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David Rosenberg: "It's Time To Start Calling This For What It Is: A Modern Day Depression"
By now only the cream of the naive, Kool-Aid intoxicated crop believes that the US is not in either a deep recession, or, realistically, depression. For anyone who may still be on the fence, here is David Rosenberg's latest letter which will seal any doubts for good. It will also make it clear what the fair value of the stock market is assuming QE3 fails, which it will, and the market reverts to trading to fair value as predicated by bond spreads. To wit: "If the Treasury market is correct in its implicit assumption of a renewed contraction in the economy, then we could well be talking about corporate earnings being closer to $75 in 2011 as opposed to the current consensus view of over $110. In other words, we may wake up to find out a year from now that whoever was buying the market today under an illusion of a forward multiple of 10x was actually buying the market with a 15x multiple." And since we are in the throes of a deep depression and a 10x multiple is more than generous, applying that to $75 in S&P earnings, means that the fair value of the S&P is... we'll leave that to our readers.
From Breakfast with Rosie, of Gluskin Sheff
We just came off the weakest recovery on record despite the massive amounts of stimulus that the U.S. government has delivered in so many ways. That the yield on the 10-year U.S. Treasury note is down to 2% already speaks volumes because the last time we were at these levels was back in December 2008 when the downturn was already 12 months old. A period like the one we have endured over the past six months when bank shares are down 30% and the 10- year note yield is down 130 basis points has never in the past foreshadowed anything very good coming down the pike. If market rates are at Japanese levels, or at 1930s levels, then it's time to start calling this for what it is: A modern day depression.
Look, that entire period from 1929-1941 saw several quarters of huge bungee-jump style GDP growth and countless tradable rallies in the stock market.
But that misses the point.
The point being that a depression, put simply, is a very long period of economic malaise and when the economy fails to respond in any meaningful or lasting way to government stimulus programs. A series of rolling recessions and modest recoveries over a multi-year period of general economic stagnation as the excesses from the prior asset and credit bubble are completely wrung out of the system. In baseball parlance, we are in the third inning of this current debt deleveraging ball game.
You know you're in a depression when interest rates go to zero and there is no revival in credit-sensitive spending.
The economy is in a depression when the banks are sitting on nearly $2 trillion of cash and yet there is no lending going onto the private sector. It's otherwise known as a 'liquidity trap'.
Depressions usually are caused by a bursting of an asset bubble and a contraction in credit, whereas plain-vanilla recessions are typically caused by inflation and excessive manufacturing inventories. You tell me which fits the bill today.
When almost half of the ranks of the unemployed have been looking for a job fruitlessly for at least six months, you know you are in something much deeper than a garden-variety recession. True, we can't see the soup lines; the soup lines are in the mail — 99 weeks of unemployment cheques for over 10 million jobless Americans. Don't be lulled into the view that we are into anything remotely close to a normal economic cycle.
Basically, in a depression, secular changes take place. Attitudes towards debt, discretionary spending and homeownership are altered for many years, or at least until the scars from the traumatic experience with defaults and delinquencies fade away. That is why we saw existing home sales slide to 15- year lows and new home sales to record lows despite the fact that mortgage rates have tumbled to their lowest levels in modern history. There is no economic model that would tell you that declining mortgage rates should lead to lower home sales.
More fundamentally, in a recession, the economy is revived by government stimulus. In depressions, the economy is sustained by government stimulus. There is a very big difference between these two states.
In a recession, everything would be back to a new high nearly three years after the initial contraction in the economy. This time around, everything from organic personal income to employment to real GDP to home prices to corporate earnings to outstanding bank credit are still all below, to varying degrees, the levels prevailing in December 2007.
Let's be clear: After all the monetary, fiscal and bailout stimulus, the economy should be roaring ahead, as would be the case if the economy were coming out of a normal garden-variety recession. The fact that there has been no sustained response to all these efforts by the government to turn things around is testament to the view that this is not actually a traditional recession at all, but something closely resembling a depression. That, my friends, is exactly what the bond market is signaling, with Treasury yields rapidly approaching Japanese levels. Just because the stock market embarked on a stimulus-led speculative two-year rally, which ended abruptly in April 2011— does not change that fact.
For all the chatter about whether the recession that started in December 2007 ended in mid-2009, here is what you should know about the historical record. The 1930s depression was not marked by declining quarterly GDP data every single quarter. In fact, the technical recessionary aspect to the initial period following the asset and credit shock goes from the third quarter of 1929 to the first quarter of 1933.
I can understand how emotional the debate can get over whether or not we have actually just stumbled along some post-recession recovery path or whether or not this is actually a depression in the sense of a downward trend in economic activity merely punctuated with noise that is influenced by recurring rounds of government intervention. The reality is that the Fed cut the funds rate to zero, as was the case in Japan, to little avail. Then the Fed tripled the size of its balance sheet— again with little sustained impetus to a broken financial system. Government deficits of nearly 10% relative to GDP, or double what FDR ever ran during the 1930s, have obviously fallen flat in terms of providing any lasting impact to the economy.
