Arguably nothing can ever be quite as amusing as the Michael Pento-Simon Hobbs incident from July in which the now brainwashed Brit told the recent EuroPac addition that he was just "peddling the power of nightmares" (not even Pento getting booted off by Erin Burnett, although the fact that some idiot uttered the now legendary phrase "nothing is in a bubble when people want to buy it" certainly gives the clip brownie points for retention in the annals of CNBC's worst all time bloopers) when all the outspoken critic of the Fed said was the truth. Alas, today's interview of Gary Schilling by the same British H1-B/Green card holder comes nowhere close, however it certainly should be highlighted. Following up on Diana Olick's presentation of Clear Capital surprising announcement that home prices had dipped 6% in just two months (we can't wait for Cramer's take on this development even as housing "bottomed" last June), and warning that fraudclosure will certainly cause prices to dip even more, it is Gary's turn to "peddle some nightmare powers" to Hobbs. To wit: the CEO of Gary Shilling & Co. sees home prices tumbling another 20% over the next few years, and the number of underwater mortgages nearly doubling from 23% to 40% (meaning nearly half of America will likely strategically default as nobody has any initiative to pay down their mortgage when they know there is no equity value left). And even when Hobbs tries to pull the old Pento one-two, and tells Shilling that "you do admit in your own writing that very few people would agree with you" to which the old fox answers: "what forecast is really worth much if everybody agrees with a consensus: it doesn't add much value..." Sorry, Gary, you are preaching to the wrong propaganda station: this is easily the first time they have ever encountered such a radical and subversive idea.
Luckily, Simon for the first time reads the counter bullet points that anchors over at Comcast (or is that still NBC?) are fed: "The problem with what you are describing is if you have prices falling by that degree, you get some very bad negative feedback loops that are set up in the economy about the number of people that therefore go underwater and the grinding down of confidence that moves on and on and has serious repercussion in the economy overall."
Spot on old chap. It is far better if the vast majority is lied to using manipulated data day in and out, so that when the inevitable collapse finally does occur nobody is prepared for it. And Americans wonder why they are broadly viewed as sheep being led to the slaughter not only by their own government, but their media too. Of course, when one dares to question anything, the response if that one is a traitor, and either puts troops in harms' way, or is a conspiracy theorist, no matter how many times said theories are proven to be fact, or best of all, is "disappeared" on grounds of the greater good. Good thing the media also helps us clarify it was the USSR Ronald Reagan was talking about when he referenced the "Evil Empire"... cause one sure could get confused.
Anyway, Shilling also says some more things about deflation, and bonds going to zero which readers have heard or read about a million times so no point in rehashing boring details.
Full clip which confirms that anyone buying a home and putting any equity down, is mentally challenged.