How Long?
01-16-2009, 12:58 PM
#1
With The Resistance
Thread Starter
Joined APC: Jan 2006
Position: Burning the Agitprop of the Apparat
Posts: 6,191
How Long?
Don't Worry, Be Saavy: Learn To Love the Abyss
Don't Worry, Be Savvy
Learn to Love The Abyss:
Future's Brightest When Present's Darkest
It's always darkest before dawn so the last thing savvy investors should be dwelling on are the awful jobs, retail sales and factory production reports of the past month, or other backward-looking stats. That's not the way to get a jump on future opportunity. Junk the funk. “Malaise" talk is bunk. We haven't sunk, so don't be a skunk, because too much pessimism will cost you.
Barring a geopolitical apocalypse or the biblical Book of Revelations coming to pass (quite a few signs of that, actually, but never mind) things will get better. It's not a matter of if, but when. Here's a guide on early signs to watch.
The recession gets older
A recession is kind of like a bad movie, an awful marriage or a...President's term in that, paradoxically, the longer it runs, the closer you are to The End. It's also kind of like a fruit fly or a gerbil (at its worst) in that it doesn't last very long in man-years. A recession is, among other things, when excesses built up during the last boom (binge) are worked off, clearing the way for the next expansion (binge).
History can be a useful guide. There have been 32 recessions averaging a lifespan of 17 months since 1854, according to the National Bureau of Economic Research which authoritatively records and reports such things between releasing great reads such as Christina Wang's compelling “A General-Equilibrium Asset-Pricing Approach to the Measurement of Nominal and Real Bank Output” and Benjamin Mailin's steamy “Computing Stochastic Dynamic Economic Models with a Large Number of State Variables: A Description and Application of a Smolyak-Collocation Method.”
The current recession began December 2007, which means that by the “average” yardstick we have only 5 months left.
But, but, but, this one is different: Biggest financial wipe-out since the dinosaurs. Trillions lost. Massive debt. It's global. Synchronous. Robin Williams and Morgan Freeman are divorcing from their wives. We're doomed, doomed! Yadda, yadda, yadda. Fine.
America's worst uninterrupted depression started in 1873 and lasted about 4 years and 5 months. By that yardstick, we have about 3 years and five months of more gloom, doom and “Grapes of Wrath” remakes to endure (that's not an insignificant amount of time, but not much more than what you'd use up getting that graduate degree you always wanted).
But, but, but, what about the Great Depression? Wasn't that the longest? Technically? No. It was one of the deepest, no doubt (the unemployment rate skyrocketed to a shiver-me-timbers 25%), but it actually lasted less than four years starting in 1929. That was before a 50-month expansion started in 1933. The economy later succumbed to another round of recession in 1937 that lasted another 13 months.
The odds this U.S. recession will extend beyond all this are not zero especially if government policy makes a mess of things. More on that later.
The media and talking econ-heads start blabbing en masse about “Malaise”, “The end of prosperity” and “The Decline of America”
That'll be your cue to break out the bubbly (or find out where you lost it), just as sure a sign as it was to dump Amazon and other dot-com stocks back in the late 1990's when CEO Jeff Bezos and the like started appearing on Time Magazine covers (adios, Google). Industry economists and many (though not all) media outlets tend to be backward looking and risk averse, entrenched in hidebound institutions geared to a kind of herd mentality or GroupThink. As a reporter, try getting a risqué out-of-the-box, conventional-wisdom-defying story past an editor worried about his rep and job security.
Few analysts have the guts to stick their necks out or the spare resources to be able to afford to do so (a big shout-out, by the way, to my homey, Euro Pacific Capital's Peter Schiff, who audaciously, consistently and elegantly warned us all this chasm was coming...and of course got routinely lambasted and ridiculed on Fox, CNBC and other outlets as the Village Idiot), so you should also look for the next conventional-wisdom-defying Oracle currently being widely lambasted and ridiculed.
Leading market indicators start becoming less red.
