Jeremy Grantham: "I, For One, Wish That The World Would Get On With Whatever Is Coming Next"

Tyler Durden's picture

We will share much more of Jeremy Grantham's latest just released must read letter shortly, but for now the following section will suffice because, in short, we agree with every single word said in it.

“Groundhog Day”


The economic environment seems to be stuck in a rather unpleasant perpetual loop. Greece is always about to default; the latest bailout is always about to save the day and yet never seems to; China is always about to collapse but instead teases us by inching down; and I swear the Financial Times is beginning to recycle its reports! In the U.S., the fiscal cliff looms along with debt limits and the usual election uncertainties. The dysfunctional U.S. Congress continues for the time being in its intractable ways. The stock market rises and falls and rises and falls again. It is getting difficult to find anything new to say at client meetings. I, for one, wish that the world would get on with whatever is coming next.


One slight change, though, is that fantastic (almost unbelievable) profit margin and earnings gains have finally weakened a little. They, together with Bernanke’s super low rates, have been the twin pillars of the market and not bad ones at all: here we are up 8% for the year in a thoroughly unsettling financial and economic world. With margins weakening, one of the twin pillars is looking shaky and price declines look more likely than before.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
lolmao500's picture

WW3 you mean?

Claim: U.S. forces on Syrian border
Assad considering putting military on highest alert

Russian intelligence has information that U.S. troops are in Turkey near the country’s border with Syria, a senior Syrian official told WND today.

The official said the Russians observed American forces taking part in Turkish military measures to secure the Syria-Turkey borders.

The official said the information about a U.S. military presence in Turkey has led to a debate within the Syrian leadership about whether to move the Syrian military to its highest alert level.

Currently, the Syrian army is on its second highest alert.

And as ZH reported, the US will have 4-5 aircraft carriers off Iran in a month or so. But eh, keep watching the olympics, nothing is going on!

Muppet of the Universe's picture

I dissagree with you sir.

B/c I get the feelingyou aren't 25, and about to be drafted into a proxy war against Russia and China.

Prolong this shit.  B/c we are 1933 Nazi Germany with our own adolf hitler, and the longer the bubble is prolonged, the more time I have to move to some beach in the middle of f'ing nowhere.

Tippoo Sultan's picture

A "dysfunctional U.S. Congress ?"

Indeed, Grantham -- what would you have Congress do ? It is apparent that the more dysfunctional Congress becomes -- read: less meddlesome in the affairs of men and commerce -- the better for the Republic. Send them on recess for the remainder of the year, quite frankly, and the nation will be all the better for it.

Methinks Jeremy spends too much time gazing upon Boston Harbor from his suite on Rowes Wharf...managing $100 billion can have a rather ruminative and insular effect upon some.

Everybodys All American's picture

A "dysfunctional U.S. Congress ?"

... as if this president has nothing to do with it.

AldousHuxley's picture

too much trust in one man is dangerous.


you should just rob the bank and donate to candidate of your choice. it is only $30,000 / plate.

rocker's picture

We all trust Ben Bernanke. The man who with Hank Paulson and Neel Kashkari bailed out Goldman Sachs and saved the world.

Oh yeah, as a act of kindness, Big Ben also made Goldman a Bank.  Really.  Yes Really.

These three individuals along wiht Jamie Diamon belong on trial for treason against average people.  

sessinpo's picture

I tend to think that a dysfunctional and divided congress is just a reflection of a dysfunctional and divided population. Which side are you on (general question for anyone and not you specifically)?

Well, I find it interesting that if you do man on the street interviews with either liberal or conservative protesters, the conservatives or modern day libertarians are much more educated and more aware of the issues and what is actually being protested.

Barry Mcokiner's picture

Can someone please tell me why you use the term "methinks"? It is so fucking annoying. It could be the most fascinating comment, full of insight and knowledge and then it gets fucked into tardville by a cunt who simply types "methinks".

yrad's picture

With those downvotes ill call you barryrobottrader

cdude's picture

Methought, he brought out an insightful point!

TruthInSunshine's picture

Aggregate demand destruction & deleveraging is the monster freight train that is the new unstoppable force. Nothing, no one, and no entity can stop this behemoth. In fact, the central banksters can print and dump fiat by the raw tonnage and it will only fuel this locomotive of a force.