This is going to sound like a broken record but it took a decade of parabolic credit growth to get the U.S. economy into this deleveraging mess and there is clearly no painless "quick fix" towards bringing household debt into historical realignment with the level of assets and income to support the prevailing level of liabilities. We are talking about $5 trillion of excess debt that has to be extinguished either by paying it down or by walking away from it (or having it socialized). Look, we can understand the need to be optimistic, but it is essential that we recognize the type of market and economic backdrop we are in.
The markets are telling us something valuable when (after a period of unprecedented government bailouts, incursions and stimulus programs) the yield on the 5-year note is south of 1% and the 10-year is down to 2%. Instead of contemplating over how attractively priced equities must be in this environment, market strategists and commentators would bring a lot more to the table if they tried to decipher what the macro message is from this price action in the Treasury market. Conducting stock market valuation analysis based on unrealistic consensus earnings assumptions does nobody any good, especially when these estimates are in the process of being cut, and at a time when the Treasury market is telling us we are the precipice of another recession.
If the Treasury market is correct in its implicit assumption of a renewed contraction in the economy, then we could well be talking about corporate earnings being closer to $75 in 2011 as opposed to the current consensus view of over $110. In other words, we may wake up to find out a year from now that whoever was buying the market today under an illusion of a forward multiple of 10x was actually buying the market with a 15x multiple.
How's that for a reality check?
This augers for capital preservation, defensive orientation in the equity market and a focus on income-yielding securities; something we've been advocating for some time.
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Itsdanger- 'Long lineups for food are now done at Walmart at midnite on the last day of the month when everyones food stamp 'credit cards' get refilled....go check it out sometime!
'Its not a depression because there arent dead bodies strewn all over the streets'...I dont remember those scenes from the Great Depression.
'War brewing somewhere, we're not there yet'....Uh, do you pay any attention to the mid east at all?
Remove the 0% ZIRP, the free money overnites to the banks, set that 0% rate to just 2% and guess what youd see then? Instant total collapse and complete chaos.
Middle east wont have war for 1 major reason, they dont have the military capability to pull it off. People have been saying there will be a war there for a long time, hasnt happened yet. Im talking a major conflict not the persian gulf or iraq. Those were minor battles in comparison to major wares. Perhaps you need to review your history from the depression. It was a lot worse than it is today. Depression talk is just Obama BS to fulfill his agenda.
.
I see lots of full football stadiums.
An Economic Depression comes in stages. We are still in the beginning stage. Entertainment allows people to forget about their problems for a little while. Baseball and Movie Theatres did well all through the Great Depression. This one is no different. Food Stamps have replaced food lines. If the Arab Spring is not a huge war brewing you have lost your mind.
exactly, this is a picnic compared to whats comming
These will be the good old days soon.
i dont see a depression, i see plenty of really poor people well fed through snap program, housed through section 8, innoculated through medicaid, and using the latest gadgetry available. where is this depression you speak of?
Yep, and how long does paying around 50% of the people free food and a free home REALLY go on for under these economic conditions?
Hello, 12 member Secret Uber Congress, 'We're accountable to no one, you people remember all those checks that show up in the mailbox from the Gubment to cover all your monthly living and retirement expenses? Well take a picture, it will very soon be the last you see of them'.
Don't hold your breathe on that. The checks will go on. A sizable percentage of Americans have been receiving checks for a very long time. The current situation is not a huge departure from the past 20 years when you include all of the funding systems. What's that? You 'work' for a living? What makes you think that your 'work' has all that much value? Maybe you are just being 'babysat'.
Kito,
When I see NO economy to speak of, 25 million unemployed/under employed,and NO hope of change anytime within the next 5-10yrs, Icall that a Depression.
IF it were not for the FED GVT, doling out 99wks + 99wks, etc,etc, etc, YOU would see everything that makes a living hell.
Stop the free shit, and watch.( new #'s 46 million folks are now considered poor).if the Gvt got out of this, and stopped QE to Infinity, the streets would be full of mobs, and homeless people.
I get so FREAKING tired of these wealthy talking heads, acting like eveything is not bad, but it will get better.(they have ZERO issues)
Recession is when your neighbor loses it all, Depression is when you do.( a lot of YOU's out there).
doszap--youre agreeing with me. take away everything AND then you have a depression. until then, its not a depression.
by what measure do we have of what a depression defines? its hard to compare--no prior depression had its citizens taken care of to the extent they are today. do you measure a depression by the struggle of the people? is it by steep extended negative gdp growth?
anecdotely, i dont see it. seems more like a heavy malaise going on right now.
The depression 2.0 is presenting differently. That should be no surprise given how much the depression 1.0 has been studied and dissected.
Debt creation is temporarily papering over the deflation in asset values. Looks like that may hit a speedbump unless the Fed goes big.