Fight Dow Syndrome: Stop focusing on the Dow Jones Industrial Index. It follows a mere clutch of sclerotic, government-subsidized (and, some, bailout-hugging) Fortune 500 albatrosses that are unlikely to lead the next expansion (binge). It's small, nimbler firms closer to the ground and mom's garage that'll likely be the quickest to hire (remember, small business are the source of at least 60% of America's employment and a healthy chunk of its innovation). Focus on lesser known stock indicators such as the Russell 2000 index of small cap stocks, which has historically sent out earlier, or at least louder, alerts ahead of and during previous turning points.
Look for less flight from risk and more risk-taking. Follow reports on risk spreads in the U.S. and global bond markets, such as the spread between yields on U.S. junk bonds or emerging market debt and Treasuries. These spreads are the premium investors and creditors are demanding for taking on risk. When those spreads shrink, that means frozen investors are starting to chill out and get frisky again. The London InterBank Offer Rates (or LIBOR, a measure of the willingness of big banks to trust and lend to each other) should come down, which they have since spiking weeks ago. Initial public offerings, as tracked by Renaissance Capital and venture capital activity as tracked by PricewaterhouseCoopers should start to perk up. Fewer new suicides and divorces in and around Sand Hill Road and Wall Street should pop up on Google keyword searches.
An article buried in business pages a couple weeks ago reported evidence risk aversion might be diminishing in Europe. As I type this, gleeful vulture funds are setting up shop and snapping up worse-than-junk corporate and mortgage debt, essentially taking stakes in foreclosing properties across California for a song. Look for merger activity and write-offs to pick up, signs excess capacity and the malinvestment of the past is being worked off. For signs of a turning point, look for markets to start positively reacting to news of layoffs instead of the negative way in which they're reacting now. Note that in the first few minutes of the opening bell, the market's reaction to the release of that abysmal U.S. jobs report earlier this month was positive. That's significant.
Look for the yield curve -- the graphical representation of the difference between short-term and long-term Treasury yields -- to steepen with expectations that demand for funding (the funding that fuels expansions) will pick up in the future (and interest rates with them) just as the curve flattened before the stock market reached its peak, as you can see in this very cool animated chart on Stockcharts.com. Look to the fed funds futures market, where speculators trade on what the Federal Reserve will do next (subtract all the prices you see from 100 to get the predicted fed funds rate for each coming month). It will show signs the Federal Reserve could start raising short-term rates in the months ahead, but be mindful that this could reflect expectations for either stronger growth, greater inflation or both.
If and when you start to see some of these and other lights flashing green (or less red), Whoppee! It's Party Time...or it will be soon (just a "wup").
Backward looking stats, which are not completely useless, start showing slowing slowdowns.
Economic stats aren't completely useless. There are forward looking ones which will are helpful in identifying a turning point, and you don't need an economist to decipher them.
Look at the housing market's inventory-sales ratio, or months of supply, of new homes and resold homes. They're read as the number of months it would take the current glut of unsold homes to be sold off at the current monthly sales rate (turning points in the business inventory-sales ratio can also be useful to an extent). Look for stabilization in the National Association of Home Builders builder confidence index. Check out the Federal Reserve's factory capacity utilization numbers (data, chart) -- you're looking to see if factories are working down excess capacity and heading back toward 100% use. Look at monthly durable goods (big-ticket equipment) orders figures and especially orders for non-defense capital equipment as an early gauge of business investment. The index is volatile, highly affected by Boeing's massive orders, but a bump on that front would, in itself, be a good sign, and you can use a multi-month average to smooth out its wackiness.
Even employment is useful, but not the monthly payroll figure you always hear about, and heard about earlier this month. At any given time, both hiring and firing go on in this churning economy. Look at not-as-closely-watched reports for a slowdown in firing (like job cut figures from Challenger, Gray & Christmas) and, separately, a pickup in hiring (like the Conference Board Help-Wanted Index).
The Conference Board's index of leading economic indicators is also useful (but not perfect or as early a warning signal). It's a composite of some of the signs mentioned above if you'd rather not track them all, because “House” is on Monday, "Scrubs” is on Tuesday and “Battlestar Galactica's” season premiere is on its way.
