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Morgan Stanley On Why 2012 Will Be The "Payback" For Three Years Of "Miracles" And A US Earnings Recession
Yesterday, we breached the topic of the real decoupling that is going on: that between the macro and the micro (not some ridiculous geographic distribution of the US versus the world), by presenting David Rosenberg's thoughts on why Q4 GDP has peaked and why going forward it is energy prices that are likely to be a far greater drag on incremental growth than the preservation (not the addition as it is not incremental) of $10 per week in payroll taxes (which only affects those who are already employed), even as company earnings and profit margins have likely peaked. Today, following up on why the micro is about to return with a bang, and why fundamentals are about to become front and center all over again, albeit not in a good way, is, surprisingly, Morgan Stanley's Mike Wilson, who has issued his loudest warning again bleary eyed optimism for the next year: "Think of 2012 as the “payback” year….when many of the extraordinary things that happened over the past 3 years go in reverse. I am talking about incremental fiscal stimulus, a weaker US dollar, positive labor productivity, and accelerated capital spending." Said otherwise, 2012 is the year when everything that can go wrong in the micro arena, will go wrong. And this is why Morgan Stanley being bullish on the macro picture! As Wilson says, his pessimistic musing "tells the story for what to expect in 2012 assuming the situation in Europe doesn’t implode. In other words, this is not the macro bear case." If one adds a full blown European collapse to the mix, then the perfect storm of a macro and micro recoupling in a deleveraging vortex will prove everyone who believes that 2012 will be merely a groundhog year (in same including us) fatally wrong.
Lastly, when it comes to predictions Morgan Stanley (which called the EURUSD short the hour Goldman put it on as a long) should be taken far more seriously than Goldman, which merely wants to be on the other side of its clients.
The complete very troubling forecast from Morgan Stanley:
With thin markets at year end, changes at the margin can have maximum impact on asset prices. This includes policies like the LTRO as well as the Taiwanese government directly buying stocks! Knowing this, many pundits are keeping the dream alive for a Santa Claus rally. Unfortunately, I think time has run out in 2011 and the best we can hope for at this point is to limp across the finish line without breaking any bones. Having said that, I think there is one more positive catalyst for 2011 that could lead to a final surge. The headline would read something like this: “Merry Christmas! Congress delivers gifts by passing full year payroll tax cut and unemployment benefits extension.” No doubt, this would be good news for stocks since there is enough skepticism on Washington’s ability to get anything done before year end. Of course, it could be bittersweet because it would also likely be the perfect rally to sell into and short.
Whatever the next few weeks brings, I think it’s safe to say that everyone is sick and tired of trading headlines and trying to decipher the next statement/rumor surrounding Merkozy, central bank policies, Washington politics, etc. Whatever happened to getting paid for channel checks or betting on a unique product cycle that isn’t appreciated by the market? Ironically, while all this meddling by the authorities has helped prop up asset prices, it has also made it harder to trade and invest. In my view, this is one reason why volatility remains so elevated. According to our Quantitative and Derivative Strategies team, 5, 10, 22, and 60 day realized volatilities are all in the 26-29% range. This is unusual historically, as realized vol has typically fallen by this point in the year. It’s quite possible this higher volatility has compressed multiples and raised correlations, both of which are counterproductive to central banks’ objectives.
The good news is that the fundamentals are about to take front and center stage once again. The bad news is that it is likely to be negative. Specifically, there has been a distinct increase in negative earnings results, preannouncements and/or guidance…..ORCL, RHT, GIS, BBY, WAG, ACN, TIF, ANF, DRI, NTAP, TXN, XLNX, ALTR, AMZN, CRM just to name a few. This is very much in line with my thesis for 2012 that we are likely to avoid an economic recession in the U.S., but we are also very likely to experience an earnings recession. Importantly, consensus estimates do not reflect this reality with bottoms up forecasts still modeling 10% EPS growth for the S&P500 next year and top down consensus in the +4-5% range. While it is a rare outcome to experience positive GDP and negative earnings growth in the same year, it is also just as rare to experience record margins in a world of 9% unemployment and lackluster organic revenue growth. Think of 2012 as the “payback” year….when many of the extraordinary things that happened over the past 3 years go in reverse. I am talking about incremental fiscal stimulus, a weaker US dollar, positive labor productivity, and accelerated capital spending. Exhibit 7 tells the story for what to expect in 2012 assuming the situation in Europe doesn’t implode. In other words, this is not the macro bear case.
The first chart in Exhibit 7 (top left) graphically shows the real deterioration we are now seeing in earnings. I have discussed the rollover in earnings revision breadth many times in prior notes and now we are seeing it meaningfully hit the numbers. We looked at the 20-25 companies that that typically report prior to Alcoa (the official kick off to earnings season) and as you can see in the chart, the trend is disturbing and is now showing outright misses in aggregate. For more details on this, see our Trading Insights out this morning. Second (top right) is just a simple leading indicator for the US ISM mfg index.
