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Howard Marks: "In The End, The Devil Always Wins"

Tyler Durden's picture




 

In the follwoing interview with Swiss Finanz und Wirtschaft, Howard Marks, chairman of the U.S. investment firm Oaktree Capital, sees more room to run for stocks. But at the same time he warns that from now on, a higher level of caution is appropriate. The bulk of the content should be largely well-known to those who follow the long-term distressed investor, but it does have such pearls as the following:

If I ask you what’s the risk in investing, you would answer the risk of losing money. But there actually are two risks in investing: One is to lose money and the other is to miss opportunity. You can eliminate either one, but you can’t eliminate both at the same time. So the question is how you’re going to position yourself versus these two risks: straight down the middle, more aggressive or more defensive. I think of it like a comedy movie where a guy is considering some activity. On his right shoulder is sitting an angel in a white robe. He says: «No, don’t do it! It’s not prudent, it’s not a good idea, it’s not proper and you’ll get in trouble». On the other shoulder is the devil in a red robe with his pitchfork. He whispers: «Do it, you’ll get rich». In the end, the devil usually wins. Caution, maturity and doing the right thing are old-fashioned ideas. And when they do battle against the desire to get rich, other than in panic times the desire to get rich usually wins. That’s why bubbles are created and frauds like Bernie Madoff get money.

Full interview below:

The heat in the equity markets is back on. This week, the S&P 500 reached a new all-time high and investors are gaining confidence again. Howard Marks thinks that stocks have more room to run. But at the same time he warns that from now on, a higher level of caution is appropriate.

As reason for his optimism about stocks Marks cites the growing popularity of the equity market and still pretty fair valuations. Nevertheless, he’s uncomfortable with the super easy monetary policy of central banks like the Federal Reserve which forces conservative investors like him to take on more risk.

Mr. Marks, next week Wall Street will celebrate the fifth anniversary of the end of the equity bear market. What are your thoughts when you’re looking back to the dark days of the financial crisis?

Because people play an important role in determining the course of the financial markets, stock prices move like a manic-depressive. Of course, there were some severe fundamental problems in the years 2008 and 2009: The economy was bad, capital markets were closed, and Lehman Brothers and other financials firms went bankrupt. But most people exaggerated that into a belief that the world was ending. In line with that, asset prices were ridiculously low. Therefore, five years ago the key to making money was to have money to spend and the nerve to spend it. In other words: To do the exact opposite of what most people were doing erroneously at that time.

And what’s your take on the stock market today, half a decade later?

Around the beginning 0f 2012 it was clear that a lot of recovery from the crisis had taken place. The economy, investor psychology and the price of credit investments had recovered, and pro risk behavior had started to return to the markets. Because of that, our mantra at Oaktree Capital for the last few years has been: «move forward, but with caution». Although a lot has changed since then I think it’s still appropriate to keep the same mantra. Today, things are not cheap anymore.  Rather I would describe the price of most assets as being on the high side of fair. We’re not in the low of the crisis like five years ago. But similarly, I don’t think we’re in a bubble.

This week, the S&P 500 printed a new intraday all-time high. What indicators are you looking at to feel the pulse of the market?

The easy thing to look at is the P/E ratio on the S&P 500. The post war norm is about 16 and the lowest point I’ve ever seen was in the late seventies when it got down to 7. At the beginning of 2012 it was around 11 which was very cheap too. During the financial crisis stock prices went down and then they came back up somewhat. At the same time, company profits moved ahead sharply, which reduced the ratio of price to earnings. So equities were extremely cheap, as I wrote in March 2012 in one of my memos called «Déjà Vu All Over Again». But we’re not there anymore.

So where do we stand now?

Let’s think about a pendulum: It swings from too rich to too cheap, but it never swings halfway and stops. And it never swings halfway and goes back to where it came from. As stocks do better, more people jump on board. From 1960 to the late nineties everybody thought that owning stocks was the way to get rich with no risk. Stocks, which had always gone up 10% a year on average, went up 20% on average in the nineties. Then, from 2000 to 2012 with the burst of the dot-com bubble and later the financial crisis, people fell out of love with stocks, causing them to get too cheap. Now people are in the process of falling in love again. And every year that stocks do well wins a few more converts until eventually the last person jumps on board. And that’s the top of the upswing. But I don’t think that craze is back now. That’s a reason for optimism, because that means more affection can develop.

