Are you sick of doom and Gloomers's peddling nonsense

nice article from a very conservative (non-conspiratory) and respected economic and investment advisor named John Mauldin.

www.marketoracle.co.uk...

two "gems" IMO from the article which helps people read between the two exteme's.......the "doomer's" forecast's and the "can only think postive about the economy fella who doesn't realize doing this costs them more losses"
the first one talks about the recent trend and a insightful graph regarding wether those cynical of gov't numbers (being politicized) holds any merit.......the graph shows that nearly all statistics are continually being revised downward over the past year...........and while he say's "it does make you wonder" (that is as far as i believe John would go....because nothing destroy's the "cred" of an economist with a wide breadth of readership.....then legitamizing a conspiracy or two....because as we all know....conspiracy's are extinct....and if you don't agree you are a loon).........but no matter what you think the reason is for continually revised economic numbers downward during the recession....one can take away valuable info.. from the following

Reading and watching all the analysts and economists who "see" recovery in one set of data or another makes me wonder what sort of faith-based economics they actually practice. Just as it requires faith to believe in God, it also requires a lot of faith to believe in forecasts made on a single month's set of data, or based on past performance

Are you interested in finding a real green shoot? Let's look for a quarter when the economic data keeps getting revised upward, two and three months out. That will signal a real recovery. As long as the data is being revised downward, the economy is "having issues," as my kids would say.

OK now the other BIGGER insight IMO is CRITICALY THINKING about the trendy...often parroted line........"Unemployment is a lagging indicator".......sounds right.........yes? THE CRITICAL THINKER can understand that AT least in the last several recessions ...unemployment has been a lagging indicator (and i would agree ) BUT is there any reason besides "doom and gloom" to think that this recession is FUNDAMENTALLY different in a WAY that would lead one to reasonably believe unemployment would be a different indicator?

john mauldin says

The typical pundit keeps telling us unemployment is a lagging indicator, and that the recovery will be well under way before it shows up in the job numbers. Therefore, you should buy what they are selling, because the recovery is on its way. But that may not be the case this time. One of my favorite reads, when I get to see it, is the economic analysis from Bridgewater. They are among the best thinkers anywhere, and everyone who follows them gives them a great deal of credence. This is what they wrote about unemployment being a lagging indicator last month:

the quote from the bridgewater analyst

"Normally, labor markets lag the economy because incremental spending transactions are financed via debt, stimulated by interest rate cuts. But as long as credit remains frozen, spending will require income, and income comes from jobs. And debt service payments are made out of income. Therefore, in a deleveraging environment job growth becomes an important leading, causal indicator of demand and other economic conditions.

key word being deleveraging enviornment and this is what we are in

"... The bounce in the economy and the stabilization in markets reflect government actions that are big enough to impact near-term growth rates, but are not sufficiently directed at the root problem of excessive indebtedness to produce permanent healing. The deterioration in employment markets will continue because companies' profit margins are so deeply damaged that a little bounce in growth won't do much to alter their need to cut costs. This deterioration in labor markets will undermine demand and continue to pressure loan losses, which will keep the pressure on the banks and elevate the cost of capital for tentative borrowers, inhibiting credit expansion."

so when does unhappy economic truth become "Doom and Gloom" ?

when a person that doesn't know how or doesn't want to handle the negative economic news decides that labeling nearly everyone saying something VERY unfavorable about the enviornement is "full of it".........and people have the luxury of thinking this way or not......

If you do (with a number of topics/ subjects) ....then you don't belong on a website trying to deny ignorance yet

p.s next time someone says "unemloyment is a lagging indicator" you can say sure it usually is "but not in deleveraging envirornements" in deleveraging enviornements it is actually a leading indicator of demand and other economic conditions" "by the way the last major deleveraging was 80 years ago (GDepression) ...then watch their jaw drop

i believe well informed is well prepared


[edit on 16-5-2009 by cpdaman]

any thoughts...........anyone alive? lol

evidence showing unemploylment is a LEADING indicator in a develeraging economy (most recession's it is leading) last recession brought by deleveraging occured in the great depression....bueller

Originally posted by cpdaman
Are you sick of doom and Gloomers's peddling nonsense

actually what I'm sick of are those people not taking world situations seriously - from the drunken-sailor spending of Obama to the Swine Flu pandemic.

Ok, first things first here. Maybe I'm an idiot but what does "deleveraging" mean? I'm not on the up and up on financial terms.

Originally posted by FlyersFan

Originally posted by cpdaman
Are you sick of doom and Gloomers's peddling nonsense

actually what I'm sick of are those people not taking world situations seriously - from the drunken-sailor spending of Obama to the Swine Flu pandemic.

flyer's fan did you read the thread?

reply to post by LiquidMirage


Deleveraging is the unwinding of debt. Companies use leveraging (i.e. borrowing) to accelerate their growth or return, however, but when a company is concerned about defaulting on its obligations or concerned about rampant losses, it can use deleveraging to lower its risk of default and mitigate its losses. By deleveraging its balance sheet, a company sells off debt to lower its overall risk profile. Deleveraging can have serious financial consequences when a company tries to unwind assets that are illiquid. In this case, deleveraging may mean selling assets at relatively steep discounts. As a result, deleveraging may lead to downward pressure on security and asset prices as more and more companies and/or individuals unwind their positions during the deleveraging process.

