When will the unemployment rate hit 10%?

No kidding, but your sampling is still myopic. Look at other barometers like the Baltic Dry or other major gauges of global commerce and transport. I wasn't referencing you Flagpole in relation to anemic growth in the US. That was for another poster. Believe it or not, it's not always about you.

I am not an eternal doom and gloomer. Just how is it that you think I crafted a situation where I can blog and consult and trade anyway? We should discontinue our conversation. You talk about how you couldn't care less about the short-term, but then go and quote anecdotal global manufacuring "leading indicators" that are probably more concurrent than anything else.

I want to see how the next several years of the secular bear plays out in the US. We are paving the way for the next dislocation, even if we have some years of growth in the interim before the Fed has to pull all of its fingers out of the dyke, and I seriously doubt the government will be able to fully extricate itself from commerce. That's not how the hydra works. We are in a brave new world.

We were in a Brave New World (my apologies to Aldous Huxley) in 1978, 1982, 1987, 1991, 2002, 2007, 2008 and now. People (you included) are too self-important, believing that their plight, their time in history, is the worst ever or a defining moment in time with historical significance. The vast majority of the time it's BS.

Regarding my talking of leading indicators, it is just evidence of what is to come in the short term, and I find it interesting, but it doesn't affect my investing strategy one bit, because as I still have a mortgage, I'm still in no position to invest for the short term (my view is that short-term investors should be completely debt free including the house). Once my house is paid off in about another 6 years, I may invest in some individual stocks; never fewer than 5 at a time, all spread out with no more than 20% in any one sector. But for now, watching leading and lagging indicators just gives me an indication of where we're headed.

Flagpole wrote:

The vast majority of the time it's BS.

Key sentence QFE.

Sagarin wrote:The same point of celebrating a Dow at 10,000. It's premature either way. Start at page 1 of this thread. We have a LONG ways to go to work through this deleveraging, despite a few quarters of growth from demand being pulled forward by governemnt stimulus programs aimed at increased auto and housing demand and an unrestrained Fed that is unable to increase the velocity of money despite its penchant to print. There will be yet another price to pay, and it will be severe. THAT is the point.

http://hussman.net/wmc/wmc091011.htm

Sagarin, seriously, you need to stop putting the pessimism filter on your blogreader. Are you familiar with the concept of "confirmation bias?" Deleveraging and loose monetary policy are not problems that exacerbate one another. They pull in opposite directions and may very well help us reach equilibrium. One can stall the economy, the other is stimulative. One tends to be deflationary, the other inflationary. One tightens credit, the other loosens. But somehow you see every current economic condition as worsening our prospects, in spite of all evidence to the contrary.

Certainly, this will be a bumpy recovery, with more help needed to stabilize housing, for instance. But I stand with the vast majority of economists who believe that the worst is behind us now.

Flagpole, if you can't see how 2008-09 is different than '78, '82, '87, 91, '02, etc.....then you are lot more ignorant than I had been giving you credit for.

Ok guys, thanks for the Econ 101 lessons. Go revisit quantitative easing and previous deflationary episodes, in different countries including the US, and deleveraging across major asset classes. There is NO evidence to the contrary, current artificial bump notwithstanding.

What would help us reach "equilibrium" is letting asset prices deflate to where they otherwise should and would be and restructuring debt to normalize balance sheets. There is no intention in current policy to reach "equilibrium" or a natural state of things. Deleveraging is necessary, and THAT is precisely the point, but it's not politically palatable. We will be worse off in ten years than we otherwise would've been. Enjoy.

AW Fan wrote:

Flagpole, if you can't see how 2008-09 is different than '78, '82, '87, 91, '02, etc.....then you are lot more ignorant than I had been giving you credit for.

I didn't say it wasn't different, but the same level of doom and gloom is there that was there then. It is the nature of people to assume that the CURRENT crisis (WHENEVER CURRENT is) is what will sink us all...has to do with ego and hoping to matter in the universe. This crisis will pass as did all the others...just will take a little longer and leave a bigger scar than most (one that will completely heal though).

There WILL be a time for anyone age 45 and younger (assuming they don't retire SUPER early) when the job market records record low percentages. All those Baby Boomers will be retiring at some point, whether they want to or not...too frail or dead to continue. Will be a nice time for people in the workplace then.

If I thought all was going to be the same as before, I'd set my spreadsheet to predict ONLY 11+% annual return each and every year until I retire, and then adjust slightly down from that after retirement. As it is, I have 1% all the way to 12% mapped just to see the worst and best possible scenarios. I've long said 7-9% is a more likely range over the next 20-30 years than the nearly 12% annual return prior to 2008.

This time it has already been worse than most recessions and downturns as it started in the fall of 2007 and technically isn't over yet (though it really is).

Sagarin wrote:What would help us reach "equilibrium" is letting asset prices deflate to where they otherwise should and would be and restructuring debt to normalize balance sheets.

