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David Rosenberg's 12 Bullet Points Confirming The Double Dip Is Here

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Wed, 08/17/2011 - 15:03 | 1569817 anynonmous
anynonmous's picture

Rosie wrong again

we never got out of the first recession

as in we have been and continue to be in a protracted downturn

 

(forgot the attribution - Carl Weinberg)

Wed, 08/17/2011 - 15:21 | 1569945 JenB
JenB's picture

Not only is the man brilliant, he has the courage to stick to a longer term vision while sometimes taking a lot of heat over the short term. He is an economist not a trader.

Wed, 08/17/2011 - 22:38 | 1571329 Cursive
Cursive's picture

@JenB

 

I do like Rosie's take on the economy, but this:

There is no reason to be fearful. Just be prepared. Hedge funds that are long high- quality, non-cyclical companies with strong balance sheets and dividend growth and yield attributes while being short small-caps that are highly cyclical and expensive is a money-making strategy in a recession.

is yet more bad trading/investing advice.  There will be no place to hide, just like 2008.

Wed, 08/17/2011 - 23:53 | 1571497 Nobody special
Nobody special's picture

There was a place to hide in 2008 and there is one now as well.

1. If you don't hold it you don't own it, so buy and take possession.

2. In an inflationary market, it pays to have food and necessities as inflation makes them harder to obtain.

3. In a deflationary market, you may not have money for food and essentials, so it still pays to have them.

4. In a hyperinflationary market, you will NEED food and essentials to survive. They maintain and often increase in buying power.

5. In a hyperdeflationary market, you will NEED food and essentaisl to survive. Those with assets you value will often trade a lot for survival.

Seems like food and necessities are the things to hold, regardless of what the turmoil brings. They're only a bad play when the market is stable. 

Wed, 08/17/2011 - 15:25 | 1569958 Fukushima Sam
Fukushima Sam's picture

If you print fast enough, the charts still look great, at least until you go off the cliff!

Wed, 08/17/2011 - 19:49 | 1570939 Tater Salad
Tater Salad's picture

"Rosie wrong"? 

Man "anynonmous" or shall I say "coward" are you misled. 

Hide the wife and kids, I'm afraid they may both leave you if you're that stupid.

Wed, 08/17/2011 - 21:47 | 1571178 marsdefIAnCe
marsdefIAnCe's picture

if you average out the yoy inflation of items from the list tyler posted a couple days ago (gas, pork, heating oil, rice (exploding post-fukushima - lowest performer tied with cotton), etc.) which I think is a pretty fair basket of goods for the nonpaper (real) economy, then you get 41% inflation which implies a 26.6% yoy contraction in real terms if you accept the fed's nominal numbers

 

granted, the numbers may not be that bad, but growth?  not even close.  we never left the recession, a fact all too obvious to working america

Wed, 08/17/2011 - 14:54 | 1569822 SheepDog-One
SheepDog-One's picture

Oh great....Rosie saying we're double dipping confirms its all up from here. Gee thanks a lot Rosie! But no doubt he's right, we never left the first collapse and depression...only thing yet to be seen is how much more fiat wallpaper they plaster over it, and if anyone buys it this time or it faceplants..

Wed, 08/17/2011 - 14:52 | 1569826 Sudden Debt
Sudden Debt's picture

Let's just wait for a sign of god.

untill than, keep buying silver and gold with everything you've got.

 

Wed, 08/17/2011 - 15:06 | 1569879 spiral_eyes
spiral_eyes's picture

sign of god, you say?

professor krugman has the answer:

http://azizonomics.com/2011/08/16/krugman-calls-for-alien-invasion/ 

sitchin, bitchez.

Wed, 08/17/2011 - 14:53 | 1569827 Id fight Gandhi
Id fight Gandhi's picture

I see recession, but won't listen to Rosie. How's that pay for tips site working out for him?

Wed, 08/17/2011 - 17:08 | 1570526 adlibber
adlibber's picture

Purty nicely, actually.

Wed, 08/17/2011 - 14:53 | 1569830 caerus
caerus's picture

shhhh....tryin to make some money on the bear side here...

Wed, 08/17/2011 - 14:54 | 1569834 maxmad
maxmad's picture

Rosie Palms  says so...

Wed, 08/17/2011 - 14:54 | 1569838 FranSix
FranSix's picture

OT:  Chavez to nationalize gold sector:

 

http://watch.bnn.ca/#clip518294

Wed, 08/17/2011 - 14:55 | 1569839 legal eagle
legal eagle's picture

I will take my double dip in mint chocolate chip please

Wed, 08/17/2011 - 14:56 | 1569841 Flakmeister
Flakmeister's picture

Rosie is a funny guy and misunderstood,  His understanding of the macro-trends is not for day to day trades, he looks too far forward for that.  It is sort like using a map of US Interstate system to get from Manattan to Hoboken...