Originally posted by LiquidMirage
Ok, first things first here. Maybe I'm an idiot but what does "deleveraging" mean? I'm not on the up and up on financial terms.

definition from (just as mercenary posted)

www.investorglossary.com...

basically the financial system got levered up to the hilt.......in doing so a large part of the debt growth was thru something called securitization

this ties directly into the deleveraging

ca.finance.yahoo.com...

With securitization, individual mortgages are packaged into bundles and turned into a security that pays income and can be sold as a “bond-like” investment. The issuer gets value from the mortgages up front; the buyer gets the supposedly predictable payback of the mortgages

to keep the housing /securitization markets going .....mortgage lending decided to (expand the pool of avaiable borrowers) so they offer people who couldn't afford homes loans and LOTS of them..then

It all began to turn in the summer of 2007, when mortgage payments on all the securitized mortgages didn’t show up as expected. Highly leveraged hedge funds were unable to make margin calls. The banks stepped in to seize their assets. Then, when the banks found no one wanted to buy the assets, they got stuck holding tons of paper.

The toxic waste began to leak out of the basement. And some of the biggest houses on Wall Street began to crumble.

and that was only the beginning.....understand
when you are highly levered.....a small move in a value of an asset ..........will have either a huge reward or a huge risk.....when mortgage backed security's weren't worth what banks thought they were....and defaults increased (buyers of the MBS weren't collecting the income streams they hoped for) ......the credit markets began to freeze.....and people could not use their houses for atm's any more as house prices PLUNGED! so credit dryed up and house values plunged....followed by stocks and unemployment along with consumption

The job losses that mounted and lack of credit available started a vicious cycle of their own with falling consumer spending......fed by falling house values and stock markets/and avilability of credit......the house of debt was folding..........banks are and will still be reluctent to lend and now defaults on credit cards and corporation's are rising with the collapse in credit available for consumers to spend.....not to mention Commercial real estate is entering a depression

our service based consumption economy is very vulnerable to a lack of available credit as well as re-inforcing spirals of less credit plus falling home values= less speding = more unemployment

Also all the trillions that the fed has/is spending is to artificially support the CREDIT markets and try to REIMBURSE banks so they can get artificial PAR value for their Toxic (crappy over-valued debt) ...this money is not going into the REAL ECONOMY ....especially so long as Bernanke pays interest to banks for keeping excess reserves with the fed...(this is a incentive to hoard money)

THE last time we were in a period of deleveraging the USA fought deflation by DEVALuing the dollar against GOLD......possible hint for what the G20 country's may try and work on


The biggest point to take for the article is that in the deleveraging enviornment ...unemployment appears to be a LEADING indicator as opposed to what you will hear the pundits say



[edit on 16-5-2009 by cpdaman]

Eric Sprott says the same thing in this video (at the 15:00 mark).

Not only is it very possible that unemployment is a leading indicator during financial meltdowns (ie, depressions), but the second derivative (the acceleration of unemployment) is a leading indicator during every US recession that we have data on.

Soooo...yeah, the "unemployment is a lagging indicator and we shouldn't worry about it" assertion appears to be false.


[edit on 16-5-2009 by theWCH]

WCH

the next question is which is the stronger indicator "continous unemployment recipients"......or "new unemployment claims"

either way how do you grow an economy once the bottom is reached instead of just skate along the bottom.....when you have a corrupt self serving elite class making decisons than benefit themselves and a confused or oblivious or brainwashed populace that won't put pressure on the powerz

will devaluing the currency against gold be THAT beneficial (it will lessen debt)

but unless any benefit to the populace is even MORE beneficial to the POWERZ then it won't be enacted




[edit on 16-5-2009 by cpdaman]

Originally posted by cpdaman

the next question is which is the stronger indicator "continous unemployment recipients"......or "new unemployment claims"

I would argue that neither is stronger than the other - what's more important is the overall trend of revisions. Like your earlier post mentioned, are post-facto revisions upward or downward. Downward revisions in unemployment numbers are what we need to see consistently to call a bottom.

will devaluing the currency against gold be THAT beneficial (it will lessen debt)

I've often thought about what a return to gold-backing would mean. I still don't have a conclusion - theories abound however. I do know though, that everything would become much more expensive relative to today's levels because there would be a lot less currency flying around.

Perhaps I should have paid attention more in economics in school. I'll admit I was more interested in chasing girls then chasing the A in micro and macro economics. Now I'm paying the price...

reply to post by cpdaman


BRAVO!!

I love that article...