It is the y/y change in the S. Korean stocks market (KOSPI). As you can see, while US economic data has persistently surprised to the upside in 2H2011, this trend is likely coming to an end and will begin to rollover again in the new year, perhaps driven by the anniversary of last year’s significant payroll tax cuts. God forbid if Congress doesn’t pass the extension next week. Third (bottom left) is a chart showing the y/y change in the US dollar (DXY) and then a “projected” y/y change assuming various scenarios for DXY over the next 6 months. As discussed here many times, the US dollar has been one of the biggest (if not THE biggest) drivers of SPX earnings growth. For the next 6 months we are potentially facing a much different currency environment that could shave as much as 5-10% off SPX earnings growth on its own. Finally, the last chart shows the relative strength of semiconductors (SOX Index) versus the absolute performance of the SPX. I like this because the SOX/SPX tends to lead the SPX by about 3 months and it suggests the next 3 months is likely to remain rough for US stocks broadly. Since Semis are ultra sensitive to growth, it really suggests that growth is going to struggle in the near term at least from a rate of change standpoint and versus expectations. All of this lines up with my conclusion that while everyone is feeling a bit relieved about the tail risk in Europe being taken off the table, we are about to get a reality check from the micro.
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Tyler... a nit: "Yesterday, we 'breached' the topic..." not sure if this is your inimical humor but it might outta be 'brOached'?
« Once more unto the breach, dear friends, once more! Or close the wall up with our English dead ... »
Shakespeare, Henry V
http://www.youtube.com/watch?v=ikynTH9oJg8
i'm still worried about 2011 bitchez.....3 day weekend ahead one day at a time
I think you need a drink. Or a toke. And you are right.
These last days of 2011 are packed with tension, no?
Eurozone, Iran, Pakistan, North korea, North Africa, Egypt in particular......
And here we come to the days out of time. I think it's important to remember it is how 2011 ends that will set the tone for 2012. Trippy days...
ori
/fractal-animal-hypnotic/
sojourner: maybe broached. inimical or inimitable? hostile or unique?
Good questions Jeff, what do you think/feel?
ori
thanks ORI,
for leading me to MDB.
the gallows humour dude of ZH. His persona is chirpy but in reality is he/she is as dark and as misty as an 18 yr old Talisker.
Actually I'm feeling somewhat serene these days. TPTB are going to do what they have done to us common folk for millenia (even being in the 1% doesn't save one from being pillaged by the 0.01%), so what is the point of worrying?
me too! day at a time is scary sheet!
“... the perfect storm of a macro and micro recoupling in a deleveraging vortex”
Sorry, this simply isn't going to happen. Doomer libertarians have been fantasizing about total economic collapse for decades now, and they have so far been DEAD WRONG.
Many value investors have put their faith in world leaders and the global economy, and there is simply NO WAY that politicians and central bankers have the moral conscience to betray them. I count myself among these investors, and I sleep well at night knowing that Obama and Bernanke are watching my back.
MillionDollarBonus_, I think you are actually a plant by Tyler Durden's Secret Sarc Squad ... doing a survey via how many negative red down arrow junks you get ... as to how many ZeroHedge readers are not getting that you are bombastic sarcastic.
One man's junks, are another man's praise.
One of the best MDB! I smile when I see your avatar pop up, even before I read the post.
Amen
Pray the Lord for our leader's souls and well being.
“... the perfect storm of a macro and micro recoupling in a deleveraging vortex”
That would be bonds and stocks swirling down the toilet in 'The Big Flush'.
MillionDollarBonus, you said:
"Many value investors have put their faith in world leaders and the global economy, and there is simply NO WAY that politicians and central bankers have the moral conscience to betray them."
*cough*
That is some A-1 sarcasm there.
If not sarcasm, do you remember 2008? How about 2001?
And...if all your value investing goes back down to S&P 666, how much was your back being watched?
Hopium springs eternal, I suppose.
Yeah. Bush, Paulson and Bernank were supposed to have their back
Backside, my good man...backside.
And indeed they did.
Tyler,
Merry Christmas, thanks for what you guys and gals do! You are my truly indispensible visit every day, MC to you too MDB..
i like your posts man, you owe yourself an avatar not that goddam bag.
This one would be fitting - http://www.gizmodo.jp/upload_files2/101227pile-of-pills.jpg
Looks like Xanax.
The only way to fly.
Well put, MDB.
As patriotic as we are, we mustn't just give our own U.S. heroes all the credit. Over the past three years we've pulled from the brink, reversed course, and produced a robust and growing economy. Reasonable and prudent value investors recognize that we had help in this economic triumph. Dr. Bernanke certainly earned Time Magazine's Man Of The Year award in 2009, but we live in an era of global economics. The actions of other Nation's bold and visionary leaders deserve full recognition also. Chanceller of Germany Merkel would have been an excellent choice this year, as would have the great French president Merkozy.
The World's leaders have worked tirelessly to find creative solutions to correct imbalances. They've acted in concert to ensure prosperity and stability for all. If here in the U.S. there are enough SNAP cards for the poor, enough jobs for the working class, and enough creative opportunities for our visionary financiers, it is because the World's leaders have worked together so well in 2011.
2012 will be even brighter.
Spot on as usual itstippy. However, I believe this year's man of the year simply has to be President Herman Van Rompuy. Pres. Van Rompuy may not grace the headlines as frequently as Obama, Merkel, Sarkozy or Cameron; but he has nonetheless played a pivotal role in the quest for economic and social reforms. His quiet determination and stoicism throughout this crisis has been simply inspiring, and in my opinion he is the single most underrated leader of our times.
you forget LAdy Ashton! the mastermind of euro foreign policy that irradiates international affairs.