In the case of both forward looking market indicators and economic stats you also want to look for -- want to look geeky here -- "concavity" or “an inflection point where the second derivative goes from negative to positive.” In other words, you want to see the implosion go from accelerating to decelerating. You want to see the speed of decline....err, decline (that's not a typo), kind of like an airplane in a nosedive, where the pilot's tries to pull up, attempting a crash that will kill half of the passengers instead of all of them. At that point we'll have reached an inflection point even before reaching the rebound point.
Look for signs that office lease rates, house rents, real estate prices, office vacancy rates are also in the midst of such an inflection point. These barometers are not going to fall this fast forever.
Even normally, mostly useless consensus forecasts of the monthly econ stats can be made useful -- if you look at their margin of error. As an economy goes from boom to bust, the consensus starts grossly underestimating how bad the stats will get. Near or at the bottom, they start getting more accurate. And then they start underestimating again, but this time they underestimate how much better the monthly stats will be. Look for all that.
Anecdotes, hearsay and actions by those in the know start perking up.
I'm not talking about the Fortune 500 CEOs you'vesee on CNBC (please, many of them are clueless and insulated from reality by several Kafkaesque layers of yes-men or restricted by the PR department and fear of litigation from saying what they really think besides "it's all good" and "our industry's as bad as we are").
Try to get a sense from people on the front lines at mostly smaller firms. I'm talking about customer service people, purchasing managers, secretaries and waiters. Watch the waiters...oh, and real estate agents, too. When their grimaces start turning into crooked frowns, it's time to pounce (on the market, not your waiter). It may already be well past time.
CEOs aren't completely useless, but watch what they do -- watch what everyone does -- not what they say. Look at inside purchases of their own company stock using ThomsonReuters' fantastic Insider Trading Monitor. If net insider purchases start going up, that will be further (belated) confirmation a turnaround may already be upon us. Home builder executives started dumping company stock at record rates in 2002, at least two years before the housing market started to buckle.
I've started a blog (hasn't everybody?) called Track The Turnaround that will monitor these and other signs on a daily basis, so drop in and contribute your own forward-looking observations, won't you? Maybe we'll spot the turning point together before the herd does.
Now, before I go, I must mention the big fat caveat to all of this.
Governments: Ours and Others
Government plays a role (heaven help us). The odds this U.S. recession will extend beyond the average length rise dramatically if DC makes a mess of things. A 1997 survey by Robert Whaples of Wake Forest University finds a surprising 27% of historians and 49% of economists believe bad policy made the Great Depression deeper and longer.
Continued.......
Don't Worry, Be Savvy
Learn to Love The Abyss:
Future's Brightest When Present's Darkest
It's always darkest before dawn so the last thing savvy investors should be dwelling on are the awful jobs, retail sales and factory production reports of the past month, or other backward-looking stats. That's not the way to get a jump on future opportunity. Junk the funk. “Malaise" talk is bunk. We haven't sunk, so don't be a skunk, because too much pessimism will cost you.
Barring a geopolitical apocalypse or the biblical Book of Revelations coming to pass (quite a few signs of that, actually, but never mind) things will get better. It's not a matter of if, but when. Here's a guide on early signs to watch.
The recession gets older
A recession is kind of like a bad movie, an awful marriage or a...President's term in that, paradoxically, the longer it runs, the closer you are to The End. It's also kind of like a fruit fly or a gerbil (at its worst) in that it doesn't last very long in man-years. A recession is, among other things, when excesses built up during the last boom (binge) are worked off, clearing the way for the next expansion (binge).
History can be a useful guide. There have been 32 recessions averaging a lifespan of 17 months since 1854, according to the National Bureau of Economic Research which authoritatively records and reports such things between releasing great reads such as Christina Wang's compelling “A General-Equilibrium Asset-Pricing Approach to the Measurement of Nominal and Real Bank Output” and Benjamin Mailin's steamy “Computing Stochastic Dynamic Economic Models with a Large Number of State Variables: A Description and Application of a Smolyak-Collocation Method.”
The current recession began December 2007, which means that by the “average” yardstick we have only 5 months left.