....and that's all I got to say about that...

I would have to agree with the job indicators. The Debt Bubble that expanded wealth since the 2001-2003 recession was financed almost entirely on debt. This in turn, because debt was so easy to obtain, lead to the housing boom, a biproduct of the government's lowering interest rates and banks (with their fancy and complex derivatives) leveraging their funds.

In the situation we see now, I consider a Deflationary Spiral.. and so long as we loose jobs, people will loose purchasing power. So long as purchasing power drops, the need for goods drops. Prices drop. More people become unemployed.

The whole notion that the MARKET is the leading indicator is complete crap when we look at the raw data.

Unemployment is still accelerating, reaching multi decade highs continually.. and this is even with the fact the government LIES about those numbers!

Though the stock market is up, and only -3% YTD as of yesterday .. Corporate PROFITS are still tumbling.. this indicates demand is still way bellow healthy market levels and thus will result in further layoffs..

The only source of inflation that we are seeing (and for some reason the media talk like it's a GOOD thing?) is oil, food and energy. This is mainly due to a sliding Dollar as supplies are backed up and demand is down.... But in all actually as the CPI goes up and wage growth goes down.. it's actually not inflation, it's deflation.

The markets are to manipulated to be an indicator of anything, following the raw data of corporate profits, CPI growth, wage declines and unemployment .. I would say, not to be a doom and gloomer, but we are far, far, far from the "bottom" of this recession.

Today is a PERFECT example of the market out of touch with reality. Housing starts fall to record low pace (no one's buying, building or getting loans) and the Market is GREEN. "Because of Commodities".

If you don't believe the government is lying to you, doing all in their power to divert your attention (which American's being as ignorant as they are do this very well) just go back BEFORE the crash and listen to Paulson and Bush telling you everything is just peachy, economy is fine, markets are fine, no need to panic.

Right up to the day before the crash.

To the OP-my answer-yes.

Sorry, thought this was a yes or no question.

Global Meltdown » Are you sick of doom and Gloomers's peddling nonsense »


Are you afraid of reality?





[edit on 19-5-2009 by HulaAnglers]

From the ignorant responses I will assume maybe 1 or 2 people actually read the entire OP.

Then again, it kind of correlates into what the OP was trying to tell us I suppose...

Ya ya - Rockpuck-I tried to read through this utterly boring nonsense, I truly hope that the economy collapses along with all the hypocrisies and hypocrites. Peace

[edit on 19-5-2009 by HulaAnglers]

reply to post by cpdaman


It's not Gloom and Doom, it's called reality. You see we're not talking about one isolated aspect of our World that needs radification, but rather a pleothora of calamaties that seem to all be converging at once. The financial crisis is just one piece to the puzzle. Wake up, and I'm not saying just you specficically, I'm saying it to everyone who still has their head in the sand with their Uranuses sticking up in the air.

You know what makes me sick, is the fact that whether your surfing the am dial for world/financial news or trying to get new information on MSM TV, that it is literally impossible to get truthful information on the many issues today. Instead I'm bombarded with BS like the Peterson trial (Larry King is a joke), or disinformative gallup polls like this one "Are you thriving or struggling" and then they say 60% are thriving, so then it's, "Nothing to see here folks, you see everything is peachy". Give me an E'ffen break...Do you know anyone "Thriving"? I sure as hell don't. What an insult to my intelligence.

I apologize for ranting, but it's threads like this that really make my blood boil. As if it's people's goals to spread fear mongering, com'on now, we're not talking about Planet X here, we're talking about the 70 trillion in debt, we're talking about the millions who are unemployed with no light in sight, we're talking about the many thousands of jobs that will be no more. I'm a defense contractor and let me tell you, up until now, I always thought my industry was recession proof. I mean with neocons controlling the world, war is a booming business, but now we're even starting to feel the crunch. Perception is reality, and guess what our worst fears are manifesting in front of our very eyes.

You want doom and gloom, I'll give you doom and gloom, guess what, this is just the appetizer. You have no idea what is about to go down. Clueless millions who prioritize their life around American Idol and stay hypnotized in front of their boob tube as our very world crumbles around us. It's all fun n games, wait until food and water supplies dry up, then you'll see rioting, wait till marshall law unfolds and you're forced to stick a vaccinated needle into your arm against your will. Wait till, Iran is left to be nothing but a cloud of dust from a nuclear attack and then the millions upon millions who will be effected by nuclear fall out.

Here's are the dinner entrees that you will soon be choosing from:

1. Pandemic Virus
2. Economic collapse
3. Marshall Law
4. Nuclear War
5. Codex Allimenterus
6. Starvation
7. Severe climate and Earth changes
8. NWO

reply to post by OnTheFelt


WOW ....

You didn't read the thread either?!?

This is an astounding experiment!

reply to post by Rockpuck


My apologies to the OP, as I did not read the last paragraph...However, in my defense (I know I know) the thread title is a bit misleading.