Of course if you really want to witness a global depression with old school suffering and population growth rolling over, cast your vote Ron Paul.
population density = 1/Liberty
Come walk a mile in my shoes Kito.... I make twice what I did in 2000 and I'm struggling harder now than then. I don't get foodstamps or housing allowances. I make to much. I'm working class not middle class. This economy sucks !!! Food is up, fuel is up, energy is up, and my dollars don't buy shit...
Now I'm really depressed.
Maybe I can slip in a 3 martini lunch.
OK, I am learning to post earlier in the thread. This is a repost, help me out here, can this get some traction or not. Thanks in advance.
So what are we going to do about it?
The first step to solving a problem is to define it. What are you trying to solve? This can be the most thorny proposition to achieve but any attempt to circumvent in a curcumstance where you actually want to solve the problem it will ultimately result in going back and doing it for real.
Neutralization of individuals and thereby a group of individuals can be achieved very easily. There are many techniques but one of the easiest is to provoke an emotion that clouds judgement and causes offense. Getting that offended individual back on track can be exceedingly difficult and will try your patience.
Without discipline and good judgement, we fall into the self-neutralization catagory without effort.
What is the problem that we all seem to talk around? Offenses of this and that are overwhelming but what actually needs to be solved?
Here is my problem statement proposal. "We have lost the republic."
Sample subset statements supporting the root issue: We have lost common knowledge of what a republic is. Government has devolved to institutional theft for self aggrandizement and wealth collection at the expense of the "sheeple".
The next question is: "Do you want it back"
Followed by: If so, how do we go about it?"
Notice that the Federal Reserve has not entered into the question yet. It appears to me to be that it is not part of the strategy but rather a tactical front used for what it can accomplish not what it is.
Let's try to stay focused. Statements that play to symptoms of the existing problems may be TRUE but are they USEFUL at this point in time? Would they go away if we focused on the root of the problem. If so and the symptom is not productive then let's not take it further and neutralize ourselves of the energy that could be better applied toward addressing the tactical tools (like the Federal Reserve) for the strategic purposes of recovering the Republic.
I am appealing for some thought and emotional discipline toward goals we can all benefit from. Let's not give our energy willingly to the opposition.
Zadok
What you are describing is known as problem resolution. So you have identified the problem, ie "lost republic" the next step is defining root cause. "Why" did we lose the republic?
I just want to see where this goes...
@ DirtMerchant
I appreciate the response.
Good, valid question, however I suggest that the 'How do we get it back?', which is future focus on what we can do about it is better than 'Why did we lose it?' which is backward focused.
But...I suspect a complete knowledge of where it went wrong will play a strong hand in how we get it back because those lessons define the tactics used the change our present direction.
Thank you for engaging...
Zadok
to determine the answer to the problem, usually you have to understand how the problem occurred, ie root cause. Typically its a design failure, so to "get it back" the answer is redesign so the flaw is removed. But in the case of our country, the design was actually pretty sound, the flaw did not occur in the design. Banks and Government conspired to subvert the design, and continue to so even more blatantly with impunity. So root cause analysis would indicated that the root cause is Banks and Government operating outside the design rules.
So how to get the Republic back?
I am pleased to get some solid responses. Thank you.
I am in agreement with your assessment, design not flawed, execution overtime has deviated from design intent, resulting in undesireable (from most but not all people's perspective).
Operation outside and beyond design parameters is correct, why did that occur (back to your question) and what do we do TODAY to change it?
It seems to me that some form of education on a massive scale is required.
First motivation is required before that is possible, are we there yet?
Zadok
You my friend are thinking too narrowly, in case you hadn't noticed, the rest of the world is also up to their balls in it. We haven't lost the Republic, we have lost the future.
We are struggling to stay upright as the winds of change increase in velocity. We are crossing the "plateau" of peak oil. 2006 was the peak of oil production world wide, we are slowly ratcheting downward. Cheap energy was the real reason for all economic growth in the last 125 years.
Without cheap oil this world doesn't work anymore, literally and figuratively. As oil prices go up, productivity goes down. Recession follows recession, deeper with every cycle, longer down and shallower up until political problems become so extreme a resource war begins somewhere. Then another and another. At some point there will be 2 dominant players left, each who controls only 1/2 the oil and wants the other half.
big war then, less people means oil lasts longer, big war means less people.
I wish it was a simple as losing the republic. I fear it is not.
Zadok - it is an interesting question , perhaps one that doesnt belong in this thread, but interesting nonetheless.
I will assume you are not familiar with the work of others on this topic and will direct you to sites where there are efforts to answer your question.
If you still have faith in the national voting process, you can support Ron Paul, Gary Johnson, or get involved in something like www.GoooH.com which seeks to turn the house of representatives.
If you have lost faith in national solutions (Will DC really limit itself? Unlikely) you can give your attention and support to sates rights / nullification efforts through groups like www.thetenthamendementcenter.com or www.nullifynow.com events.