But, but, but, this one is different: Biggest financial wipe-out since the dinosaurs. Trillions lost. Massive debt. It's global. Synchronous. Robin Williams and Morgan Freeman are divorcing from their wives. We're doomed, doomed! Yadda, yadda, yadda. Fine.
America's worst uninterrupted depression started in 1873 and lasted about 4 years and 5 months. By that yardstick, we have about 3 years and five months of more gloom, doom and “Grapes of Wrath” remakes to endure (that's not an insignificant amount of time, but not much more than what you'd use up getting that graduate degree you always wanted).
But, but, but, what about the Great Depression? Wasn't that the longest? Technically? No. It was one of the deepest, no doubt (the unemployment rate skyrocketed to a shiver-me-timbers 25%), but it actually lasted less than four years starting in 1929. That was before a 50-month expansion started in 1933. The economy later succumbed to another round of recession in 1937 that lasted another 13 months.
The odds this U.S. recession will extend beyond all this are not zero especially if government policy makes a mess of things. More on that later.
The media and talking econ-heads start blabbing en masse about “Malaise”, “The end of prosperity” and “The Decline of America”
That'll be your cue to break out the bubbly (or find out where you lost it), just as sure a sign as it was to dump Amazon and other dot-com stocks back in the late 1990's when CEO Jeff Bezos and the like started appearing on Time Magazine covers (adios, Google). Industry economists and many (though not all) media outlets tend to be backward looking and risk averse, entrenched in hidebound institutions geared to a kind of herd mentality or GroupThink. As a reporter, try getting a risqué out-of-the-box, conventional-wisdom-defying story past an editor worried about his rep and job security.
Few analysts have the guts to stick their necks out or the spare resources to be able to afford to do so (a big shout-out, by the way, to my homey, Euro Pacific Capital's Peter Schiff, who audaciously, consistently and elegantly warned us all this chasm was coming...and of course got routinely lambasted and ridiculed on Fox, CNBC and other outlets as the Village Idiot), so you should also look for the next conventional-wisdom-defying Oracle currently being widely lambasted and ridiculed.
Leading market indicators start becoming less red.
Fight Dow Syndrome: Stop focusing on the Dow Jones Industrial Index. It follows a mere clutch of sclerotic, government-subsidized (and, some, bailout-hugging) Fortune 500 albatrosses that are unlikely to lead the next expansion (binge). It's small, nimbler firms closer to the ground and mom's garage that'll likely be the quickest to hire (remember, small business are the source of at least 60% of America's employment and a healthy chunk of its innovation). Focus on lesser known stock indicators such as the Russell 2000 index of small cap stocks, which has historically sent out earlier, or at least louder, alerts ahead of and during previous turning points.
Look for less flight from risk and more risk-taking. Follow reports on risk spreads in the U.S. and global bond markets, such as the spread between yields on U.S. junk bonds or emerging market debt and Treasuries. These spreads are the premium investors and creditors are demanding for taking on risk. When those spreads shrink, that means frozen investors are starting to chill out and get frisky again. The London InterBank Offer Rates (or LIBOR, a measure of the willingness of big banks to trust and lend to each other) should come down, which they have since spiking weeks ago. Initial public offerings, as tracked by Renaissance Capital and venture capital activity as tracked by PricewaterhouseCoopers should start to perk up. Fewer new suicides and divorces in and around Sand Hill Road and Wall Street should pop up on Google keyword searches.
An article buried in business pages a couple weeks ago reported evidence risk aversion might be diminishing in Europe. As I type this, gleeful vulture funds are setting up shop and snapping up worse-than-junk corporate and mortgage debt, essentially taking stakes in foreclosing properties across California for a song. Look for merger activity and write-offs to pick up, signs excess capacity and the malinvestment of the past is being worked off. For signs of a turning point, look for markets to start positively reacting to news of layoffs instead of the negative way in which they're reacting now. Note that in the first few minutes of the opening bell, the market's reaction to the release of that abysmal U.S. jobs report earlier this month was positive. That's significant.