What are the risks investors should be aware of as this bull market goes on?

If I ask you what’s the risk in investing, you would answer the risk of losing money. But there actually are two risks in investing: One is to lose money and the other is to miss opportunity. You can eliminate either one, but you can’t eliminate both at the same time. So the question is how you’re going to position yourself versus these two risks: straight down the middle, more aggressive or more defensive. I think of it like a comedy movie where a guy is considering some activity. On his right shoulder is sitting an angel in a white robe. He says: «No, don’t do it! It’s not prudent, it’s not a good idea, it’s not proper and you’ll get in trouble». On the other shoulder is the devil in a red robe with his pitchfork. He whispers: «Do it, you’ll get rich». In the end, the devil usually wins. Caution, maturity and doing the right thing are old-fashioned ideas. And when they do battle against the desire to get rich, other than in panic times the desire to get rich usually wins. That’s why bubbles are created and frauds like Bernie Madoff get money.

How do you avoid getting trapped by the devil?

I’ve been in this business for over forty-five years now, so I’ve had a lot of experience.  In addition, I am not a very emotional person. In fact, almost all the great investors I know are unemotional. If you’re emotional then you’ll buy at the top when everybody is euphoric and prices are high. Also, you’ll sell at the bottom when everybody is depressed and prices are low. You’ll be like everybody else and you will always do the wrong thing at the extremes. Therefore, unemotionalism is one of the most important criteria for being a successful investor. And if you can’t be unemotional you should not invest your own money, period. Most great investors practice something called contrarianism. It consists of doing the right thing at the extremes which is the contrary of what everybody else is doing. So unemtionalism is one of the basic requirements for contrarianism.

For what warning flags should investors watch out now?

There are two main things to watch: valuation and behavior. A great thing about investing is that you have historic valuation standards. You should be aware of them, but you shouldn’t be a slave to them.  You can compare the current P/E ratio to historic standards and see that the current P/E ratio is about fair relative to history. So valuations are moderate to a little expensive in most areas. Looking at investor behavior, you can ask yourself: Is everybody at the club, on the train or in the office talking about stocks? Is everybody having fun and making easy money? Is everybody saying «even though the market has doubled, I’m going to put more money in»? Is every deal sold out? Is every fund sold out? In other words: Is the party rolling? And if that’s the case, then you should be very cautious. It’s like Warren Buffett says in one of my favorite quotes: «The less prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own affairs».

How about the super easy monetary policy? With interest rates at almost zero percent and large-scale bond buying programs like QE3, the Federal Reserve and other central banks are encouraging such a risk-seeking behavior.

The availability of cheap money in too-large quantities is behind many of the excesses in the financial markets. If you look around, what do these places have in common: the southwest of the United States, China, Ireland and Spain? Too much building! In all of these jurisdictions the overbuilding occurred because money was too easy. There’s no question that the easy money policy of the Fed has dangerous aspects. On the other hand, the action of the central banks in reducing interest rates during the crisis was absolutely necessary. If they hadn’t done it we would have gotten into even bigger trouble. But that doesn’t mean that there aren’t some negative consequences. Every governmental action has consequences. Even if the main policy is correct there are side effects, like with medicine.

What are those side effects?

One of the negative consequences is that money is has been cheap. In short, we don’t have a free market in money. The barrower has been subsidized and the investor or saver has been penalized. If you’re a company with a big loan outstanding your interest cost has gone down. On the other hand, if you’re a pensioner living on your savings, your income has shrunk. The other important threat is that because central banks pushed interest rates so low, people moved out the risk curve to get the returns they needed. People used to get 6 or 7% from U.S. Treasuries. Now they have to move to riskier investments like high yield bonds to get the same return.

A field where Oaktree Capital has great expertise is credit investing. How hard is it to still find attractive investments in the credit space?