It doesn't matter if the collapse comes in a month or 15 years, because the longer they kick the can based on current practices of sucking the lifeblood out of what are now left of or would otherwise be the productive sectors of the economy (and individuals participating in them) to support the parasitic drain that is the banking-financial-WallStreet-military complex, the more severe the collapse will be when it does arrive.

This is not an opinion (that a collapse is coming), but a factual prediction based on the laws of arithmetic. To those skeptical of this claim, I've yet to see a single rebuttal set forth coherently arguing that the collapse can be avoided short of some absolutely impossible scenario whereby real economic growth in developed nations runs at a rate that's so high that the rational amongst us can confidently claim that the real economic rate of growth cited not only can't happen, but that such projections are likely 3x to 4x what is remotely possible under the best case scenario.

I was the first (I believe) to invoke the analogy of a forest fire and controlled burns to demonstrate how radical interventionism by incredibly active fractional reserve central banks, along with concomitant radical interventionism by the treasury departments (or whatever designation they have in other nations), have broken all markets beyond the point of repair.

Just as in nature, when the scrub and brush is allowed to grow too thick, because an external and artificial force is dousing nascent fires each time a whiff of smoke fills the air, the only thing such interventionism is guaranteeing is an epic forest fire at some point in the future, since nature was not allowed to take its course earlier.

Instead of allowing for a deeper and more cleansing controlled burn in 2008 (let alone since the true credit/debt crack up boom began in the 1970s), all the fractional reserve central banks and treasury departments of developed nations have done is to allow even more highly volatile fuel to accumulate, which will lead to a far more destructive and unstoppable fire once the can can't be kicked any further.

We have had central banks intentionally producing fiat-fed bubbles, and inducing capital to chase these bubbles, for decades now, in an attempt to paper over the hollowing out of major economies around the world. The housing bubble was the best example of this phenomenom and process, as tens of millions of Americans who were formerly employed in productive sectors of the economy, but who found themselves without a career suddenly (because of hollowing out of the U.S. economy and those of major European Nations), found replacement work as real estate agents/brokers, mortgage brokers, title agents, subprime loan agents, working in infrastructure companies, or otherwise working in industries and in companies that necessarily fed off the real estate and housing boom.  This was a bubble that papered over the hollowing out of the economy- structural, despite what the very disingenuous and or incredibly errant Paul Krugman would and has claimed- and allowed people to believe that all was well and consume as if there were no future crisis lurking.

The crisis has arrived, whether people realize it or not, and the fractional reserve central bankers can't 'fix' the deleveraging that now is deeply entrenched across major economies, let alone prevent the inclination for deleveraging from affecting emerging economies.

The 'wealth accretion' that Bernanke claims he's helped create via his unprecedented, radical, 100% debt dependent, market breaking monetary policy is but an illusion and transitory mirage; another bubble that will pop as they all do.

Buckle up. Get your house in order. Get rid of any debt and superfluous expenditures. Do not take the deceptive cheap & easy credit that may be extended as part of the last gasp of fractional reserve central banks to delay the inevitable collapse (doing so just makes you and your real assets more 'harvestable'). Focus on core passions and things that you're talented at, and learn new skills that have practical benefit.

It's not a boast, but a life lesson (and one that I took to heart), when I say that I personally know people who had high 8 (and even several 9) digit checking accounts, and that I traveled with them while they lived like kings, and that almost to a person, they've gone bust now. Credit is dope. Credit based on fractional reserve, fiat printing practices is crack cocaine. And all fiat in fractional reserve banking closed loop systems equals debt, and vice-versa.

BeetleBailey's picture

Hithereto, whilst I plumped for the exchequer, I quaffed an ale of the black stuff, provided by me landlord.

Methinks someone has soiled their knickers.........

vato poco's picture

Aw, get over it, Nancy. It's not like the guy said "Forsooth" or "Gadzooks" or some such.

mick_richfield's picture

Every day that it is prolonged is another day that our species lives enslaved.

Another day we can't use to become what we could always have been, and another day closer to extinction

Another day that the vampires live by sucking your life out a hole that you can't feel in the back of head.