Its a pity that the Brits couldn't spare us LAdy Chatterley. Things might have been livlier...we do need some hi stepping in those early morne corridors of power in Brussels, full of dull spuds n sprouts that muddle through those interminable nights.
lol...we have already determined what they are. Now we're just negotiating the price.
You've left out our great "behind the scenes" leaders, such as Blankfein and Dimon. Those great capitalists stood in the face of draconian regulations and encroaching government, and said "full speed ahead! Damn the torpedoes!". And they have prevailed! Against all odds, they made us all richer and better as Americans and citizens of the world and proved the merit of the productive class. Their bonuses speak for themselves. They create jobs and wealth and only ask a small token in return. Onward, great leaders of capitalism! Continue to do your magic and guide us through the peril of socialists and marxists who seek to destroy us!
Also Mayer Rothschild
Awesome user name!
I thought I did the paraphrase did complete justice...did I not call them whores? Why...yes I did.
Didn't I?
"Continue to do your magic and guide us through the peril of socialists and marxists who seek to destroy us!"
I'm pretty sure DSK is a socialist...lol. As is Papandreou. Its a target rich enviroment. What have they brung to their people except empty promises, deception, debt and disgrace? This is what you defend? This is "your movement"?
Show me the lone bastion of socialist/marxist practice where the leadership is as wealthy as the common street sweeper and I'll show you poverty & misery beyond description.
nmewn -- believe it or not, the answer is not always black and white and it is not always simple.
No, its actually very simple.
1) A capitalist is a guy who risks a portion of his own savings in order to make a profit.
2) A statist is a guy who risks nothing in order to profit if the capitalist is successful.
3) A socialist is someone who risks nothing, depending upon a statist to distribute any profit made by a capitalist equally among them.
4) A crony capitalist is a thief who depends on the statist to distribute a disproportionate amount to them always.
There is zero difference between Dimon and DSK to me.
One is crony capitalist, the other a socialist-statist. It is a symbiotic relationship which bears no resemblance to a guy who risks his savings to buy fruit & vegetables wholesale and then resell them on the street corner for a profit.
Like I said -- believe it, or not. You choose simple. I don't think it's simple, and the fact that you do tells me all I need to know.
A statist will always choose complexity over simplicity.
But you already knew that.
Once again with your black and white. I am not a statist by any definition other than the most simplistic and sophomoric one. But you didn't know that.
"I am not a statist by any definition"
I believe these turd droppings would be yours...
"You've left out our great "behind the scenes" leaders, such as Blankfein and Dimon. Those great capitalists stood in the face of draconian regulations and encroaching government, and said "full speed ahead! Damn the torpedoes!".
Encroaching government? Encroaching nto what? Forcing banks to lend to people who could never repay loans granted with the explicit promise to print the money to cover this novel socialist ideal if it fails? Have you ever heard of these things called FNM & FRE?
Are these GSE acronyms a figment of capitalist imaginations or socialist depravtions?
"And they have prevailed!"
Not quite. But ccontinue your delusion at will.
"Against all odds, they made us all richer and better as Americans and citizens of the world..."
Let me say something right here...I don't give a flying fuck about the rest or the world or this elemental kumbaya reasoning or expression of hope and change that they giving a flying fuck about me or my countrymen.
But we continue with your initial emotional screed...
"... and proved the merit of the productive class. "
Stopping again...what productive class of citizen with any education at all...excepts a ballon mortgage from a state sponsered crony? Isn't this really an indictment of our educational system? Perhaps you can do better here...
"Their bonuses speak for themselves."
No shit Sherlock. Again, social engineering and compensation for it, at the state level.
"They create jobs and wealth and only ask a small token in return. Onward, great leaders of capitalism! Continue to do your magic and guide us through the peril of socialists and marxists who seek to destroy us!"
And you just thought it was about socialists & marxists...eh grasshopper?
Fucking douchebag, quit wasting my time.
^ Plus Trillion, boom!! Way to go, perfect NMEWN!!
Nice circle jerk, guys.
LetThemEatRand:
Surely, you jest.
You cannot possibly be so polar as to believe that Blankfein and Dimon are capitalists versus Crony Socialists milking a complicit Kleptocracy for their ill gotten gains, can you?
Please tell me this is a hearty serving of sarcasm 'fore I question your intelligence and sanity.
He also believes the bailouts are capitalism at work.
Obama increased the size of government by 25% since 2008. The government budget is $4 trillion vs $2 trillion under Clinton 12 years ago. Sarbanes-Oxley was passed. Dodd-Frank was passed. Has it done one iota to stop the wholesale looting of the world by the bankers? Somehow the idiots think that more laws and regulations will stop the looting when the cops are on the payroll of the looters. The DOJ has spent the last three years suing states and smuggling guns instead of arresting Wall Street criminals. Yes, we need more laws.
Of course they repealed Glass-Steagall, the only decent legislation on the books.
Careful, you are going to confuse the children with complex concepts such as the idea that there is good and bad legislation/regulation. They only see black and white. Regulation bad. .
That went over your head. This is a case where we had good legislation but our politicians, or puppets, let it go by the wayside. But the average statist want to concede even more power because they always think the answer is another law.
There's been several complaints on this site about the repeal of Glass-Steagall. We're not a against laws, we're against laws that apply only to certain people. Capatilism works, Crony capitilism does not.
i want to believe mdb and lter, et. al. are like colbert and borat but the replies seem so heartfelt.
Sounds like a Fox News byte...........
Wow.