Look for the yield curve -- the graphical representation of the difference between short-term and long-term Treasury yields -- to steepen with expectations that demand for funding (the funding that fuels expansions) will pick up in the future (and interest rates with them) just as the curve flattened before the stock market reached its peak, as you can see in this very cool animated chart on Stockcharts.com. Look to the fed funds futures market, where speculators trade on what the Federal Reserve will do next (subtract all the prices you see from 100 to get the predicted fed funds rate for each coming month). It will show signs the Federal Reserve could start raising short-term rates in the months ahead, but be mindful that this could reflect expectations for either stronger growth, greater inflation or both.
If and when you start to see some of these and other lights flashing green (or less red), Whoppee! It's Party Time...or it will be soon (just a "wup").
Backward looking stats, which are not completely useless, start showing slowing slowdowns.
Economic stats aren't completely useless. There are forward looking ones which will are helpful in identifying a turning point, and you don't need an economist to decipher them.
Look at the housing market's inventory-sales ratio, or months of supply, of new homes and resold homes. They're read as the number of months it would take the current glut of unsold homes to be sold off at the current monthly sales rate (turning points in the business inventory-sales ratio can also be useful to an extent). Look for stabilization in the National Association of Home Builders builder confidence index. Check out the Federal Reserve's factory capacity utilization numbers (data, chart) -- you're looking to see if factories are working down excess capacity and heading back toward 100% use. Look at monthly durable goods (big-ticket equipment) orders figures and especially orders for non-defense capital equipment as an early gauge of business investment. The index is volatile, highly affected by Boeing's massive orders, but a bump on that front would, in itself, be a good sign, and you can use a multi-month average to smooth out its wackiness.
Even employment is useful, but not the monthly payroll figure you always hear about, and heard about earlier this month. At any given time, both hiring and firing go on in this churning economy. Look at not-as-closely-watched reports for a slowdown in firing (like job cut figures from Challenger, Gray & Christmas) and, separately, a pickup in hiring (like the Conference Board Help-Wanted Index).
The Conference Board's index of leading economic indicators is also useful (but not perfect or as early a warning signal). It's a composite of some of the signs mentioned above if you'd rather not track them all, because “House” is on Monday, "Scrubs” is on Tuesday and “Battlestar Galactica's” season premiere is on its way.
In the case of both forward looking market indicators and economic stats you also want to look for -- want to look geeky here -- "concavity" or “an inflection point where the second derivative goes from negative to positive.” In other words, you want to see the implosion go from accelerating to decelerating. You want to see the speed of decline....err, decline (that's not a typo), kind of like an airplane in a nosedive, where the pilot's tries to pull up, attempting a crash that will kill half of the passengers instead of all of them. At that point we'll have reached an inflection point even before reaching the rebound point.
Look for signs that office lease rates, house rents, real estate prices, office vacancy rates are also in the midst of such an inflection point. These barometers are not going to fall this fast forever.
Even normally, mostly useless consensus forecasts of the monthly econ stats can be made useful -- if you look at their margin of error. As an economy goes from boom to bust, the consensus starts grossly underestimating how bad the stats will get. Near or at the bottom, they start getting more accurate. And then they start underestimating again, but this time they underestimate how much better the monthly stats will be. Look for all that.
Anecdotes, hearsay and actions by those in the know start perking up.
I'm not talking about the Fortune 500 CEOs you'vesee on CNBC (please, many of them are clueless and insulated from reality by several Kafkaesque layers of yes-men or restricted by the PR department and fear of litigation from saying what they really think besides "it's all good" and "our industry's as bad as we are").
Try to get a sense from people on the front lines at mostly smaller firms. I'm talking about customer service people, purchasing managers, secretaries and waiters. Watch the waiters...oh, and real estate agents, too. When their grimaces start turning into crooked frowns, it's time to pounce (on the market, not your waiter). It may already be well past time.
CEOs aren't completely useless, but watch what they do -- watch what everyone does -- not what they say. Look at inside purchases of their own company stock using ThomsonReuters' fantastic Insider Trading Monitor. If net insider purchases start going up, that will be further (belated) confirmation a turnaround may already be upon us. Home builder executives started dumping company stock at record rates in 2002, at least two years before the housing market started to buckle.