Wed, 08/17/2011 - 15:00 | 1569855 Johnny Lawrence
Johnny Lawrence's picture

Exactly, and this is why he has my utmost respect.  Most of these bullshit economists simply react to each daily report and offer zero predicative value.  Rosie's knowledge of economic history and ability to connect macro trends are phenomenal.

Wed, 08/17/2011 - 15:48 | 1570112 CrashisOptimistic
CrashisOptimistic's picture

I think the guy is a human being.  He was traumatized by what happened to him at Merrill Lynch ("One pays a heavy price for being bearish when there is a bull on your business card.")

In that context, I think he's too damn smart not to understand that oil scarcity destroys all his economic models.  But he's been traumatized.  He's walking on thin enough ice telling people the economy is smashed.  

If he then told them there are no longer any cycles and it is all downhill from here to starvation, he'd have no job.  Simply that.  Even if he understood it (and I think he does).

 

Wed, 08/17/2011 - 17:38 | 1570614 CrashisOptimistic
CrashisOptimistic's picture

That's a pretty good oil depletion drives everything thread.  I missed it.  Busy burning oil.

You know, here's the thing.  People want to define the decline by the slope of the right side of the peak.  If it's steep, disaster and death.  If it's shallow, kick back, go to the beach and the technological miracles have time to occur and THEREFORE WILL occur that successfully break the laws of physics.

I think steep is death.  I think shallow gives the ambitious time to notice it and makes them take action to achieve ambition, namely superiority, namely defeat of competition, namely war.

That's the core of my perspective.  Steep = Apocalyptic starvation.  Shallow = inevitable war and Apocalyptic starvation.

Have a look at the recent TOD article on the Bakken.  Did you know the typical well there produces only about 1000 bpd, and is down 75% within about 2 years?  Horizontals die vertically on the graph.  They are already drilling 2500 wells per year just to hold 371 K bpd.  This is not going to be the salvation of the USA.  371K bpd is what Alaska will lose in production over the next couple years.  371 bpd is not nothing, but it's also not significant.  They'll grow it to 400 or 500K max and then declare the only thing stopping them is more investment (from someone that doesn't mind a 1K bpd well going to 250 barrels/day in 2 yrs).

Wed, 08/17/2011 - 17:41 | 1570637 Flakmeister
Flakmeister's picture

Yeah, I got the latest Bakken stuff... You are well aware of what I post here on the Bakken...

And yes, it is all about the RHS...There will be blood, whose and where, I do not know.

Wed, 08/17/2011 - 17:05 | 1570512 adlibber
adlibber's picture

I kinda doubt he was traumatized that Merrill Lynch/BoA offered him mega millions to stay when he resigned. He was probably also not traumatized to move back home and have the chance to get paid in Cdn bucks, especially now. I bet he is not too traumatized that he left some BoA shares on the table-- the ones that are worth less now than when they were issued. He was NOT traumatized, pretty sure on this, that he would not have to fly out Charlotte.......... rofl. He did pay a heavy price for bering bearish with a bull on his business card, but that price was not his job, dude.  Yes, he is a human being. At this moment it is freaking hot in the good ole north ,and he isn't walking on ice, thin or otherwise. Have a nice day.

Wed, 08/17/2011 - 17:10 | 1570513 adlibber
adlibber's picture

Deleted due to spelling error. We are a fussy lot.

Wed, 08/17/2011 - 17:09 | 1570517 adlibber
adlibber's picture

I kinda doubt he was traumatized that Merrill Lynch/BoA offered him mega millions to stay when he resigned. He was probably also not traumatized to move back home and have the chance to get paid in Cdn bucks, especially now. I bet he is not too traumatized that he left some BoA shares on the table-- the ones that are worth less now than when they were issued. He was NOT traumatized, pretty sure on this, that he would not have to fly out Charlotte.......... rofl. He did pay a heavy price for being bearish with a bull on his business card, but that price was not his job, dude.  Yes, he is a human being. At this moment it is freaking hot in the good ole north ,and he isn't walking on ice, thin or otherwise. Have a nice day.

Wed, 08/17/2011 - 14:56 | 1569843 loftgroovv
loftgroovv's picture

I just took delivery of 80 more 1oz Silver Maple coins.

Ooohhh yeah. Like it don't cha bitch! :0)

Wed, 08/17/2011 - 15:00 | 1569858 dxj
dxj's picture

Why would we listen to advice from anyone who does not understand that the "business cycle" is a product of the central bank?

Wed, 08/17/2011 - 15:17 | 1569924 Raynja
Raynja's picture

ahahahaha "the business cycle is the product of the central bank".  that was a good one.