No, it's is not 1933.  It's not 1929.  It's not 1914.  It's something that we haven't seen before.

You don't have any more days left. 

Move to your beachfront in the clothes you are now wearing.


flacon's picture

I estimate that I am going to get 300 tomatoes this year. A bunch of cucumbers and some broccoli, green peppers and beans. I didn't see even ONE banker in my vegetable garden. It's mine. It's all mine. And nobody is going to eat it except ME and MY family. 

Admiral Douchebag's picture

I trust this bountiful resource doesn't form the whole of your post-apocalyptic plans.

JR's picture

That's what the Little Red Hen said until the republic became a democracy and the barnyard mob voted and rewrote the manuscript. In the socialist revised version of the original, she bakes the bread and the animals who refused to share in the work all "share" in the eating, even the dog.

But, as Obama, as president, told the cheering animals: "She didn't bake that!" 

And as Michelle, as first lady, whispered to the waiting menagerie in an aside: "Someone is going to have to give up a piece of their pie so that someone else can have more."

Better luck with your tomatoes!!


Handyman's picture

I break down my family security into 4 sections: Food, Financial, Personal, and Energy security. I'm hoping you have a more comprehensive plan together or you'll wake up to find your unprepped, starving-mad, neighbour zombies scrambling over your picket fence to devour your tomatoes.

sessinpo's picture

Eat it and eat it all. Now that you've reported it, the socialist (including republicans) will find a way to tax it to distribute the wealth. Thank you in advance.

reader2010's picture

Just $1 trillion on warz are NOT enough. A few trillion more USD are needed in new Warz each year.

DeadFred's picture

It's not the stock it's the flow that matters.

Apocalicious's picture

Disagree ardently. Both matter. Our idiot central bankers who focus solely on YoY changes constantly miss absolute levels, turning "counter-cyclical" intentions into "pro-cyclical" policy. (keywords: Greenspan, real estate bubble)

JR's picture

Thanks for the big stuff, lolmao.

“Romney wants the Jewish vote.”  So, if it takes a promise of war and another million lives to get that vote, well, that’s D.C. politics. Right?  Obama wants the Jewish vote, so not to be outdone he gave Israel $70 million in additional military aid this week; but that’s D.C. politics. Right?


As retired economic professor, Michael Rozeff, put it this week regarding Romney and Israel :

“Romney's statements about Israel and America continue to escalate. When a politician tells me I have a ‘solemn duty and a moral imperative,’ about anything, anything at all, I gag. And when they tell me I must take up arms, I gag, and especially so when the frictions and troubles and antagonisms and conflicts are not of my doing but, in many respects and instances, of the doings of others and of other politicians and 'statesmen' of the past and present. And especially when they demand and take my wealth (and would take my very life) in order to kill (or make me kill) and to do abominable deeds that my conscience and moral compass reject. I am not God. They are not God. When a politician says 'follow me,' I do not follow. That's my solemn duty and moral imperative.

“If these speechmakers want to take up arms and kill, that is their business, not mine. I'll quote tenor saxophonist Lester Young ‘I can't go round thinking evil and all that shit. Everything is still cool with me, you know, 'cause I don't bother nobody. Things like that. Comes out nice. That's why I say What you do is your business. What I do is my business.'"

CompassionateFascist's picture

The "Jewish vote" has nil significance. Jew $$$$$$$$$$$$$$$? That's significant. 

sessinpo's picture

Just as significant is spic, black, latino, chink, blah, blah, blah, insert whatever ethnic slur here, blah, blah, blah.....

So I took a dollar from a black dude. And I looked at him and said, "wow, this dollar is worth just as much as the jew dollar I took. I wonder if the US dollar that Lebanese is going to give me will be the same?'

Give me a break. Money has no loyalty. It's kind of like Obama bitching about Bain Capital, but yet he took $139k from them in 2008 and has taken $80k from them this year so far. LOL

10mm's picture

Do not worry about tommorow,tommorow will take care of itself.Let the war pigs work it out.

BandGap's picture

Profit margins on the backs of elderly savers. Make no mistake, if you live and die off of bank CDs or savings you are feeling the hurt.