I've started a blog (hasn't everybody?) called Track The Turnaround that will monitor these and other signs on a daily basis, so drop in and contribute your own forward-looking observations, won't you? Maybe we'll spot the turning point together before the herd does.
Now, before I go, I must mention the big fat caveat to all of this.
Governments: Ours and Others
Government plays a role (heaven help us). The odds this U.S. recession will extend beyond the average length rise dramatically if DC makes a mess of things. A 1997 survey by Robert Whaples of Wake Forest University finds a surprising 27% of historians and 49% of economists believe bad policy made the Great Depression deeper and longer.
Continued.......
01-16-2009, 12:59 PM
#2
With The Resistance
Thread Starter
Joined APC: Jan 2006
Position: Burning the Agitprop of the Apparat
Posts: 6,191
Good policy will hasten the economy's work-off of the glut and sharply lower the burden, cost and risk to new entrants starting in an industry, opening a business, expanding employment and investment (look for business-friendly economies like Ireland and Hong Kong to come out of this mess sooner than most).
Bad policy will make the recession longer. Bad policy makes the necessary hangover more protracted and sharply raises the burden, cost and risk of entering a new industry, opening a business and increasing employment and investment (check out Japan's 10-year slumber through the wilderness for guidance on what not to do).
America's prospects for a speedy (well, speedier, at least) recovery will be immeasurably improved if any federal stimulus plan focused more on reducing burdens on the private sector and accelerating the working off of excess and dysfunction faster (hint: bankruptcy is good for you) and stopping a deflationary downward spiral. If DC wants to help, the leadership needs to express its positive intentions loudly, clearly, firmly and consistently stated and backed up with firm action or, and some cases, firm inaction. Mr. President-Elect, take note, and if you don't, well, we're coming closer toward the end of your future term(s) too with each passing episode of "Lost" anyway.
Odds of a “GD: The Sequel” are low judging from historical averages and most politicians' desire to get re-elected. If this recession does set a new record, well - ouch - but that still means every passing episode of "Lost" brings us closer to the end. Even Japan eventually got out of its decade-long funk. No country (excluding some masochistic banana republics) willingly stews in misery forever (North Korea, even your time will come). Too many of us are epicureans.
Additionally, catastrophic shocks to the economy -- from a big war, sky-high oil prices or other assorted strife abroad -- wont help, to put it mildly. So use Google News Alerts and Intrade to track news and bets on flash points in the Middle East, the Caucuses, Kashmir and between J-Lo and Marc Anthony.
In any case, just as the time to invest in a ritzy condo in Buenos Aires's Recoleta district was when Argentina's economy was falling apart during the 2002 peso crisis, or the time to invest in Eastern Europe was as it suffered apoplectic seizures and disarray after the Berlin Wall fell in 1989, or to invest in Chile in the 1970's back when Salvador Allende and the Communists were on their way to victory before Pinochet and the Chilean (University of) Chicago Boys moved in and launched massive free market reforms that made Ronald Reagan and Margaret Thatcher blush, the time to look to invest or at least think about it is often when things look darkest.
None of this is to say the next up-cycle will be particularly vigorous. Folks, we're coming off a massive, 25-year-old orgy of debt and the hangover will be pronounced. And I don't mean to suggest that picking the inflection point is easy. It is treacherous. Many fund managers and economists have tried and failed. An apparent ground floor could turn out to be a trap door.
But do not underestimate the resilience and dynamism of the U.S. iEconomy. Make no mistake: A turning point is coming (or is already upon us). To paraphrase Matthew Broderick's Ferris Bueller, don't blink or you could miss it.
Better yet, “Don't Worry, Be Savvy” (tm) and learn to love the abyss
More at:http://tracktheturnaround.serenity21...the-abyss.html
Bad policy will make the recession longer. Bad policy makes the necessary hangover more protracted and sharply raises the burden, cost and risk of entering a new industry, opening a business and increasing employment and investment (check out Japan's 10-year slumber through the wilderness for guidance on what not to do).