For bargain hunters like us it’s a challenging time. We like it better in the crisis, when everybody thinks the sky is falling and everybody is willing to sell things for a fraction of what we think they’re worth. Today, there is no panic and no worry. Everybody can refinance. There is little distress. The default rate on high yield bonds has been very low for the last four years. So it is slow going for us. But we’re harvesting. The assets we own have become very valuable because we bought them in a time of worry and now we can sell them at highly appreciated prices. And although it’s not easy there are still certain areas where we are investing: For example real estate, Europe and shipping.

And what’s your outlook for the bond market?

I remember very well one loan that I had in the early eighties when the interest rate reached more than 22%. So over the last thirty three years, bond investing has been very successful with interest rates declining. But this can’t go on much further because interest rates are down to almost zero percent now. The one thing I am pretty sure of is that interest rates can’t go below zero. It’s not impossible to have negative interest rates, by the way, but it’s unlikely. The other point is that the conditions of the markets always change and we don’t always know how they’re going to change. Most people agree that there is a very high chance that the Fed will continue to taper its bond purchases. But we don’t know what the effect will be. In other words: Everybody thinks tapering will make interest rates rise. But maybe interest rates already have risen in anticipation of the tapering, so that the event of the tapering itself will not cause a rise. One thing you can never be sure of in the investment world is «if A, then B».  Processes and linkages are not always predictable,

Even if the Fed is scaling down QE3 gradually it will continue with a very easy monetary policy. And since central banks around the globe keep on printing cheap money, many investors are fascinated by gold. What are your thoughts on the archaic metal?

At the end of 2010 I put out a memo about gold called «All That Glitters». My conclusion was that there is no intelligent way to invest in gold. Here’s what I mean: A professional tries to invest by looking at a company and figuring out how much money it makes and how much money it is going to make in the future. Then he figures out what this company is worth and compares the current price to that value. But you can’t figure out what gold is worth. It doesn’t really have much practical use and it doesn’t produce income. You might say: Gold (Gold 1321.9 -0.71%) is a good buy because it’s a store of value, it protects against inflation, and it gives comfort in times of panic. So you argue that’s a good reason to buy gold today at $1300. But the trouble is that all those things were also truth when it was at $1900, and the person who bought it there has lost a third of his money. Therefore, you can’t invest intelligently in gold. There is no way to translate those virtues into a dollar figure. By the way: If you take the word «gold» and you take away the letter «l» then you have god. And it’s the same analysis: Either you believe in it or you don’t.

That leads us to an essential philosophical question. What’s the role of luck in investing?

Luck is extremely important. Skill, hard work and perseverance are all very important. But you need luck, too. Sure, you can maximize your chances of success by doing good analysis and making good decisions. But that doesn’t mean they’re going to work all the time, since the world is not an orderly place and randomness plays an important part. One of the first things I learned at university is that you can’t tell from the outcome whether a decision was a good investment decision or a bad investment decision because of the role of random and luck.

So how can we even tell who’s really a good investor and who’s not?

I always like to point out that nobody does their own dental work, or their medical work, or their own legal work. Therefore, in investing, like in any other field, you should hire a skilled professional because it’s not easy. Let me correct that: it’s easy if you want to do average. You can buy an index fund or a portfolio of average mutual funds and you get average results. But success in investing for me is not to be average; it’s to be above average. That’s the part that is hard. Investing is a mental activity in which you have to double think at what I call the second level, since your job is to out-think the others and most things are counterintuitive. That’s not true in a physical activity like bridge building or tennis, for example, in which you don’t have that level of psychological and emotional complexity.

But then again, to win a grand slam tennis tournament like Wimbledon it’s also not enough to be average.

First of all, unlike in investing, there’s not that much luck in tennis. A pro like Roger Federer knows exactly where the ball is going to go when he moves his shoulder, his elbow, his hip and his legs in a certain way. But in investing that’s not true. Outcomes aren’t fully predictable or dependable. And there’s more: When Federer plays he tries to hit winners. If he does not hit a winner and gives an easy return, Nadal will stuff it down his throat. But when you and I play together, I don’t have to try to hit winners. I can beat you by not hitting losers. I’m just going to keep the ball in play. I put it every time back knowing that if I can do it twenty times you’re finally going to hit the ball into the net or off the court. So I don’t have to hit a winner. I only have to avoid hitting a loser. And that’s our motto at Oaktree Capital, too. We want to make a large number of competent investments and have none of them to blow up. And if we avoid the losers, the winners take care of themselves.