Wed, 08/17/2011 - 15:02 | 1569866 gwar5
gwar5's picture

 

The Recession upon the Stairs

Yesterday upon the stair,
I met a Recession who wasn’t there
Recession wasn’t there again today
Oh, how I wish Recession would go away
Wed, 08/17/2011 - 15:07 | 1569881 The Deleuzian
The Deleuzian's picture

Silver finally poked head <$40 / oz. Can't remember when I saw a change less than $.20 for a week, especially when Au been so strong!!

Big move coming!!!

Wed, 08/17/2011 - 16:41 | 1570400 Crisismode
Crisismode's picture

When?

Wed, 08/17/2011 - 15:17 | 1569922 FoieGras
FoieGras's picture

Rosie is spot on. He was a bit of a deer in the headlights in the 2009 rally but he nailed this entire cycle from 2010 top to now.

Wed, 08/17/2011 - 15:20 | 1569938 Duck
Duck's picture

Tyler,

Rosenberg is the most informative economist you put on ZH.  Contrary to your great insight into the inner workings of the investment world which created the ZH platform (bank/investment firm research, fixed income, HFT, flash crash,...) most of the economics writing by people with loose wingnuts here is trash.  Hyperinflation 2009, hyperinflation 2010, hyperinflation 2011,... Latest Austrian fad (no data economics!, no one will care a decade from now)...

Good for comments and reads, but not any credibility

What about the smackdown on Tyler by Roubini today on twitter?  Depressionary economics doesn't create hyperinflation unless you go so far out on a limb your chance is one in a million of getting off.  Roubini is the opposite -- insights on economics, no credibility on investments.

And your man Rosenberg:  "Deflationary environment"

Stick to what you know best if you want credibility.  I believe you're self-aware.

Stick to what you're doing if you want traffic by those who can't distinguish.

Wed, 08/17/2011 - 15:27 | 1569960 Tyler Durden
Tyler Durden's picture

So... the Fed will sit back and watch as the world blows up in a deflationary supernova. Kinda like back in 2008 right? Oh wait, it printed, backstopped and guaranteed $24 trillion in order to prevent that from happening.

This time it will surely be different, or not... only this time the world's central banks will have to add 1 or 2 zeroes to the number in trillions above.

As for credibility, we go with what gold anticipates, which is nothing more than you black swan hedge trade - there's your investment insight, which we presented back on March 18, 2009. Since then gold has outperformed stocks, bonds, and all other assets. Yes, you are welcome. Oh wait, that decision was based on faulty comprehension of economics right?

So thanks for the advice: we will certainly stick to what we are good at.

You are, however, absolutely correct, that in ten years, after the UST has printed about $30-40 trillion in those same bonds whose interest rate can only go to zero as the outstanding notional hits infinity (wink wink), nobody will care about the deflation vs hyperinflation debate for one simple reason...

Lastly, you are more than welcome to read about the edibility of spam at RGE. Your contribution to the readership there will surely be noticed. Actually, perhaps the reason why nobody reads this "brilliant" economist is that anyone who took his 2009 advice to short gold is broke?

Wed, 08/17/2011 - 15:38 | 1570007 Duck
Duck's picture

If you're right there's millions to be made on structuring a trade on the difference between inflation expectations in the gold market and inflation expectations between 10 year Treasuries and 10 year TIPS.  Guaranteed millions on convergence, unless you're wrong about which is the better indicator of inflation.

Like I said, don't take investment advice from Roubini...that's what no credibility means.

Wed, 08/17/2011 - 15:43 | 1570080 ghostfaceinvestah
ghostfaceinvestah's picture

TIPS = inflation as measured by the government

Gold = inflation as measured by the market

Big, big difference.

Wed, 08/17/2011 - 16:10 | 1570221 SheepDog-One
SheepDog-One's picture

Tyler I only disagree in the sense that the FED/world banksters are trying to shore it all up, no, they planned a total collapse and all actions we've seen from them are just evidence theyre simply making sure it is totaly beyond any repair so they can finally get their 1 world govt and a 1 currency which they totaly control over the prison planet.

Wed, 08/17/2011 - 16:24 | 1570291 Yardstick of Ci...
Yardstick of Civilization's picture

Really?  Totally beyond repair so something else can be ushered in?  Please.  As far as I can tell, the best argument against a total collapse in the markets is that TPTB are (i) getting rich from it, (ii) controlling the masses, and (iii) controlling the politics.

Why on earth would they ever want to change that?  What else can be gained?  Is this one world government somehow going to suck souls out of people and monetize them?

Again, the only faith I have in the system remaining intact (i.e. the stock market not going to zero) is that TPTB have a very strongly vested interest in keeping things how they are.

Wed, 08/17/2011 - 15:34 | 1569998 caerus
caerus's picture

"no data economics" please elaborate...the austrian school simply posits that the complexity of self-aware individuals participating in a market makes for complex (and, at present, unknown) mathematical models...