America's prospects for a speedy (well, speedier, at least) recovery will be immeasurably improved if any federal stimulus plan focused more on reducing burdens on the private sector and accelerating the working off of excess and dysfunction faster (hint: bankruptcy is good for you) and stopping a deflationary downward spiral. If DC wants to help, the leadership needs to express its positive intentions loudly, clearly, firmly and consistently stated and backed up with firm action or, and some cases, firm inaction. Mr. President-Elect, take note, and if you don't, well, we're coming closer toward the end of your future term(s) too with each passing episode of "Lost" anyway.
Odds of a “GD: The Sequel” are low judging from historical averages and most politicians' desire to get re-elected. If this recession does set a new record, well - ouch - but that still means every passing episode of "Lost" brings us closer to the end. Even Japan eventually got out of its decade-long funk. No country (excluding some masochistic banana republics) willingly stews in misery forever (North Korea, even your time will come). Too many of us are epicureans.
Additionally, catastrophic shocks to the economy -- from a big war, sky-high oil prices or other assorted strife abroad -- wont help, to put it mildly. So use Google News Alerts and Intrade to track news and bets on flash points in the Middle East, the Caucuses, Kashmir and between J-Lo and Marc Anthony.
In any case, just as the time to invest in a ritzy condo in Buenos Aires's Recoleta district was when Argentina's economy was falling apart during the 2002 peso crisis, or the time to invest in Eastern Europe was as it suffered apoplectic seizures and disarray after the Berlin Wall fell in 1989, or to invest in Chile in the 1970's back when Salvador Allende and the Communists were on their way to victory before Pinochet and the Chilean (University of) Chicago Boys moved in and launched massive free market reforms that made Ronald Reagan and Margaret Thatcher blush, the time to look to invest or at least think about it is often when things look darkest.
None of this is to say the next up-cycle will be particularly vigorous. Folks, we're coming off a massive, 25-year-old orgy of debt and the hangover will be pronounced. And I don't mean to suggest that picking the inflection point is easy. It is treacherous. Many fund managers and economists have tried and failed. An apparent ground floor could turn out to be a trap door.
But do not underestimate the resilience and dynamism of the U.S. iEconomy. Make no mistake: A turning point is coming (or is already upon us). To paraphrase Matthew Broderick's Ferris Bueller, don't blink or you could miss it.
Better yet, “Don't Worry, Be Savvy” (tm) and learn to love the abyss
More at:http://tracktheturnaround.serenity21...the-abyss.html
Last edited by jungle; 01-16-2009 at 01:10 PM.
01-16-2009, 01:13 PM
#4
With The Resistance
Thread Starter
Joined APC: Jan 2006
Position: Burning the Agitprop of the Apparat
Posts: 6,191
Originally Posted by Kilgore Trout
So, uhhh, I don't have to stock up on .223, oatmeal, and Scotch?
General Jack D. Ripper: Mandrake, do you recall what Clemenceau once said about war?
Group Capt. Lionel Mandrake: No, I don't think I do, sir, no.
General Jack D. Ripper: He said war was too important to be left to the generals. When he said that, 50 years ago, he might have been right. But today, war is too important to be left to politicians. They have neither the time, the training, nor the inclination for strategic thought. I can no longer sit back and allow Communist infiltration, Communist indoctrination, Communist subversion and the international Communist conspiracy to sap and impurify all of our precious bodily fluids.
Maj. T.J. "King" Kong: Survival kit contents check. In them you'll find: one .45 caliber automatic; two boxes of ammunition; four days concentrated emergency rations; one drug issue containing: antibiotics, morphine, vitamin pills, pep pills, sleeping pills, tranquilizer pills; one miniature combination Russian phrase book and bible; one hundred dollars in rubles; one hundred dollars in gold; nine packs of chewing gum; one issue of prophylactics; three lipsticks; three pair a nylon stockings. Shoot, a fellah could have a pretty good weekend in Vegas with all that stuff.
Last edited by jungle; 01-16-2009 at 01:26 PM.
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