Is that also true for your personal investment portfolio?

I am a conservative investor. My ownership of Oaktree Capital and the income I derive from Oaktree’s success and my investments in Oaktree funds is very substantial. So I’ve never felt the need to press up my risk exposure. I am not one of these people who feel that every dollar has to be fully employed at maximum return every minute. I derive a lot of comfort from having liquidity and a dependable portfolio. Before the crisis, I used Treasuries for virtually all my money that was not invested in Oaktree. That allowed me to get a return of around 6% with total safety. Today, if I want to invest in Treasuries with one to five year maturities I only get 1%. That’s not enough because after taxes and inflation I lose money. So the answer is that I have increased my active investments. I’m still not maximally aggressive. By necessity, like everybody else in the world, I’ve moved out the risk curve – but in my case with caution.

 

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Fri, 02/28/2014 - 15:50 | 4490463 Satan
Satan's picture

I approve of this message.

Fri, 02/28/2014 - 16:40 | 4490779 New England Patriot
New England Patriot's picture

Jesus Christ: "In the End, The Devil Never Wins"

Fri, 02/28/2014 - 17:42 | 4491169 Wait What
Wait What's picture

the real world: "In the end, the devil ALWAYS wins"

fixed it for ya

Fri, 02/28/2014 - 18:01 | 4491331 mmanvil74
mmanvil74's picture

I only have one question, did Oak Tree Capital outperform SPX ETF in the last year, last two years, last x years?  And I want the answer AFTER deducting management fees and other costs of doing business with Oak Tree Capital.  

These guys sounds professional and intelligent while markets are good but when markets tank the 6% - 8% p.a. they earned for the last five years is gone, but the fees they charged (as Howard Marks correctly explains) are "quite substantial" and are not gone but safely tucked away in safer investments.  So he sleeps well at night regardless of what happens to investors' funds and when (not IF) SPX nose dives and when (not IF) bond funds nose dive, investors will wonder why they paid said "professional" so much in fees. 

The analogy of going to a doctor for professional advice is equally deceptive - mainstream doctors pump you full of drugs, charge exhorbitant fees, and generally do damage to most people's health.  

Yes, the devil always wins if you make a contract with HIM, which in most cases you can recognize HIM, because HE will be dressed up in a nice suit, wear a nice watch, and convince you that HIS professional fees are worth every penny, when HIS real and only profession is the ability to be deceivingly convincing.

Sat, 03/01/2014 - 00:43 | 4492633 lasvegaspersona
lasvegaspersona's picture

mister mman

you sound experienced so I'll ask...how do I as a physician get to "charge exhorbitant fees"???

I must be doing something wrong!

I have contracts with all my insurance companies that max the allowable I can collect from a patient for a given level of service.

Also, I don't seem to be able to make anything extra by "pump you full of drugs"...how do I increase my income by bad medicine?

I want to get rich but whenever I see my other doctor friends cutting corners they seem to wind up in court or in the newspaper.

Can you tell us how your program works? I've never actually seen the plan you describe lead to any success in medicine.

thanks

a lowly, not quite poor, not really rich, doctor...

Sat, 03/01/2014 - 11:40 | 4493328 Future Jim
Future Jim's picture

I believe you. From your experience, why is health care so expensive?

Sat, 03/01/2014 - 11:54 | 4493369 TPTB_r_TBTF
TPTB_r_TBTF's picture

 

 

> I have contracts with all my insurance companies that max the allowable I can collect from a patient for a given level of service.

 

If you were any good, you could limit your services to private patients only.

 

> Also, I don't seem to be able to make anything extra by "pump you full of drugs"...how do I increase my income by bad medicine?

 

Instead of "over the counter" drugs, try pumping "behind the counter" drugs.

 

> I want to get rich but whenever I see my other doctor friends cutting corners they seem to wind up in court or in the newspaper.

 

Be more careful.

 

> I've never actually seen the plan you describe lead to any success in medicine.

 

Keep trying... donT give up!


Fri, 02/28/2014 - 18:01 | 4491332 negative rates
negative rates's picture

When the devil is in the details, you actually lose that one.