If you have lost faith in the states (since they take federal money and have essentially no army or means of effective resistance) you can emigrate to a country with better near term prospects for liberty lovers. Lots of info on this from folks like Simon Black at www.sovereignman.com
If you prefer to stay and resist, you can link up with www.oathkeepers.com , www.resistnet.net and you can work on building resilient communities with like minded friends from http://alt-market.com/ or www.survivalblog.com or www.chrismartenson.com
Sites that attempt to address these issues from a Christian perspective include:
www.chuckbaldwinlive.com
http://durablefaith.com/2010/10/08/how-then-shall-we-live/
I guess the good news is there are folks asking similar questions and seeking answers.
Hopefully this comment will at least cause some others to chip in with some thoughts.
@ durablefaith
I appreciate your comment, I am sure it took a few minutes to put together.
In response, I suggest that this is a good forum to test the response regarding moving from distracting discussions to something more substantive.
Wrt God, consequences, and such, I think He has it covered. Malachi 3:5 I do not want to tread within His role.
What point is clammering for the abolition of the FED when it goals are nearly complete? By the time that movement gains sufficient traction, it will be closed and shifted to some other scheme not because of pressure but rather because it has 'met expectations'. Should we all cheer and pat ourselves on the back... or look a bit further forward to anticipate and set in motion alternative pressure? I am of the opinion that the movement is too late and that we should be looking further forward than that. Not that Ron Paul is wrong, it is just that this needed to happen decades or more earlier.
Zadok
Zadok,
Your "team-building"seminars are supposed to be held in the small conference room. This room's been booked for the "Are we in a depression" symposium.
@ Miss Expectations
Perhaps, but what better place to put a toe in the water to test whether we are ready to move beyond all the various forms of distraction. What better place to see who will pick up the thread and move up? An article like this just begs the 'I have a better seat on the Titanic than you' discussions that while they might be real and possibly with merit, but are they profitable?
Who's going to pick it up?
Zadok
sounds like your experiment is falling on deaf ears, I will leave it at: yes the masses need an education, but they need discovery first and they are not suffering enough to discover yet.
@ DirtMerchant
I am going to give it till tonight but I think your question about how we got here may have been answered.
Really that was my real question, even if it was unstated.
We'll see...keep the pain coming, I guess were not there yet.
Zadok
@ DirtMerchant
Experiment concluded, 3 tries, 3 fails. If one is honest, one has to take the data as it comes.
Conclusion: Given this is a 'picked' group (compared to Yahoo for instance), it appears there is no 'discovery' or motivation for 'discovery', and therefore there will be no education leading to real problem solving. Bottom line is that there is a lot more pain required before we get to that point.
I am open to other interpretations but that is how I see it.
Best wishes,
Zadok
I hope this quote is in the vicinity of the opinions you are seeking.
"A democracy can only exist until voters discover they can vote themselves largesse from the public treasury. After that, democracies always collapse due to loose fiscal policy."
Our business demand can best described as psychotic. Sales are great for a few months and then drop to a pittance. Trying to predict inventory levels is impossible so we just keep a minimum inventory on hand and try to protect cash levels. This economy is going nowhere until there is a better future outlook and an increase in overall confidence. The ongoing political circus in DC is almost guaranteeing that confidence will not improve much over the next 15 months.
I work in a lumber yard. Our demand has shot thru the roof. On occasion.
But most of that is spilloff from the several other ones that went under in the last few years. We have to keep inventory low to preserve cash flow. Which sucks, people have got used to the whole "on the shelf" atmosphere of 5 years ago.... if you didn't have it "on the shelf" somebody else in town likely did so that was a lost sale.
On a totally unrelated note, Saudi Arabia may reduce or sever ties with the US if they veto Palestinian Statehood.
http://www.nytimes.com/2011/09/12/opinion/veto-a-state-lose-an-ally.html...
Said by none other than Ben Turki... who was USA's top ally and helped create the Arab brigade of OBL in Agfhanistan in 1979, which became the Al-Qaeda/ Taliban nebulous. So this guy is now saying, "Me and my buddies are fed up with the USA's can kicking on the Israel/Palestine issue since so many years."
This has to be appreciated in the context of the virtual military stand-off now prevalent between Turkey and Israel AND Egypt and Israel after the Tahrir square boil over. As an additional spin-off of the current financial crisis, if the EU kick out Greece from the EU and tell them "Fend for yourself you cheats, and if you die of hunger its tough shit." With Greece as the gateway to the MENA region and to the Balkans, we in Europe are pouring oil on to what may become a regional conflict if the Turkey-Israel stand-off is augmented by a Turkey-Jaded Greece stand-off. Wow! that would really ratchet up the regional fire!
Its all interconnected, the black swan cluster flocks...
Maybe he said it to make the Arab street think Saudi Arabia is more pro-Palestinian than it really is.
If government's negative free cash flow of 1.2 trillion is netting out corporate profits of 1.2 trillion is there any money really being made?