Wait, I think I'm catching on, let me try:
"Thanks to our glorious leaders, who know better than we do what to do with our money, it has been stolen from the savers and productive and shoveled wisely to the elite and the indolent.
Those independent responsible individuals are so selfish, not willing to join the collective, to admit their powerlessness in the face of power and privilege. The lessons not quite learned by the peasants of France, the serfs of Russia, are now being slowly imbued in the somnolent little people of the U.S.S.A.; who are better off being ruled by an aristocracy of arrogant plutocrats, usurers, and money-changers than determining their own destiny."
Is that it boys?
That would be about it.
Their track record speaks for itself ;-)
Yes, and to hell with those who have the gall to seek to regulate brilliant financial instruments such as credit default swaps and other derivatives, which the productive class hath created to enrich us all.
This will be my final shot at making you understand the difference between you and I.
Henceforth, I give no quarter, so don't expect it.
"Yes, and to hell with those who have the gall to seek to regulate brilliant financial instruments such as credit default swaps and other derivatives..."...blah blah blah.
One of the main purposes of any government is to protect the commoner from a thief.
If you cannot (or will not) understand this most basic of values there is nothing more to say. Except, perhaps, that your avatar is a contradition of what you profess ;-)
Keep your quarter.
No, again you are mistaken, its called keep your "change".
By the way -- it's "the difference between you and ME." And "its called " is "it's called." Simple for one as wise as you.
I'm wise enough to ever be called a grammar nazis, trying to wriggle out of a salient debate point.
Only a low life resorts to this deflection to the topic at hand. But I invite you to take this high road, the air is positively intoxicating.
High road -- like your use of the word douchebag? Like most narcissist Ayn Rand followers, you don't even see the irony, do you? Okay, let's assume you're really smart even though you don't know basic English grammar, and that I should take your ideas seriously despite all objective indications to the contrary. My guess is that you are a young guy who saw the light after reading some Ayn Rand. It all suddenly made sense. You had a "wow!" moment. Ayn Rand gets it! But let me tell you what really makes sense to people like you. Ayn Rand was a narcissist. Her writings seek to justify selfish behavior and indeed make it a virtue to tell others to go suck it. Those whose natural inclination is to tell others to go suck it, see a brilliant white light when they read Rand because she justifies and indeed glorifies their own selfishness and narcissism. The gritty details of deregulating our society (child labor, unsafe drinking water), are of no concern to you because you will succeed in that environment (narcissists are always very confident of their ability to succeed) and you won't need the helping hand of your fellow citizens. You are in good company with the sociopaths running the world.
No, the high road is, not commenting on or correcting your grammar and diction. Sharing thoughts, ideas and philosophy on a blog, twitter or email is not like writing a college thesis.
And a douchebag actually serves a useful purpose to societies & individuals. Its still an open question whether you rise to that basic level. But it was before Christmas, I was feeling charitable...then.
"My guess is that you are a young guy who saw the light after reading some Ayn Rand."
lol...well, I'm over fifty and have not read much on Rand. But I was raised to be very independent. To understand the coy entreaties the "progressive" statist mind will use to remain at the top of the pyramid. Skimming the cream. Sucking off the whole. At least until their state sponsered retirement party.
Can you defend having a federal Agriculture Department that has more employees than farmers? Can you defend a federal Department of Energy whose very mandate was to make the nation energy independent and failed? Heres your chance______________
Can you defend a federal Department of Education that yearly oversees the churning out of students who need remedial classes in basic studies before they can be accepted into universities? Heres your chance_____________
Can you defend DHS-TSA groping infants & seniors by people you wouldn't even allow to touch your car? Heres your chance____________
Traffic light cameras now admitted to being nothing but "revenue streams" by and for statists. Not for the publics safety. It was a lie. Really?...ROTFL!!! No one of any rational mind ever thought they were for the publics safety. I'm guessing you did.
I'm also guessing you thought it a grand idea for zero tolerance drinking & driving laws where someones life is upended over two drinks on the way home from work. There can be no "Happy Hour" in your control freak world can there?
Well, now you have it. No ones happy. Everyones miserable.
How we will remove the cancer without killing the patient is the only question to me.
"One of the main purposes of any government is to protect the commoner from a thief."
Does that come with a government official in everyone's home? Just HOW does That happen?
Power corrupts. You give power and it'll be used against you.
Some are closet socialists, and some are closet idiots...
"Does that come with a government official in everyone's home?"
lol...no. I think everyone is in agreement we can't afford the level we have now.
"Just HOW does That happen?"
We could try reverting back to the rule of law and the rigid enforcement of it instead of this concept of making it up as we go along...after every election cycle.
An oil company deserves no taxpayer subsidy, neither does a ethanol producer or solar panel maker. Another example is, the government can't create laws that infringe on the rights of a citizen walking in the gun shop front door, while running guns to Mexico out the back door. Another example is, TSA (and now Congress itself) treating every citizen as a suspect. You're familiar with the ever growing list of grievances by now.
"Power corrupts. You give power and it'll be used against you."
I understand.
But we consent to it always first. Everyone knows I'm not an anarchist.
If we agree to live with each other and not kill & steal from each other, there will always be rules created among us. This is law. This will always involve enforcement for violation. It means government at some level.
The trick is to find the least corruptable among us for this duty.
"Some are closet socialists, and some are closet idiots..."