Fri, 02/28/2014 - 22:05 | 4492374 TBT or not TBT
TBT or not TBT's picture

Come on, an obvious Animal House reference the week Harold Ramis passes? Jesus.

Fri, 02/28/2014 - 16:57 | 4490891 Kirk2NCC1701
Kirk2NCC1701's picture

Damned Luciferians!

Fri, 02/28/2014 - 22:59 | 4492489 BLOTTO
BLOTTO's picture

"In the End, The Devil Always Wins" ?

.

False and Impossible

Fri, 02/28/2014 - 15:53 | 4490476 Cognitive Dissonance
Cognitive Dissonance's picture

Talking his book with one eye firmly on the growing realization that the party will eventually end. How many money managers are speaking with forked tongue nowadays? On the one hand there is more to run, on the other caution is warranted.

Sounds like he is setting up his excuses ahead of time.

Fri, 02/28/2014 - 16:09 | 4490534 Greenskeeper_Carl
Greenskeeper_Carl's picture

Ya with advice like that I could be an investment guru too. Here is my advise. " the S&P could easily rally another 200 points this year, allowing investors to make another 10% as the P/E really hasn't run away to the upside too much so far, leading me to believe this bull still has legs. " a few minutes later I offer this advice. " with more and more retail investors piling in, this tends to mark a too in the market, leading me to question just how much more money on the sidelines exists, as well as the possibility of some profit taking around S&P 1900, which, along with the fed reducing or ending its bond purchases, could bring about a decline to around the 1700 level"

This stuff is easy, I'm right either way. Now when is my time slot on cnbs?
Edit: I forgot the obligatory "gold doesn't pay any dividends, and no one really understands it, so you definitely shouldn't buy any". NOW I'm CNBS material.

Fri, 02/28/2014 - 15:59 | 4490498 Smiley
Smiley's picture

The Devil doesn't win anything but a good laugh at your expense; all he does is a hold up a mirror in front of you and you do the rest.  The evil people are the ones who have convinced themselves that success is only one slimy scam job away.

Fri, 02/28/2014 - 17:43 | 4491189 Wait What
Wait What's picture

don't tell Bernanke that, he might have a heart attack.

Fri, 02/28/2014 - 16:08 | 4490555 Hongcha
Hongcha's picture

Trust and mistrust alike ruin men.

 -- Hesiod, Works and Days, Book 1, Line 372.

Fri, 02/28/2014 - 16:59 | 4490898 Kirk2NCC1701
Kirk2NCC1701's picture

"Proceed on Principle, rather than Trust or Mistrust" - Kirk

Fri, 02/28/2014 - 16:14 | 4490596 Bastiat
Bastiat's picture

 

 

Off topic but the headline of this article was the first thing I thought of when I saw this: 

 

http://dailycaller.com/2014/02/28/rumors-persist-that-hillary-wont-run-b...

Fri, 02/28/2014 - 16:17 | 4490629 Downtoolong
Downtoolong's picture

I’ve moved out the risk curve – but in my case with caution.

You’re either out the risk curve or you’re not. Tiptoeing across the tightrope doesn’t make it any less risky.

Fri, 02/28/2014 - 16:31 | 4490705 Dr Benway
Dr Benway's picture

Prices weren't "ridiculously low" in 2008, they weren't allowed to sink to fair value.

 

And this is exactly what set the stage for the subsequent bull run: the widespread belief that prices would never be allowed to sink to fair value.

Fri, 02/28/2014 - 16:27 | 4490710 realWhiteNight123129
realWhiteNight123129's picture

Problem is that debt is senior to equity, and private debt today is higher than in 1931. But in 1931 you did not have Gov debt. So the total of debt + Equity is much higher than probably at any period of time, debt and equities are promisses of future cash flows which will ahve to be extracted from the future. The problem is that the GDP is really small in relation to teh future promises of cash flows (debt plus equity). In a country which has no debt, say after hyperinflation, if the Market CAp is 150% of GDP and total debt are at 30% of GDP, it is not the same as if you ahve Market cap at 150% of GDP and debt at 350% of GDP. Not the same at all. So measuring P/E and ignoring teh stockpiles of debt ignores that debt is senior to equities. The only way to preserve some value in equities at the expense of debt is money printing. If you do not print money you have 1931 or Cyrpus, in that case Debt retains some value and Equities are wiped-off clean. Either way the sum of Debt + Equities will shrink in relation to GDP, it could be that nominal GDP rises enormously because the Dollar sinks. In that case real GDP could be flat or sinking....