The answer is of course not--especially when government outlays doens't pick up growth. Depression, bitchez. Which is why it will be ctrl + p, ctrl + P in the ongoing effort to counterbalance deleveraging throughout the system. But what will we have when the battle of deflation has finally been won?
I'll tell you, a complete fucking disaster.
"You know you're in a depression when interest rates go to zero and there is no revival in credit-sensitive spending."
Except that money is NOT available to the populace at large. Credit cards are still at usurious rates close to - or exceeding - 20%. Mortgage rates may officially be at record lows but lots of luck getting one. The banks will take your application fees but find a ton of excuses not to write the mortgage (have seen this first hand - even when someone had a 40% downpayment and made mid 6 figures). Small businesses can't get a loan for anything. Even supposedly guaranteed vet loans are unavailable.
Those 'zero percent' funds are available only to the big boys - who are playing the market with free money and driving up commodity prices. We've given degenerate gamblers more free money after they've blown every cent of their own.
LIPSTICK ON A PIG?
"And since we are in the throes of a deep depression and a 10x multiple is more than generous, applying that to $75 in S&P earnings, means that the fair value of the S&P"
That's why 10x applying to S&P because we are NOT in
the depression. Not yet at least and never was in depression
since 1930, nice fantasy, though.
Wrong, we actually never really left the great depression at all, just been running a long series of bubbles and collapses while the FED has devalued the US Dollar 98% since then. See?
"The economy is in a depression when the banks are sitting on nearly $2 trillion of cash and yet there is no lending going onto the private sector."
I wish roise wouldn't write sentences like that. saying there is "no lending" just is not true. it's hyperbole and i think it weakens his argument at a time when the argument needs to be made very well. There is lending but it's at an incredibly reduced rate, just give us the damn data to show it is reduced and put it in historical persective. THAT would be effective. rant off.
And to be more technical, banks do not lend at all.
pods
New World Order, bitchez
Yea no doubt.
joo whirled order
Jew Envy?
I like to think that a better way to sum up our point in history:
"America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards."
-Claire Wolfe
another fitting summary would be this:
"The twentieth century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy."
Alex Carey
Hmmm, good quote. Should I consider that a response?
Zadok
Thanks for that, I had never heard of her but she sounds interesting, will have to read some of her stuff
I've hardly ever read anything by a female
the motherfucking /ES has been climbing non-stop since European markets closed...on vapor volume of course...as usual.
this has gotten so blatant and so obvious that it's insulting.
for how long can this goddamn charade go on?
A couple months? Not even until close today? Funny part is, none of us know, we're not in the club. But certainly we ARE at or very near an end game.
it's maddening. the truth is that it doesn't really much matter to me since I mainly play forex and I only play the trend therefore this obviousness makes it rather easy to trade on what I've broken down into "two session days" in that I go long USD when Europe is open and short USD when they close.
but this isn't really about my personal gain or loss. it's the bigger picture and seeing the almost constant bombardment of absolute bullshit that makes me somewhat crazed. it is a very strange feeling to be having a good day 9as far as making money goes) but still feeling like you want to throw your computer monitor out the window or just beat the fuck out of the first banker you cross paths with.
in the end, I guess that feeling comes from feeling (or knowing) that my income is derived from my participation in a fraud.
it's not a good feeling.
...and let's play connect the dots. Why don't algo's ramp the paper PM markets? Simple, all roads lead back to the banks and bernank.
It's unbelievable how they get away with this shit in broad fucking daylight.
Have you noticed that the turn up in the /ES, the last 3 days, has been btwn 10:45 and 11:15 am. Co-ink-y-dink? Right.
“The market can stay irrational longer than you can stay solvent.”
about the only good thing that J.M. Keynes ever said/did.
- Ned
Just remember guys. When all hope is finally lost, it will be time for those with a long view to ....well...go long stocks.
I would avidly start investing in the s and p with a 3.5% yield. I will dollar cost average all the way down to hell and back starting there.
that is right. people will be shocked, shocked! to see taht there's nothing the policy makers and central bankers can do to stop the collapse.
higher taxes on declining incomes and escalating bankruptcy and foreclosure - for the next 40 years. its going to be really interesting to see how society managaes to get along without money.
i hope you all have saved a few million $USD - cash - and have an off-the grid house - ideally on a beef-producing tropical island. everyone else .... well .... good luck to you ;(
Exactly. I cant wait to see real soon how folks fill their Hummers with gas and food without money, after the Uber Congress cuts everything with a chainsaw, and then raises taxes and rates!
I'll really miss starbucks, smokes and the internet....
I can do without Starbucks although I get one once in a while, losing the internet will probably be a huge blessing, I dont smoke but I am researching how to build a still...turn a bunch of corn into moonshine liker.
I had to quit drinking, pretty much every time I drank I ended up showing my ass, wife didn't like it much.
Haven't quite got the "few million" but I do have a place on a gorgeous beef-producing tropical island (Vanuatu):
http://rokjok7.wordpress.com/2010/10/23/s-s-house-vol-2/
About $150K for an acre of waterfront land with a coral reef full of fish out front, spring water, town electric, broadband internet, and great cellphone coverage. Coconuts mangoes papaya avocado limes everywhere.
