still...this could be the most significant election since FDR and even a corrupt politician must consider the fact that if you're stealing from the government itself someone within said government may consider that a crime once you're "unelected." That "somebody" could include some fanatic from the Special Forces by the way who may have a history of certain "prejudices." makes for good copy as yesterday's New York Post showed as well. Indeed "news flash! news flash! newspaper people decide they want food too!"