Colombian Gringo's picture

Agreed. Let's not waste any more time. Hang the bankster bastards, NOW!

azzhatter's picture

actually you are just dying

dmger14's picture

The elderly and boomers elected the officials that heaped this debt on our youth.  It's only fair they share in the pain they created.

dwdollar's picture

How dare you speak ill of the Boomers!

How dare you demand equal sacrifice from them!!!

/sarc's picture

The equal sacrifice fallacy is how we got here to begin with.

sessinpo's picture

It's just been redefined and manipulated by government and the socialist. Sacrifice is what you should to for yourself to better yourself and thus your community. Now it is sacrificing for the community, which actually weakens the community.

In other words, we use to build strong roots. That is was sacrificing for youself, improving yourself and thus improving the community.

Now we only focus on the green leaves and fruits that are visible. That is sacrificing for the community.

Eventually the roots become weak and the tree dies. That is socialisms fallacy. Everyone loses. Not that capitalism is perfect, but at least we have a few trees left with strong roots to continue to produce.

sessinpo's picture

Thumbs up to both of you for political incorrect posts that speak many truths. I have often thought that the greatest generation created the worst. And the worst generation is passing it onto the next (like the generation X)'s picture


The elderly and boomers elected the officials that heaped this debt on our youth.  It's only fair they share in the pain they created.


Funny thing is the boomers said ex-ex-exactly the same thing:

JR's picture

Dmger baby,

not to be bragging on the boomers and the elderly, but it was the youth and the hyphenated-voters who elected Barack Obama and most of the officials "that heaped this debt on our youth."

Young voters preferred Obama over John McCain by 68 percent to 30 percent — the highest share of the youth vote obtained by any candidate since exit polls began reporting results by age in 1976, according to CIRCLE, a non-partisan organization that promotes research on the political engagement of Americans between ages 15 and 25.

And it’s the hyphenated-voters and wealthy liberals who are the mainstays of Obama’s and the Democrat constituency. Growing racial and ethnic diversity, which is concentrated among younger generations, has benefited Democrats, fact, according to Pew Center Research.

And contrary to what you imply, a majority of baby boomers have tasted the pain of hardship they didn't "create" much of their lives.  And to rub salt in their wounds, the MSM is now misrepresenting them, as you do, so the government won’t have to pay out the debased value of the Social Security and Medicare that they paid into on a contractual basis all their working lives.

At the same time, Bernanke is devaluing the purchasing power of their savings, investments, pensions, and SS; while Lyndon Johnson and a Democratically-controlled House and Senate took SS from the independent “Trust” fund and put it in the General fund so that Congress could spend it; while Jimmy Carter and the Democrat Party began giving SSI SS payments to immigrants at age 65 who had moved into the country and never paid into SS.  

But, as Wells Fargo tells us, even though a lot of baby boomers don’t have enough to retire on, they love the thought of having to keep working till they drop dead on the grindstone. My question, how many people who have enough to retire go back to work? My guess is, not very many.

And if that isn't enough, Obama made an agreement in April, 2006, as a young, Democratic senator speaking at the inauguration of the Hamilton Project (Goldman’s think tank), with his “friend Bob” Rubin for more NAFTA-type agreements and  cuts in entitlements (like social security) – just what Rubin wanted!

The documented truth is that most baby boomers, those born between 1946 and 1964, could only live “within their means” on the paychecks of two wage earners. And now, as bankonzhongguo  wrote on ZH, “Baby boomers' wealth is being vacuumed up and sent to developing markets,” or, as Jeremy Grantham writes, used as one of the “twin pillars of the market.”

grid-b-gone's picture

Here's one boomer who would be happy to see change that would help ensure my children the opportunity I had up until 2007.

Private sector workers work for 40-50 years. Public workers need to do the same. In my area, teachers, police, and fire and most public employees need only 25 yrs and are then likely to receive checks for 30-35. Some surviving spouses can stretch that to beyond 40 years.

Social Security is earned after 40 quarters. Let's extend that also to the 40-year mark, or 160 quarters. Even if a worker takes 5 years off for child care, illness, family leave, or job disruption, a 22-yr old out of college will still be able to collect by age 67.

Given a magic wand, I'd tie public worker and politicians' pay, benefits, health care contribution percentages, and required length of service directly to private sector averages. 