Buying land gives you the right to be a Permanent Resident.
Not that hard if you have the balls to just get out and do it.
Paul Krugman on the Colbert Report 9/12/12 called this the "Lesser Depression"
Paul Krugman The New York Times' Paul Krugman talks about the Lesser Depression and the confidence fairy's effect on the American economy.http://www.colbertnation.com/the-colbert-report-videos/396583/september-...
Of course the answer is, to paraphrase: If businesses can borrow money to create factories and jobs government can do the same. Sorry Mr. Krugman if a bankrupt company tries to borrow money they get NONE and go bankrupt especially when they have failed in every aspect of their business model. The Government is BANKRUPT and no longer should borrow because it can never get out of its hole.
Eat that, Rosenberg:
http://www.cnbc.com/id/42782844/Rosenberg_Goes_Bullish_Is_the_End_Nigh
'A modern day depression.'
Not for goverment employees and Banksters. When I see Gluskin shut its doors then we might be close to a depression. Rich cosksuckers like Rosie that have sponged a living off other peoples money for so very long need to be culled. Looking to him for advice is fucking lunacy. This guy is a part of the sytem that needs to be purged. He eats at the same table as Paulson, Dimon, Cramer, MHFT and all those other money grubbing fags.
FFS can we just hit bottom already. The secret is out. What's the point of keeping the charade going.
Bring back Rhodesia ... they knew how to run an economy unlike this Zimbabwe style crap we gots now. By the way I am richer then all you Bitchez ... I am worth 300trillian ... in Zimbawe dollars ... got it off Ebay for $8 but still Im a trillionare!!!!
Nice! I may have to go buy a couple $300 trillion dollar Zimbabwe bills off EBay for a few bucks just for shits and grins.
Hold off for a while and you can get a USD note suitable for framing
Hold off long enough and can get all currencies for framing.
I bought mine for far less so I am more of a zillionaire than you. You were ripped off.
usd/CAD double bottom rally now indicating that we are back in 2008
http://capital3x.com/?p=1301
We went from recession to Great Recession and I think we are now in the Pretty Good Depression.
Yea good if you're a kleptocrat.
Wireless Laser Bluetooth Depression 2.0.
Is there an app for that?
pods
Hey David call it a Depression, call it chicken, call it whatever the fuck you'd like. But this is the first time in the history of markets that a Depression is BULLISH for global markets!
Until it suddenly isn't.
Hey David call it a Depression, call it chicken, call it whatever the fuck you'd like. But this is the first time in the history of markets that a Depression is BULLISH for global markets!
********************
No it isn't-look at the rallies in the last depression-
http://www.online-stock-trading-guide.com/image-files/1932-stock-chart-s...
http://www.online-stock-trading-guide.com/image-files/1930-stock-chart-s...
Past performance ain't no indicator when we have grand global ponizification fuckery and Fed derivatives to the Nth and CDS's to the Nth etc. etc. etc.
Past performance ain't no indicator when we have grand global ponizification fuckery and Fed derivatives to the Nth and CDS's to the Nth etc. etc. etc.
***************
You may not know it but we had derivatives back then-in fact the first derivative created was in 1922-
They were called SDR's and they were no more underpinned then the derivatives of today-
The first paper Gold and when they were issued--to bankers only-it effectivly doubled the money supply-
People like Denninger take a wrong fork in the road by thinking we had a Gold Standard in the 30's-
It ended April 1922--
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The Genoa Conference was held in Genoa, Italy in 1922 from 10 April to 19 May. At this conference, the representatives of 34 countries convened to speak about monetary economics in the wake of World War I. The purpose was to formulate strategies to rebuild central and eastern Europe after the war, and also to negotiate a relationship between European capitalist economies, and the new Russian Communist economy (Georgy Chicherin).
Among the propositions formulated at the conference was the proposal that central banks make a partial return to the Gold Standard. The Gold Standard had been dropped to print money to pay for the war. Central banks wanted a return to a gold-based economy for easing international trade and facilitating economic stability, but wanted a form of Gold Standard that "conserved" gold stocks - meaning that the gold remained in their vaults and day-to-day transactions were conducted with the representative paper notes
http://en.wikipedia.org/wiki/Genoa_Conference_%281922%29
JJ you gonna tell me they also had some kind of HFT too? Like a million Chinamen simultaniously manipulating abacuses super-fast? It ain't the same. But all the same I stand to make nice profits if there is a crash, which I'm obviously hoping there is. Followed by GRAND RESET and PURGE!
JJ you gonna tell me they also had some kind of HFT too?
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It doesn't matter what more we have today-they cannot do anymore than manipulate in the short term-
We had the same market forces back then as we do today and we will have the same final outcome-
I agree with reset-purge and crash--just like the 30's-
When do you estimate, based on charts and stars and such?