A great many asset prices have deflated and will continue to deflate. Nobody in their right mind thinks we should let it happen in an uncontrolled fashion. Your boy tried that and the result is the 10% unemployment rate that's got you all worked up now. Letting housing prices crash will benefit no one but the market shorts who have had their asses handed to them over the past six months -- as they ignored the prodigious evidence of world economic recovery.

Sagarin wrote:Deleveraging is necessary, and THAT is precisely the point, but it's not politically palatable. We will be worse off in ten years than we otherwise would've been. Enjoy.

Whether it's necessary or not is obviously a calculation that individual firms make based on risk, so it's more necessary if things will be allowed to spin out of control by narrow-minded libertarians. Furthermore, it can be accomplished by freezing credit or by increasing cash flow. The latter approach, we learned since the Great Depression, is the one that leaves us better off in ten years.

I'm curious, Sagarin, what are you doing with your money to prepare for the apocalypse?

Nice of you to jump in now Webby, having ignored all previous discourse over the course of a couple years. First of all, I have not and am not predicting the apocalpyse. For you and Flagpole to paint me with that brush is ridiculous. Deleveraging is not the apocalypse, and neither is deflation. Deflation is a good thing.

Secondly, who's my boy again?

Thirdly, remind me again what it is we learned from the Great Depression, because we applied the same policy distortion back then, albeit more slowly and in less grandiose fashion? Have you noticed cash flow or the velocity of money increasing lately, despite the all out nature of the monetization scheme? You do know anbout shadow inventory and the balance sheet abyss, right? You do know about the SPEs not being officially accounted for correct? The war and the destruction of the world's global productive capacity ultimately ended the recession.

Fourthly, I've made it pretty clear over and over that I've been going primarily to GS with this rally, albeit with some shorts here and there, in my trading portfolio. Have I lost money? Of course. I changed my stance in July, but not my overall orientation. Am I profitable on the year? How could you not be? Meanwhile, I'm selling my long-term portfolio, with the expectation that we will likely push higher still through the end of the year if retail piles on, current pullback notwithstanding, and I will probably unload more if the trampoline bounce based on the government's profligacy gets ridiculous enough, but that may wait until 2010.

Meanwhile, I'll be waiting feverishly for your 3% sustained growth forecast, excluding a few quarter anomaly.

Sagarin wrote:Nice of you to jump in now Webby, having ignored all previous discourse over the course of a couple years.

On the contrary, I have posted dozens of times over the past few years on the subject of the economy. I criticized war spending and tax policy. I warned of the housing bubble, of reckless lending and shady accounting at banks and mortgage lenders. I urged people to hedge and predicted that the Dow would drop below 10,000 in January of 2008, when it stood above 12,000.

In other words, I was interested in the greatest dangers when they LOOMED, rather than when they had substantially passed and you became so interested.

Nice try. Seems as though we both shot the warning flare circa January of '08 when I moved to the sideline, but I had posted about the coming deflation and told people to get familiar with pushing on a string well before that (and a link to Japan's experiment with QE that continues today). So, it would seem then that we've simply parted ways from there, that you think we're done, pretty much and that it's not a bull bounce within a secular bear. Certainly, that's what sustainable, organic 3% growth suggests. I'm just curious how you justify that conclusion.

Sagarin wrote:

Flagpole wrote:

The vast majority of the time it's BS.

Key sentence QFE.

As far as I'm concerned the hype (not from you necessarily) back in March about how stocks were going to be worth NOTHING or very close to nothing and how the US would turn into Mad Max...well, that's already proven to be BS...at least in so far as the current crisis. So, I consider the tone of 2008 (with some company collapses on Wall Street) to be different from March 2009 (when the world was supposedly going to end) to now (more value back in portfolios yet some still predicting doom and gloom). You just said you aren't predicting the apocalypse, and that's really the first time I've seen you say such a thing (maybe you have, but believe it or not I don't read everything here). That is a good stance you have there, and the correct one, because the apocalypse is not coming...not with regard to the economy anyway. Within 10 years we will have a period of historically low unemployment and huge opportunity for younger workers. I can only imagine that this will help the stock market, but that's no guarantee; will still be lots of older people taking money out. With jobs a plenty (and they will be) people will likely freely spend again. Hopefully those doing the spending will listen to the older people who made mistakes before them...I'm betting most of it will fall on deaf ears.

Flagpole wrote:

You just said you aren't predicting the apocalypse, and that's really the first time I've seen you say such a thing (maybe you have, but believe it or not I don't read everything here).

Total BS. Go do a search on the Brojos crappy search engine, and any number of exchanges between us have you acknowledging that, while I have and continue to say that we are not even close to being done with deleveraging and that we are in a new normal that could see the market retrace all the way back to the low IN TIME (I'm not saying it has to happen as the financials already vomited en masse, but something has me uneasy about the way in which we put the "bottom" in back in March), that we won't be stuck in quicksand forever (but it will feel like it). I do think the US is handing off the baton as the world's great empire and reserve currecny though, yes indeed, as I've mentioned. Is that your definition of apocalypse?