When the private sector taxpayer does better, those who get paid from taxes do better, but not before.

I see many young people who could do much better even under today's circumstances. Although the debt and deficit have risen dramatically, taxes have not. So, the only serious reduction of opportunity for most young people is the weak jobs market. Boomers have been hurt as well as young people in this area. 

Until that changes, do everything you can to earn opportunity during these hard times.

If you smoke, quit. Stop wasting money on stupid stuff like tats. Don't take on student loan debt for professions like phlebotomy that pay $10/hr and for which the Red Cross trains for free. Don't even take out student loans for areas of study like english, history, and communication. Run your education like a business, which means you run the numbers and know your ROI before spending cash or taking on debt.

Even if you are in a desired area of study, never put stuff like pizza in your student debt total.

Do what you have to do to succeed, not what you want. For most, that means having more roommates than you want, having a phone that is a couple revisions older than you would like (or even, gasp!, a pre-paid phone), riding a public bus, living with parents even after graduation and sometimes even after marriage, or holding down a P/T job during the prime weekend socializing times.

Boomers wish the lock box had been real. They are just as disappointed in the current state of affairs as any demographic. They lived through a time when they were seen as disloyal for having anti-government opinions, many were drafted, they built their families when mortgage rates were above 10%, retrained themselves mid-career to remain useful as technology exploded, and just saw 40% of their home values evaporate as they prepared for retirement. And you want to bitch because they are in line to receive about $350 per week, on average, starting between the ages of 65-68?

No one, not even the rich who appear to have more advantages than ever, gets through this life without enduring a period of angst or anguish. I'd suggest you do what the boomers, the Greatest Generation before them, and every generation back to the Founding Fathers who signed their lives to the Declaration of Independence did: succeed despite the challenges and limitations of the times. 

Good luck.  

DrSandman's picture

Screw 'em.  They're the gullable wankers that bought into the Bullshit Socialist Security Ponzi Scheme.  They are the Greediest Generation.  'Eff 'em.  Let them eat cat food, for all I care.  I will take care of my family, first, and myself second.'s picture

Some of us have folks from the Boomer generation (and older) in our families. Imagine that!

Vendetta's picture

Yeah, that's the spirit.  Those old fuckers made the bankers and globalists do it ....

sessinpo's picture

"Made"? Hardly, Enabled and bought into. I tend to think so. It is this generation that tended to think that government was the solution to everything.

sessinpo's picture

For you that gave a down arrow. You have yet to realize that it may not be a choice which probably means you are ill prepared for such a situation. I feel bad for you but I'll get over it. LOL

Central Bankster's picture

Time for the "hope" to meet reality.

Cdad's picture

Could not agree more.  The trouble is...the same fools that destroyed the economy are still in charge of assets and their prices.

More pink slips for bankers, please.  And let us finally get down to the task of prosecuting those who have violated the system, as well as taking apart these behemouth banks.  Let us get on with it, already!

Cursive's picture


TPTB can't forestall it much longer.  Frustrating to watch them prop up this decadent regime for this long, though.  Excellent words from Mr. Grantham.

CompassionateFascist's picture

You must be kidding. Not one of us, not even JW Rawles, is prepared for what's coming. The longer the scum delay it the better I like it. Methinks, tho, that we've got maybe 3-5 weeks to the IranWar------->dollar collapse. 

Ray Bones's picture

 "I, for one, wish that the world would get on with whatever is coming next."

Finally. Someone (smarter than I am) said what I've been thinking.

knukles's picture

Hi, I'm Knukles.
And I approve of Jeremy's message.


Ya'll know that if it's anticipated, it can't by definition be a Black Swan.

So here's the real Black Swan (until I just mentioned it).
That there will be no crash and burn, tsunami, whatever... it'll just continue to rot away over a long time like a corpse in the jungle till nothing's left.
A long slow ghastly demise.

Go long anti-depressants.

fonzannoon's picture

You said it knukles. I can tell you my generation (mid 30's) have resigned themselves to the idea that this is what it is. They can't change the system and there is no point in fighting it. Everyone on here sits at their computer with sticks in their eyes waiting for the big post that is not coming. This could go on for a very very very long time.