I've often remarked that we could take a cross section from the comment section of ZH and do far better than the "idiots" we have now ;-)
People want good ethics. And people want fairness & justice. You see it everywhere. If this experiment with self governance goes down the tubes and we revert back to tyrants & monarchs we'll have no one to blame but ourselves.
Seer, we've had our differences of opinion in the past. We'll have them again in the future. But for this short period of time I wish you peace.
Seeya
"If we agree to live with each other and not kill & steal from each other, there will always be rules created among us. This is law. This will always involve enforcement for violation. It means government at some level. The trick is to find the least corruptable among us for this duty."
You just saw the glue on the Ayn Rand unicorn horn. Now back up and think about it. There is no unicorn. Ayn Rand at the root wanted to replace elected leaders (who have the annoying habit of sometimes doing things that benefit the little guy), with robber barons. Most of her followers fail to account for the fact that the robber barons are doing most of the corrupting of our current politicians. So basically they want to cut out the middle man. Alan Greenspan famously admitted that the philosophy fails to account for the corruption of the "productive class."
Your power of observation has become delusional.
Again, LetThemEatRand, this must be baiting sarcasm.
A 40-1 leveraged instrument that is little different (worse) than a craps roll in Vegas?
Derivatives in the same sentence with productive?
Gall? Gall is robbing old people and unborn children of their future and pretending to be something more than a maggot.
ebworthen -- Million Dollar Bonus believes that Lloyd and Jamie are part of the "productive class" because they make a lot of money. Same mistake Ayn Rand made. Like the socialists, the marxists, the communists, etc., capitalists can be evil and destructive too. The answer is not simple ideology, but messy problem solving. Yes, I was being sarcastic.
MillionDollar is a troll. Are you that dense to believe what s/he posts?
Whatever happened to Sarbanes-Oxley and Dodd-Frank? If the current laws and regulations aren't being enforced, what makes you think more laws and regulations would stop the theft?
The only ones troubled by overbearing laws and regulations are the honest people and businesses. The reason the looting is still going on isn't because of a lack of laws and regulations. It's due to a lack of arrests and prosecutions. If we on ZH and other blogs can so easily point out the financial crimes and schemes, why can't the FBI, IRS, SEC, DOJ and other enforcement agencies see them?
John D Rockerfeller once said that competition is a sin. The crony capitalists and statists are working together to snuff out small and medium sized businesses. The laws don't apply to those who are connected.
"MillionDollar is a troll. Are you that dense to believe what s/he posts?"
You're using labels rather than debate. That MillionDollar is a troll is not the point (could be, could be just sarcasm [which is what I see]), it's what is said (not how it's said).
I think that it's fair game to question the choir, to question the premises that people assume.
Dimon et al are a product of the System. PERIOD. And, that "System" is by all accounts touted as being predicated on "Capitalism." Humans are imperfect. Humans are deceptive by nature. My problem with the "if only we had PURE <insert your favorite ideology>" notions is that they fail to account for these FACTS. So, LetThemEatRand has a valid point. My stating this also does not invalidate my position that I also believe that you have valid points, that more laws and regulations aren't the solution. Eliminating laws and regulations, however, would have the same affect- the less-than-honest people will still have their way; yes, the "honest" people might, theoretically, have less intrusion but... it's the less-than-honest people that flock to the levers of power and influence by which they continue their practices of dishonesty. This is why I argue that there's no level of govt (in a State form, one that's of a vertical hierarchical nature) that I believe could "protect" us to any meaningful degree (w/o also resorting to using that power against us).
For what it's worth, I believe that Gary Chartier's views are closest to representing mine: he, however, is far more educated than I.
That's what scares me about all the De-Regulate Everything talk. When I was a kid, we'd hop in the car with mom to pick up dad at work (Monsanto). The river next to the plant ran brilliant, milky colors everyday (red, orange, green, blue). It depended on what plastic the plant was cooking on that day with the waste being dump raw into the river. The EPA finally put a stop to it in the '60s. This is why bacteria populations die off in a petrie dish -- poisoned by their own excrement.
The deregulation crowd also glosses over:
1) child labor, which continues in countries without regulation including at the behest of American companies;
2) labor laws in general (think you could demand safe workplace standards in a deregulated/free market environment?)
3) monopoly formation (replace the government with captains of industry, and guess what you get -- ask the 1920's)
4) product safety (ask China about lead in toys)
and I could go on. The truth is that they don't care. Most Ayn Rand followers I know believe that they are part of the privileged/productive class, and that they will be able to buy all the clean air, clean water, safe products etc they want. They don't need to worry about labor laws because they plan to hire the labor, not vice-versa. The rest of humanity can go suck it. That, in a nutshell, is their philosophy.
You hear exactly what you want to hear don't you?
1. There's very few anarchists, if any, on this site.
2. we still believe in capitalism, not crony capitalism, which is what we have now. We are tired of statists that come here bashing pure capitalism claiming that is the reason for our current woes.
3. Many few are politicians are puppets purchased by the Central Banks that continue to pass legislation that screws over the average American.
You and I are in complete agreement that crony capitalism is the problem. Where I disagree with many posters on this site is the idea that pure capitalism/Ayn Rand individualism is the solution. What you are suggesting, I presume, is to take back our elected government from the globalists and fix what is wrong with the system as opposed to throwing out the system which would de facto put the globalists in charge. In that, we agree 100%.