Wed, 08/17/2011 - 15:42 | 1570068 Duck
Duck's picture

Best explanation of what Austrian Economics is by a Libertarian:

http://econfaculty.gmu.edu/bcaplan/whyaust.htm

Wed, 08/17/2011 - 17:02 | 1570491 Dr. Acula
Dr. Acula's picture

Caplan's old arguments have been refuted by several authors; here is just one example

http://mises.org/journals/qjae/pdf/qjae2_4_1.pdf

Wed, 08/17/2011 - 17:17 | 1570551 Dr. Acula
Dr. Acula's picture

>most of the economics writing by people with loose wingnuts here is trash.  Hyperinflation 2009, hyperinflation 2010, hyperinflation 2011

Yes, incredibly complex systems like the economy and the climate don't admit reliable mathematical models or precise predictions.

At least where I live you can't trust the weather report more than a day or two in advance.

And economics is the worse of the two because it's teleological not causal. Whereas a mindless mass of air moves immediately because of forces like pressure and gravity acting upon it; a human travels to the store to buy a pound of meat because it is part of a sequence of planned steps designed to bring about some outcome (say, entertained guests) far in the future.

Wed, 08/17/2011 - 18:08 | 1570710 caerus
caerus's picture

i couldn't even decide where to drink this afternoon till i got there...predict that...

Wed, 08/17/2011 - 20:18 | 1570984 Kayman
Kayman's picture

a human travels to the store to buy a pound of meat because it is part of a sequence of planned steps

And when he gets to the store he decides to buy something else, or not.

It's been well said on ZH before. inflation in what you need, deflation in what you own.  Gold excepted.

 

Thu, 08/18/2011 - 04:11 | 1571758 Keri at Bankste...
Keri at Bankster Report's picture

Another way of putting this is to call it a shift of value metrics.

There was a massive paradigm shift in economics (economics = how people get what they want) when debt became the metric of "value" and "worth."  Indeed, from a purely logical standpoint, it is truly ridiculous for one to think that he's "better off" because he is OWED money.  Yet this is what occurred (most recently in human history, at the turn of the 20C, but it had occured before as well), and this latest occurance coincided with massive technologically-aided cultural diffusion (enforced by war/destruction and globalization) that has created the most interlinked global economy humans have ever seen.  And it is ALL based on debt, and the "debt = worth" value metric.

There will eventually be another paradigm shift (as more local-level human history has played this out before), and this will be the shift of value metrics away from debt and "owed" wealth and over to "instrinct" or "stored" wealth.  Gold happens to be, historically and currently, the dominant global version of wealth storage; also right up there is land.  I think what we are seeing right now with gold and other unemcumbered assets is the beginning (in earnest) of this shift.  People are moving away from the idea of "owning owing," or owning debt and claiming "wealth" due to it, and they are moving instead toward the idea of having assets with no liabilities (ie, those unreliable debtors).

As you say, "inflation in what you need, deflation in what  you own."  What you own (home mortgage, FRN's, bonds, stocks, etc) are all debt-based units.  What you need (food, goods, real tangibles) are valuable by their very nature of being coveted/required, and are non-debt-based metrics.  In other words, they are stored value metrics (incidentally, they are "stores" because the store can be used [like with food] or transferred [like with gold]).  I tell people today to start thinking this way, because sooner or later, we will be back to this value metric, as oppsed to the one underwhich we currently think (debt).  Indeed, be prepared to lose every "thing" (read: all your FRN's, all your debt-money-based "worth," everything with a $ in front of it), because when the shift occurs, these debt units (formerly the price-setters) will themselves suddenly become subject to pricing in terms of the new metric---the stored wealth.  And given that debt inherently has no value, they will be given no value.

The debt-based magic show can only go on for so long before people either tire of it, or figure it out.

Thu, 08/18/2011 - 13:00 | 1573602 DrunkenMonkey
DrunkenMonkey's picture

You took the words right out of my mouth.

Thu, 08/18/2011 - 13:02 | 1573612 Flakmeister
Flakmeister's picture

Very nice post...

Thu, 08/18/2011 - 15:43 | 1574253 Hot Shakedown
Hot Shakedown's picture

excellent summary

Wed, 08/17/2011 - 15:24 | 1569954 sbenard
sbenard's picture

Recession! It's baaa-aack!

And the local school board approved a 9.3% tax increase last night!

Wed, 08/17/2011 - 15:36 | 1570018 That Peak Oil Guy
That Peak Oil Guy's picture

"We have to understand that recessions are part of the business cycle. There is no reason to be fearful."

Actually, we may have to be fearful of this one.  When a fundamental input like oil becomes more scarce the recession is more likely to resemble the waterfall Tyler alluded to in his opener...

Good reading from Gail over at The Oil Drum today.  Though I think she would do well to include an analysis of monetary policy in her work:

http://www.theoildrum.com/node/8268

TPOG

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