I have no idea of when only that in the end the market will price in real value-another QE might work to lift or hold and on the other hand it might backfire and a broad realization that the US cannot grow its way out and if that sentiment goes viral-look out--
You'd be making a big mistake if you consider the bullishness in the global markets today to be anything but the gargantuan investment banks last manipulation and transfer of your funds to theirs
It makes me laugh, everyone out there convinced that while things are bad, its all good, cuz surely we got more bailouts comin that got us into this debaucle in the first place.
Well I certainly am glad to see all the Zumba and LuluLemon ad activity, at least some women are keeping their asses tight for when the shit really hits the fan and harems are selected.
Cannot argue with anything here, but I do question Sudden Debt and rare earths. If consumption continues to deteriorate, no matter how rare we will need less. But I do keep them on my scans. Jury still out on that one.
Cannot argue with anything here, but I do question Sudden Debt and rare earths. If consumption continues to deteriorate, no matter how rare we will need less. But I do keep them on my scans. Jury still out on that one.
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Rare earths are essential to missal guidance systems and the US is in short supply and I don't see diminishing chances of more wars-
Also vital in Solar-Nuclear and Auto pollution emission controls-
If China opens the markets to them-they will likely crash-
I think they fly-but that's just my opinion-
If I am China, I see the destruction of fiat currencies elsewhere and having risen from centuries of slumber see the huge opportunity to take over as the reserve currency at some point at the end of this decade and along with it, relegating the US to the same fate as the USSR, let's call us the USSA (Union of Socialist States of America). There was a "state" which took too much of the people's money, sapped any entrepreneurism from them, brain drain continues to this day, and the states fell apart as they all thought they could do better without the Central Gov. We are heading this way
P/E10 is actually about 20.3 right now...still about 23% over the historical average.
I do not understand Rosenberg's recommendation to be in defensive stocks. If he really has fairh in his own forecast he should be entirely in cash. If you really thought earnings wwere going to be $75 on the S&P and that the market would apply a 10 times multiple, why be in any stocks. If a liquidity crisis hits along the way to S&P 750 everything gets sold: stocks, longer term bonds, gold etc. In 2008, it turned out to be all one market. Why be in an AT&T, J&J or other supposed defensive stock for a 3-6% dividend when you could face a 30% or greater loss of principal.
Hey gang. If you want to get the economy rolling again give the freaking greenbacks to the taxpayers not the G.D. banks! But, this is not about getting the economy going again. It is about bending over for the banks. With the $24,000,000,000,000 the banks have already stolen (per establishment CBS News) all the U. S. mortgages could have been paid off. It's all about the demon banks and the corporate fascist state!
http://www.cbsnews.com/stories/2009/07/20/cbsnews_investigates/main5175781.shtml
This is very bullish!
Look at Dow and Nasdaq ramming thru resistance after resistance! Go Algos!
WTF? Are we having an early Santa Claus rally or something? Bots must love reading about China saving the EuroPansyZone!
Oh...wait...bots can't read Bloomberg articles. It must be a Meredith Whitney algo buying everything. Kneejerk machine trading is bullish!!
Seriously, I think China will be the word's creditor forever and the US will remain the largest debtor nation in the history of the world. The Constitution must be restored and people must take take back gubbamint from the the bankrupt oligarchs..
Until then....Negative Real Interest Rates bitchez...Stagflation like you've never even heard of...More declining home prices, $200 Oil, 2 euros for every buck, $500 Silver, etc....
"will rocket the market 20% because a "default" was avoided."
Stock Market will rally on any resolution, even default.
Uncertainty (plus of course economy condition at less extend) is
what holds everything down. I need GOLD to get higher..
Merkozy, kick the can down the road again - touchdown :)
A comment worth reading from 'Manos' in greece:
"Today, after two years of screwing and pressing us, most households and businesses have stopped paying. Stopped paying taxes, utility bills, toll fees, or anything else related to the government. Two hours ago, this same government announced a new property tax (added to the 2 previous ones). This one will be calculated on every and each household, business, cottage, or even a barn for animals. It will be 4 euros per square meter calculated immediately, to be paid by this December the latest."
And this tax too will go unpaid, and no euro troika words of assurance, or further tranche advancements, will overcome the fatal financial paralysis that will guarantee greek default:
http://www.shtfplan.com/headline-news/warning-for-americans-be-safe-and-stay-alert-its-coming_09132011
Shoot thats less than what I'm paying now, maybe I need to move to Greece!
Paying no taxes or fees, the greeks are enjoying a limited version of what millions of american defaulting homeowner 'stay-ins' are doing, 'living large, free of charge'. But bank and sovereign default looms for each circumstance.
If one defines a complete collapse of an unsustainable system, and a locking of the passengers in steerage while TPTB throw all their belongings into the lifeboats and cast off to find another system, then yes, it's a depression. Otherwise, I would hesitate to give what is going on any appelation that previous events bore, because this is a unique event, the end of a globalized system and the beginning of another. We should call it the Great Flush.