But imo pure cqpitalism doesn't mean no laws, the Founders tried this and it was met met with failure. Pure capitalism means that everyone works within the same laws and they are applied uniformly. If all parties share risk than you don't need the tens of thousands of bullshit regs currently on our books. I also agree that the EPA is neccasary otherwise this sob's that only care about the bottom line will have us swimming in pollutants, not that they don't already.
We may (or may not) disagree with the full extent to which government should be reduced from its current out of control and bloated state, but we both seem to agree that government regulation to keep the robber barons in check is necessary. The Rand worshipers on this site, conversely, tend to view the world in very black and white terms because that view of the world justifies all manner of narcissist behavior. I will vote for Ron Paul because I am sick to death of the police state/crony capitalism country we have become and he is the only candidate who is even talking about real change. But what I really want is a progressive libertarian who understands where small government makes sense, and where it does not.
Seer - I believe on of the major issues at hand is not the transfer of wealth (that has always been happening since the beginning of money) but the exchange and flow of information. We now have the capabilities to read up on what laws the wealthy and elite are breaking and because we are jealous of them we try to cut them down to our size - humanize them. Most fail to see everyday they too are guilty of breaking various laws - but it is ok because they are just little tiny laws. The wealthy break big laws that sometimes make them a lot of money and they get away with it due to political connections. I guess what I am trying to say here is before we start pointing fingers at others we must first point the finger at ourselves.
Thanks for the clarification.
Not bad for a first effort.
When you speak of "visionary financiers", I assume you are talking about Corzine.
"2012 will be even brighter."
Those hedge fund managers and economists who predicted the 2007/8 collapse using data and reasoning that in retrospect is highly obvious disagree with you using data and reasoning that will be highly obvious to you and most everyone else in 2012.
How can you call yourself an "Investor" in this market? You are more like a "Gambler" now, just the fact you said you trust Obama and Bernanke at the helm. You are now betting your money on what Bernanke has to say, and not on the fundamentals of trading anymore
That we're now seeing the underbelly of the System doesn't mean that the underbelly just came to be.
Trading has ALWAYS been manipulated. It's just that today we're more able to see this closer to real time (though still a few nanoseconds too late to "invest").
The grow-or-die meme is a Ponzi. Cleaning up a few "rules" isn't going to transform the spots...
i lol'd
+$15 trillion and some change with a dash of hope
When reading comments posted by MDB, you're better off with hash and dope than a dash of hope.
Well said.
Don't be a Bogart - pass it on!
O they're watchin Mdbs backside allright if ya kno what i mean wink wink
Reggie is that you?
How can you be both right and wrong? Yours is a unique talent MDB
Not only are MDB's postings humorous but they are also enlightening. The reader gets to see just how ludicrous the views of the MSM and the "All's well" brigade really are when they are put down in black and white, albeit in a tongue in cheek manner
+1 for humor
I agree with million dollar bonus we should kill them all
^30 Obumma and bernanke... he he!
No dice.
That was said when invading france...Do you see UK wanting to marry France and Euro...singing...Lay on HArry, we'll follow you to Agincourt and join the euro. Harry Cameron???
Thanks Tyler for all the work you did over the past year trying to keep us informed and educated on the real economy. Merry Christmas.
FUCK YOU MORGSTAN! LAME-O VAMPIRES!
+1
It's not a nit! This copy is sloppy, and getting more so (eggnog?) Really, Tyler, it's getting to the point where we have a 'failure to communicate
'! Lets take up a collection for copy editor!
Good catch!! O is my wife's favorite letter by the way, wink wink.
I think you might also find that accepted usage is to broach the subject - not the topic.
Eg. I was reproached for approaching the coach and broaching the subject of poaching Roach.
'All of this lines up with my conclusion that while everyone is feeling a bit relieved about the tail risk in Europe being taken off the table, we are about to get a reality check from the micro.'
Taking Europe off the table? Now that is radical. Disruptions from EZ will remain the topic at least for Q1.
Q1? Don't be silly!
Greek this, Purtugal that has been in the headlines since '08 fairly regularly. Unless them skittles are 24k gold in the center the EU Kabuki will continue for as long as they can drag it out. Which could be a long time. Hope everyone is stuffing their (and their kids) stockings with 9mm $ 7.62x39
if europe wasnt in the headlines the euro would be at 1.75 and german exporters would be ddying
Greece and Portugal are the edges fraying, the edges of the grow-or-die system. Energy consumption will be drastically reduced here, which will afford the other energy-dependent nations that are "productive" a bit of relief. This, however, will only be temporary. The slippage will continue to the point that the tipping point is hit: economies of scale in reverse will come MUCH quicker than most could imagine.
It's a Three Ring Circus. In Ring One we have this shit, which is about demand destruction, hidden under the veil of "austerity measures." In Ring Two we have the demonization of competing consumptive nations- BAD China! And in Ring Three we have the evil hoarders of oil: Iraq (still), Iran, Venezuela and Russia. Toss in Syria and others just to be sure that Israel doesn't feel ignored (they're good for channeling US military exports).
Can one kill zombies with a 9mm? Hm...
ooopsdoublepost++
Merry Xmas BICHEZ!
payback is a bitch, bitchez!
The report above says:
« ... assuming the situation in Europe doesn’t implode ... »
Minor assumption there, ha!