What I am saying is that I think we are not fundamentally addressing our chief problems and structurally paving the way for a solid foundation to stem the jobloss recovery. Every subsequent recovery coming out of the last three recessions has brought with it less and less job creation. I believe the jobless rate will climb higher and stay elevated far longer than you imagine (and those economists you quoted who were capping it below 8%). I believe we will stagnate for years. I've said that over and over. Is that the apocalypse?

As I said, we will all revisit this in time. I went back and read through some threads from late 2007. I was amused that you were telling everyone that a 300 pt down day (and this was @ Dow 13,000) was no big deal, and a good entry point. Then you have the nerve to come on here and start a Dow 10,000 thread, which makes me more certain that ever this is a bear market bounce and nothing more. Doesn't mean it can't extend. We've seen more ridulous bounces than this one, just not with the same trajectory.

I think that Sagarin's views are closest to reality.

1) Not BS. This is the first time I've ever heard you say you're not predicting the apocalypse.

2) I'm not cheering a Dow 10,000 for the millionth time. It just DID hit that level when I was told it would take 20 years...it didn't. I just told the dude that it didn't take 20 years...not even freakin' close.

3) Any time to get in the market is a good time...that's what long-term investors believe and live. Can't do a hindsight view brother. Be in. Stay in. Continue to put money in. Eliminate debt. Pay off the house and then if you're so inclined, do some short-term investing.

Anyway, I'm not calling for untethered growth. I even said that after we topped 10,000 that we would dip down below 10,000 again; maybe even 9,000 or HOPEFULLY lower even. I'd love to have another period of great acquisition.

We'll just have to wait and see on the jobs front. If we're at 12% or more by the beginning of 2013, I'd be surprised. We can revisit then and see.

Ok, I'm done with this. Here's a few quotes culled from an August thread by YOU and another poster blatantly contradicting what you just said. There are MANY others. You're FULL OF IT, as usual. I will throw Webby a bone here, because, despite searching around on some threads last night, this is the first one where I see his posts anywhere. However, he's not a "seer," only in a short-term sense perhaps.

Thanks Sagarin RE: Not Another Stock Market Thread 8/26/2009 8:02AM - in reply to Flagpole Reply | Return to Index | Report Post

Come on, Flagpole. You say you read Sagarin's posts and articles, but I don't think you actually internalize any of it. Every time you post in response to Sagarin, you simply call him a "doom and gloomer" and dismiss what he says. And you continually make the "then you shouldn't be in the market" comment. But again, it's like you don't even read what Sagarin says. He never says that people shouldn't be in the market at all. He doesn't say that our world as we know it is about to come crashing down. Sagarin simply likes to provide the other side of things so that people can see the whole picture. You say you pay attention to the good news and the bad, but I think you really only believe the good. Sagarin's advice is to see and understand the whole picture and make moves based upon that. He does not tell people to just stay out of the market because it's too dangerous. I think he wants people to be actual educated investors rather than suckers who just blindly throw money at the market. There are always money-making moves to be made in the market. But ignoring the true health of the market is just stupid. Sagarin is telling people to look a little closer because things may not be as rosy as they seem. That is all. And he is right.

Flagpole RE: Not Another Stock Market Thread 8/26/2009 11:18AM - in reply to the Bluepill aint viagra Reply | Return to Index | Report Post

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the Bluepill aint viagra wrote:

Well, even I don't think Sagarin is a permabear. I do think though that there are lots of them out there. Actually I KNOW there are.

Big Picture wrote:

I think that Sagarin's views are closest to reality.

You mean views that aren't concrete? Just that he supposedly continues to invest yet says, "but this other bad stuff could happen". You mean THOSE views? Um. Ok.

To be fair though, he has said he thinks unemployment will stay high and stagnant for "longer than you do" meaning longer than me. That's about as concrete as Sagarin gets. We'll see. We get to 2013 and unemployment is still at or above 12% then I say he was right. I say it will be lower than that then.

I've been plenty concrete. How you invest your money is your business. How others invest their's is their's alone.

Do I need to go post the thread from 2007 where you were predicting the jobless rate would be coming down by 2008-2009? Do I need to repost the thread where you quoted economists as saying the unemployment rate should only reach 7.6%? Otherwise, why would you even bother quoting them if it wasn't YOUR expectation to a large degree. Oh wait, you change your opinion with new information. That's right. Hindsight is always 20-20 for you.

Me saying you aren't a permabear doesn't mean that I've before heard you say the apocalypse isn't upon us. Now, today, I've heard you say the apocalypse isn't upon us. First time for everything, and you are right in this case.