Fri, 02/28/2014 - 16:45 | 4490819 RaceToTheBottom
RaceToTheBottom's picture

Your post made far more sense than this article riddled with its logical mistakes and spelling errors.

Fri, 02/28/2014 - 22:50 | 4492470 Urban Redneck
Urban Redneck's picture

Massive misallocation of capital based on manipulation of the tax codes to suit the feeding requirements of a fractional reserve Frankenstein. But the addicts, individually and collectively, cannot bear the pain of debt withdrawal while maintaining basic functionality.

You can lock an addict in a padded cell and force them to withdraw cold turkey. Packing the 10 people in the cell going through withdrawal simultaneously, is likely to produce very ugly episodes, and when expanded to a global level it is almost unimaginable, but there's also no one left to mind and support the addicts.

It's hard enough when the (for better or worse) the IMF imposes discipline on a single unruly debt addict nation, but it has always been done with a relatively high ratio of support group members per addict.

Fri, 02/28/2014 - 16:36 | 4490750 RaceToTheBottom
RaceToTheBottom's picture

Title:

"In The End, The Devil Always Wins"

Content:

"In the end, the devil usually wins."

 

Make up your mind, or basically you are saying, whatever the fuke I write makes no difference, because it is just a bunch of Huuuueeee

Sat, 03/01/2014 - 10:05 | 4493046 jay35
jay35's picture

Came here to ask the same thing: "Always" or "usually". Which is it? The quote says "usually", the blog poster writes "always". -__-

Fri, 02/28/2014 - 16:38 | 4490775 Oldwood
Oldwood's picture

Bullshit. The only way to be sure not to lose is to not gamble. Bet on sure things like yourself, something you have actual control over. Everything else is a game set up deliberately to separate you from your money.

Fri, 02/28/2014 - 16:43 | 4490800 falak pema
falak pema's picture

the Dualists had a novel interpretation of destiny and intemporality. 

Evil and Good had a 50/50 chance of winning or losing you in the after-life.

It all depended on your free will and not on predetermined God's great scheme.

'Cos the god of good and the devil were on equal terms.

Hows that? Leg before wicked? 

Fri, 02/28/2014 - 16:54 | 4490876 slightlyskeptical
slightlyskeptical's picture

Opportunity cost just as important as not losing money? Bullshit!

Fri, 02/28/2014 - 17:01 | 4490914 wmbz
wmbz's picture

It's very simple, one very special emotion... It is called greed.

Fri, 02/28/2014 - 17:04 | 4490921 Kirk2NCC1701
Kirk2NCC1701's picture

No need for Devil, God, gods or other superstitions or "pacifiers-for-adults":

"In the end ENTROPY wins the War.  But Order has been known to win Battles." -Kirk

Fri, 02/28/2014 - 17:15 | 4490990 ziggy59
ziggy59's picture

He certainly should know...Wonder how his $ 52.5 million apptment on E 71 st and park is doing?
Devil always wins....

Fri, 02/28/2014 - 17:47 | 4491142 Wait What
Wait What's picture

the greatest trick the Fed ever pulled was convincing the world the bubble didn't exist.

-Baudelaire via Verbal Kint aka Keyser Soze.

when it gets exposed as the fraud it has always been, no higher power will punish the Fed, but the devil will laugh his ass off at the misery it has created.

Fri, 02/28/2014 - 18:03 | 4491347 eddiebe
eddiebe's picture

Everyone that has two nickles to rub together is forced to be an investor.  Even if you stay in cash under the mattress you are gambling that either a thief or a fire or inflation will get it. Invest in PM's, the banksters and polititians devalue, outlaw or steal it. Invest in Stocks the Ceo's and management steal the value or it gets manipulated and diluted or crashed. Bonds, ditto. Treasuries? At this point? Hahaha! Land? Hear of Taxes? 