The banksters harassed the guy who had the US Mortgage Lender Implode site ... I guess here ZeroHedge is the Sovereign Lender Implode site
Soon perhaps with a similar lede
" ... XX Sovereign Lenders have IMPLODED since September 2008 ... »
Wall Street is a Criminal Enterprise...............
concerning europe : what the Roubini interview said :
Short term : LTRO 3 year window covers bank liquidity. IMF 600 B fund play covers Italy/Spain financing upto mid-2013.
Medium term : The ESM play should allow some limited back up for core countries. Here is where the clutch play is on the bank run front. It could blow up if the spread grows on say Italy. And France gets downgrade. Greece will probably step out, as will Portugal/Ireland...This is crucial moment, sometime between mid-2012 and mid-2013, when things will be at break point, AT LATEST.
Long term : Beyond 2013? Ha, ha! If Euro still there, the budget discipline, if its not killed all growth in Eurozone CORE, will start showing effects. The Euro official line is they will be out of woods in 2104-2015 for Spain-Italy. Ha, HA. Big IFFFFF.
Too many ifs, too many balls in the air.
Hahaha.....I always like getting forecasts from Banking Parasites that profit from organized bubble crashes and the taxpayer bailouts that follow.
Lol...."Come to the Casbah my little ones"......Pepe Le Moko needs yer money.
These are the same criminals that got caught charging clients storage fees on precious metals that didn't exist in the vaults.
Yeah...I think I'll pass on the target forecasting
http://www.youtube.com/watch?v=ExQocj_bhG8
"Yeah...I think I'll pass on the target forecasting"
Exactly. Why do people even listen to these parasitic clowns any more?
Morgan Stanley is just jealous that they weren't in on the MF Global heist, and JPM was able to steal in broad daylight. Jamie Dimon said others are "jealous of him", so now I know what he meant.
bob diamond eats jamie's lunch daily,... and sometimes dinner?
Tyler....this classic silver video give you a big shout out....Silver Bells ZH video
If every large trading bloc sets up a bad bank--the Fed (and GSEs), the ECB, and coming soon the BOC, and buries all of the bodies there why can't the game continue? We've printied a good 3 trillion on both sides of the Atlantic so far, and no one seems to have a problem with it. And both the ECB and the Fed are gassing up the helicopters. How does this crap stop?
"How does this crap stop?"
Like it always does, when physical reality is proven to be vastly different than book/virtual/criminal "reality."
The Soviet Union collapsed when its "productivity" was all on paper: what was that quote? "they pretended to pay us, so we pretended to work."
But... it's going to be more systematically fucked up than just this. In the past there was a way to prime the pump with actual physical resources. This won't be the case from here on out. In the past, before it was a full-fledged "global economy" the powers could knock someone off to achieve "growth;" those that were knocked off we're really plugged in, their resources didn't really show up on the balance sheet (if they had, then knocking them off wouldn't have changed the global balance sheet). Today there's really no one to knock off that's not already sufficiently influencing the global balance sheet. Hedge funds will keep making it tough to fabricate non-realities.
As I keep repeating, economies of scale in reverse is going to take things out rather quickly.
Anyone remember how people were worried about Obama's cocaine usage? http://www.disclose.tv/action/viewvideo/36884/Barack_Obama_Cocaine_Use/
Just thought I should throw that out for all the people who like to kick up old dirt.
I wish cocaine was his only problem.
This all reminds me of the supermarket tabloid shit, and the people that spend precious time with "reading" it. It's all the same smear shit, same as with GWB. Really, you mean that these people AREN'T saints? OMG!
As long as you have a seat of power it'll be occupied by an sociopath.
But, I suppose, people are free to keep playing their fantasy games (party politics).
Higher gas prices? Sounds like Lovecraft Time!
I'm getting my mom's Mercedes made into a Lovecraft for Christmas. When I lived in LA, a bunch of my friends has converted theirs and they are all still loving it.
At the time, I wasn't into this hippie shit because of the obvious reasons, but now, it's more about getting off their grid, off of anything and everything that supports the interests of the people that are currently turning our country into a Banana Republic.
http://www.lovecraftbiofuels.com/
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn
Spot on, Stoogie! Damned ersatz veeblevetzer cartel.
Lovecraft Biofuels - Put A Shoggoth In Your Tank
Ah yes the last of the stimulus money "in the couch" has been spent. And the Fed is becoming a downright reluctant party to more QE. The picture of biflation isn't pretty: get set for stubbornly high prices in the face of declining margins, incomes and net worth. Demand down but prices up. Needless to say that will be a problem for employment. And earnings and revenue. Globally.
No longer any "future" left to steal from. This is highly problematic on several fronts...
The Machine managed to goose the stock market on light volume over the past 4 trading days. Too bad the closing price on the S&P 500 today (1,265.33) was lower than on Jan 6, 1999 (when it closed at 1,272.34)... not even considering inflation... that is not too impressive.
http://finance.yahoo.com/q/hp?s=%5EGSPC&a=00&b=3&c=1999&d=00&e=10&f=1999...
Eurozone debtpocalypse deleveraging downward vortex!
S&P 666 redux is demanded by reality, Ludwig von Mises, and the invisible hand!
And Mother Earth is the Invisible Bear...
"If one adds a full blown European collapse to the mix, then the perfect storm of a macro and micro recoupling in a deleveraging vortex will prove everyone who believes that 2012 will be merely a groundhog year (in same including us) fatally wrong."