Smiddy calls dibs on The Great Flush. All T-shirt royalties are hereby reserved for Mrs. Smiddy, because like a central banker, she always wins.
Great Flush Bitchez
Let's get a grip. The US poverty rate never dipped below 20% until 1960. Do you recall the 50's as a period of depression. The US will do just fine with an thriving underclass and a stagnent and somewhat fearful middle class and it's corporations wiill grow by being global. When a growing middle class was needed that is what we got, reluctantly as we know many always said our workers especially union wokers made too much our poor were too rich. Well we don't need them anymore.
I said around 2005 that the economy will do quite well with 20% essentially not participating any more and the next 30% trapped in stasis as debt slaves. It's the perfect world really. It is the conservative dream realized. The world as it should be.
The only real problem is those people who will not know their place. Force will be needed sometimes. That's what government is for however.
Anyway this gloom and doom stuff based on the end of the growing middle class is simply wrong. It offends some raised to believe that was the best thing but it isn't and never was. It served its purpose but now global corporations don't need that anymore.
And we don't need grandma getting $2K a month waiting to die either. It's stupid.
Hmmmm... ironic sarcasm or your sincere opinion?
"And we don't need grandma getting $2K a month waiting to die either. It's stupid."
Exactly what is it you do that is so valuable?
Do you really think they have an army of TSA agents around to check to see if you posses items of terror. Well they sure as heck do have them ready for any threat they deem to deserve to be dealt with.
Soon enough, Gold Bugs, walking around with physical gold are going to be classified as a fiscal threat to the established order. You will be dealt with accordingly.
They will tax the ever living shite out of your windfalls. Pile up all you want, try and use it for commerce and don't cry about being raped of value by usury and taxation. You live by their rules for the time being. You have to beat them at their own game to retain your capital. When things go sour for the "fiat system", those running the show will gladly reward someone who cashes in a long dated L.E.A.P. option put on Apple, because you played by their rules. They will not be so kind to someone who needs to cash in a 1 ounce gold coin.
By all means have as much as you like, but the utility of your store of value is determined by the laws that govern your existence. The way things are progressing now, the order of precedence is as follows.
Fiat runs the place until it gets run out of town.
Lead will fly all over the place for a while.
Gold will be the settlement of the survivors.
Here is hoping you survive the Fiat and Lead to enjoy the Gold.
In the global debt ponzi the last fiat to lose, wins. Plan accordingly.
Man, those guys (SheepDog-1) was right yesterday:
Hedge Fund Shorts at record levels? There we go!
Nice setup.. Those guys getting killed right now and
High frequency sh&t won't help to cover :)))
One last time everybody, it's not a market.
If gold can drop $200 bucks in a situation like this, it's not a market.
If the indexes can rise on good news, middling news, and bad news, it's not a market.
If gold and silver get hammered at each and every options expiration day, it's not a market.
Sorry, it was never a market.
"Soon enough, Gold Bugs, walking around with physical gold are going to be classified as a fiscal threat to the established order. You will be dealt with accordingly."
Gold is a threat to the system, but the small number of gold bugs are not. Confiscating their gold or even killing them won't help TPTB one whit. Keep good order and you'll be OK.
Guess I'm the son of Forrest Gump, what's the answer to this? A box of chocolates for the correct answer!
10x multiple is more than generous, applying that to $75 in S&P earnings, means that the fair value of the S&P is...?????
I got shot in the S&P. They say it was a million dollar wound.
I see it more as a wealth transfer. Which side are you on?
After stealing from the American people everything they have worked so hard for all their lives, our government/Wall Street (same thing) should have the decency to at least call this travesty the Depression that it is. Refusing to accept responsibility for what they have done to this country and to cover their own rear ends, they call this mess of THEIR making a "recession", leaving the American people to feel that they somehow failed at their jobs and that is why they were "fired". How does Obama look at himself in the mirror evey morning in full knowlege of the truth here? Who do they all think they're kidding? Good ol' Abe said, "You can't fool 'em all, all of the time", and oooh boy, there better be a hell of a price to pay here come election time for the insult on top of injury that these yahoos with the aid of the main stream media have been getting away with all this time.
David Rosenberg
A pretty accurate accounting of recessions, depressions, cabbages and kings.
If I wanted to read about a garden-variety, run-of-the-mill depression, I'd have reread "Of Mice and Men". You must be well aware of the fact that this 'depression' is as unlike the last one as Angelina Jolie is from Joan Rivers.
When or if an account of this period of economic history is written, the writers will invent a new phrase to describe what exactly we are enduring today. It will not be the Great Depression II of the Aughts.
The flaw in your analysis is not in what you included, but in what you omitted.
With all due respect, Mr. Rosenberg, an examination and evaluation of the impending catastrophe about to break over the heads of all but a few of us must involve the roles of 'realpolitk' and 'geodestinies'.
Do you think we will exit this calamity in 2015 or 2020 and resume pumping 80 or 90 mbbpd?