See what I mean? So yea, for sure. The devil always wins.

Fri, 02/28/2014 - 18:49 | 4491614 bunnyswanson
bunnyswanson's picture

In the end, D "evil" stands alone.

Fri, 02/28/2014 - 19:28 | 4491822 satoshi123
satoshi123's picture

In the end AIPAC will not win. They will lose.

Assholes always get what's coming them, so called 'chickens coming home to roost'.

Just look at Israel today, the BITCOIN fraud all ran by Karpele and Shrem,... Israel has become a nation of Madoff's, because they can get away with it, in time nobody even bothers to do honest work, and everybody becomes a Winkelvoss, or a facebook wunderkid, and you end up with a dysfunctional nation of Foie-Grau eaters.

Forget about the USA, its a penal colony of retarded hairlips, ... aka Israels private mercenary army.

Fri, 02/28/2014 - 20:40 | 4492101 Atomizer
Atomizer's picture

Howard Marks,

If you had a gun jammed into your mouth. Would that be your last words? Or would you beg for your life by offering Federal Reserve counterfeited money to sell yourself off to another fallen angel?

 

Riddle us with your thoughts..

Fri, 02/28/2014 - 21:59 | 4492359 LooseLee
LooseLee's picture

"the fifth anniversary of the end of the equity bear market."---ha, ha. Every year it has been 'delayed' will be added-on to the continuation. Fools...Humans are Morons (especially Pollyanna Bulltards) and deserve what avaits them as a 'normal' 16 year 'Bear Market' drags out for 20+ years (hint, hint 2020 or beyond). Ha, ha

Sat, 03/01/2014 - 00:30 | 4492619 mumbo_jumbo
mumbo_jumbo's picture

"So equities were extremely cheap, as I wrote in March 2012"

 

well i guess when one can change the accounting rules and make this or that valued at whatever you want one can look 'cheap' and or very 'profitable' on paper.  why do these guys just play along and never bring up what has allowed this market to "look" the way it does?

Sat, 03/01/2014 - 00:51 | 4492642 lasvegaspersona
lasvegaspersona's picture

If you subtract out new fed money (that the government got to spend) from the GDP I get 20 quarters of negative growth. 

By my calculations we have been in a depression for 5+ years.

I do not understand how the stock market has nearly trippled since then. (I do actually, the fed made em do it).

With flat corporate revenues, stock prices rising on cheap borrowing and buy backs I fail to see how any rational person could put money into stocks unless they believe the fed will rapidly commit to hyperinflation. All this guy is saying is 'there are enough idiots out there that the market could go up for a bit longer.'....not one word of how the market go to where it is.

Sat, 03/01/2014 - 11:39 | 4493325 TPTB_r_TBTF
TPTB_r_TBTF's picture

are you implying that Bernanke prevented The Even Greater Depression?

Sat, 03/01/2014 - 11:04 | 4493205 Graph
Graph's picture

"if the Tartars were to invade Europe nowdays, it would have been extremely difficult task to explain to them what kind of being is someone whom we call a "financier"

!7th Century French thinker - footnote quote in "The Capital".

Remember flying in early 2009. Pages of Finacial Times all about hearings with the heads of the top banks, like "what happened?". Names that rest of the world never bothered with became now mainstream. Tired of just waching at that human garbage with their raight hands raised in oath I looked through the window into enormeus but fragille looking wing, slightly flapping. That wing with it's twin on opposite side was holding safely 300 or so buts 30.000 ft in the air.For the rest of long flight I was thinking about who is THAT man who made it possible versus who are THOSE people that I was reading about?

When that ridlle is solved The Devil will lose.

Sat, 03/01/2014 - 11:59 | 4493321 Graph
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Story of parked cars in front of EVERAGE home:

Construction time: Pile of beat-up trucks and cars. Ocassional modest sedan of an architect and engineer, building inspector's City Truck.

Sale: Realtor's Brand new Lexus, BMW or Audi.

Owner occupied: Whatever. If as realtor than much older models.

Pool and yard maintenace: modest trucks

Remodel: Same as construction.

Refinace: Same sa realtor's.

Sale: .....

Got the picture? Note also who is subject to real market competition.

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