Are you saying that you also think 2012 will merely repeat 2011?
"The good news is that fundamentals are about to take centre stage again, the bad news is that it's likely to be negative."
very good quote, just about sums up my 2012 outlook.
http://kelpie-capital.com/2011/12/22/2012-outlook-predictions/
For buy and holders of dividend stocks, 2011 one of the best years ever.
Tons of volatility, but the dividends keep on paying.
Anybody betting on a doomsday scenario, Peak Oil, crashing dollar, or skyrocketing gold prices were taken to the cleaners.
As far as the XRT and RTH, one of the biggest 3-year runs ever.
Hats off to all the bulls who hung on and didn't get shanked out of high quality stocks during the selloffs.
How about the blokes who have held a stock portfolio over the past 12+ years that traded similarly to the S&P 500?
The closing price on the S&P 500 today (1,265.33) was lower than on Jan 6, 1999 (when it closed at 1,272.34)... not even considering inflation... that is not too impressive.
Just buy low sell high
Gold is up ~15% this year you stupid fuck.
And WTI about 9%
Hope you enjoyed your high quality BAC dividend
Yea, actually, they'll just keep ramping up the market and printing like mad.
But, it's an interesting article.
All the big banks now agree 2011 will be harsh so why shouldn't everyone take the other side of the trade? Sure we may have volatility but it is an election year, good luck trying to fight global QE, fantastical economic headlines, "unexpected" and "surprise" everything, upside earnings surprises, and of course the ever popular "world is saved" sentiment etc etc or should I go on?
To bad this all takes longuer than on television soap series...
Or else this shit would be happening in 5 minutes from now
I've got that end of 2007 feeling...
Yogi Berra sez: It's hard to make predictions, especially about the future.
"everyone is sick and tired of trading headlines and trying to decipher the next statement/rumor surrounding Merkozy, central bank policies, Washington politics, etc."
Not me, just today I told a buddy of mine "waking up to the headline 'Italian auction sets new interest rate record' is like waking up to your wife giving you head"
Santa Rally off the lows was pretty easy to predict. Hopefully it's run it's course, with the Tax cuts being extended. But even if it lasts a few more days at some point very soon this mkt is going to shit itself.
Tax cuts aren't stimulative... We are just avoiding taking $ out of the system. And since the gvnt will have to borrow money to finance them, they are actually taking $ away from some company that could create jobs with it.
Oils $100 and gas is meaningfully over $4 everywhere I look. Wages are rising slower then inflation. Unemployment remains high. There is no way bullish black Friday anecdotes prevent retailers from disappointing I'n Q4.
Italian 10 year back over 7% with big auction coming next week. Likely to be a failed auction with some coverup to make it look better.
Greece likely declares unvollentary bankrupcy in next 1-3 weeks. They need something like 20bbn euros by Jan 21. An the rumors of a 75% haircut have reached CNBC meaning it's not just a rumor.
S&P to cut all of Europe in the 1st week of Jan
Q4 likely to be the start of 3+ Qs where abnormally high #s of companies miss estimates.
Seriously, how much better does the setup get? Particularly at 1,260 where it gets harder to break out the "historically cheap" BS. I mean what multiple should we pay for 1-2% real GDP growth, tax uncertainty and earnings going into decline.
Yep. I think once we get into January, it will be much easier to trade because when the market takes a dump, it's going to be a big one. Bigger than 2007-2009. Get on the short side and watch the money pile up. 1260 down to 600 like a hot knife through butter.
Here's to hoping buddy. I have puts on the banks (US/European), EWP, FXI and EWI expiring between Q2 2012 and Q1 2013. Time to see what the Emperor is really wearing - BAC, I'm talking to you buddy.
Reminds me - got to pull more cash out of my BAC account.
BAC? I am hearing that they now own 54 Trillion of cds's brought over from merrill Lynch this year to the FDIC BAC side. Maybe that GF Global was a test run for overnight wipeouts.
I hope the short pays out and they don't halt/freeze shorting...
My money's in an FDIC guaranteed account, but hey who knows what's going to happen when TSHTF right?
I'm stuck here - I travel into various locations in the US regularly, so I need a nationwide bank. Also, due to new regulations - much harder for a foreigner to open bank accounts in the US. So I'm stuck with what I already have. I don't have a whole lot because of BAC's failure risk, but I hate their balance sheets, so I have puts.
uhh, i read its 75 trillion total they are gonna push off on the taxpayer.
could that be what starts the riots?
Dude...manage my book. You go to the front of the class. There is not a hole in your logic unless the world wants to believe the BS coming out o the IMF et. all and that fixing Europe "pronto" will goose things! LOL
Not to be a Scrooge on Christmas, but how is there going to be a big 2012 GDP recovery? Look at LT durable and nondurable employment.
Jobless Claims and General Employment Trends – The Bigger Picturehttp://confoundedinterest.wordpress.com/2011/12/24/jobless-claims-and-ge...
I actually think this article is a year early:
1. Presidential election=no crashes
2. Politicians still have a corporate holiday tax in their back pocket.
3. Facebook IPO will lift the market sentiment for a few months during the summer.
4. Bernanke can and will print again.
2013 looks gloomy. If Obama gets a second term, and that looks likely given the GOPs lame candidates and refusal to accept Ron Paul as legit, he can/will let the economy collapse as an excuse for more government control/spending.
Father do you have some Goldman shorts for an old choir boy?