Another Dr. Doom: Peter Schiff 32 comments
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Many thanks to a comment from Pej. It turns out we have a fifth Dr. Doom. Peter Schiff.
His extremely bearish views on the U.S. Dollar, the United States stock market, bond market and the United States economy have earned him the nickname "Dr. Doom." [3]...
In an August 2006 interview Schiff generated much controversy when he repeated his long-held investment thesis: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship ...I see a real financial crisis coming for the United States." On May 16, 2006 in debate on Fox News, Schiff accurately forecast that the U.S. housing market was a bubble that would soon burst.[7] On December 13, 2007 in a Bloomberg interview on the show Open Exchange, Schiff further added that he felt that the crisis would extend to the credit card lending industry.
Thus Peter Schiff appears to have indeed laid claim to the alias Dr. Doom, in addition to Nouriel Roubini, Marc Faber, Stephen Roach, and Henry Kaufman. From a preliminary read of his views, his gloom and doom seems to have been de rigeur, in terms of a housing bust and excessive consumer credit. I feel a lot of people sort of acknowledged that US housing prices were quite high and that growth in consumer debt would have its limit. Twin deficits was another bandied-about problem on the radar. But the real suprise was when US housing weakness caused damage in all sorts of seemingly random, far flung places, knocking unexpected companies into insolvency and freezing up credit markets as the entire financial system, globally, lost confidence in itself. Who thought that major US financial giants would be blown to bits within months by the eventual fall in housing? Anyhow, we now have five known Dr. Dooms.
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This article has 32 comments:
Positive spin has been prevalent in the mainstream media. Sometimes it has been unfounded, sometimes effectively deceptive. I know many people who were hurt by it during the dot com bubble. One young woman even sold her house to buy dot com nonsense based on adulation for the guru of the era who was on TV several times per week advising her faithful followers to buy Dr Koop dot com and suchlike.
Thus, people like Peter Schiff, as well as the other very experienced individuals you listed, are needed as a counterbalance, and the mainstream media should give them adequate air time if they wish to preserve their credibility.
www.marvel.com/univers...)
All the others (Schiff, Roubini, et. al.) are just cartoon figures.
The problem is the market is acting like lemmings. The government is negligent. The SEC is incompetent and ineffective in its mandate to protect the integrity of the markets...
If I could move it would be to Montana with gun and ammo.
Indeed America has spent more than most other countries combined. Rah Rah Rah! Indeed, America has bankrupted itself and brought the planet to its knees with its foolishness. You consume allot. Wow! There is something to be proud of! Damn skippy!
As far as finding a better place.....my grandfather used to say you can lead a horse to water but you can't make him drink. Indeed, your smug American exceptionalism blinded you to what everyone that isn't American readily sees. Sad, so sad.
On Jan 08 09:31 AM User 55065 wrote:
> Well Dr Bosun, you need data..rah rah..! Ever looked into why the
> US has the highest per capita consumption of energy, consumer goods,
> transportation, ...because US consumer can afford it--and afford
> it easier than any other country. Ever wonder why US has the highest
> per acre food production in the world, why US companies develop
> most new pharmaceuticals, why does every goods maker target US as
> the main market to sell into? You really need data..I thought you
> were knowledgable enough to know such simple facts. Yes, I may be
> somewhat biased in favor of the US, but only because I have not found
> a better place to live, at least so far. Any suggestions?? I am
> not ready to move to China or India or even France or Sweden--last
> time I visited them, US was still a better place to be.
At this point I'm having a hard time finding reasons to bet against him.
It seems Americans get their international geography and knowledge only when they start a war.
Look outside your own country as "the fish doesn't know it is swimming in water."
The Norman Rockwell 1950s are over. Stop with the knee-jerk jingoism.
-----
On Jan 08 09:31 AM User 55065 wrote:
> Well Dr Bosun, you need data..rah rah..! Ever looked into why the
> US has the highest per capita consumption of energy, consumer goods,
> transportation, ...because US consumer can afford it--and afford
> it easier than any other country. Ever wonder why US has the highest
> per acre food production in the world, why US companies develop
> most new pharmaceuticals, why does every goods maker target US as
> the main market to sell into? You really need data..I thought you
> were knowledgable enough to know such simple facts. Yes, I may be
> somewhat biased in favor of the US, but only because I have not found
> a better place to live, at least so far. Any suggestions?? I am
> not ready to move to China or India or even France or Sweden--last
> time I visited them, US was still a better place to be.
"Schiff is the author of two books Crash Proof and The Little Book of Bull Moves in Bear Markets.
On October 28 2008, Schiff stated in an interview on Bloomberg TVthat the investment strategies outlined in both books currently "are not working" due to the collapse of foreign currencies, foreign stocks and the failure of gold prices to go up significantly as most of the world entered an economic recession and foreign investors flee to cash."
...in other words you lost your ass if you took the advice from his books but NOW he knows what he's talking about...yeah, right!...snake oil by any other name is still just snake oil.
At least he wasn't a shorter like Treasury Secretary Paulson. Now that guy, he may be a real Dr. Doom. After all Dr. Doom actually destroyed things (like honesty, government accountability, and market fairness and equity), not just published depressing papers.
Were they right?
You can find clips of Peter Schiff on youtube and watch them yourselves. In the one I saw recorded in the summer of 2008, Ben Stein was on the verge of hysteria adamantly insisting that Schiff was so far off base that he must be crazy. Stein then insisted, repeatedly, that the market was "giving away" financial stocks for a song at the current prices which were about 25% below their peaks. Schiff contended that the financials were technically bankrupt and would only get worse.
As the passage of time has shown, Schiff was right, again and again. Financial stocks tanked, some going under, others wound up down 90%. Ben Stein must be buying with both hands, if he's got any money left.
It's not uncommon to seek scapegoats in some form or fashion, as we can see the political class try to blame any number of innocent parties (short traders, hedge funds, etc. etc.) for the economic crisis.
Applying labels such as "Dr. Doom" is a mild form of scapegoating. Giving naysayers derogative labels when your strongly held view of something is shown to be very wrong doesn't change the fact that what the naysayer says is correct.
You can call that list of financial commentators anything you want. It won't stop me from reading what they have to say and weighing it in my analysis of the markets. Whether they predict Gloom or Boom, right is right, and you can make more money in the markets by being right than you can by always being optomistic.
On Jan 08 09:48 AM Glen L. wrote:
> By far the best and most accurate of the Dr. Doom types is Gary North.
> He correctly called the bursting of the dot.com within a month, the
> credit bubble within a month, and the peak gold price within a DAY.
> He's not exactly calling a Great Depression II at this point, but
> he does say the Fed has steered us to a place between the rocks (stagflation
> as far as the eye can see) and the whirlpool (hyperinflation) and
> will have extreme difficulty avoiding both. He doesn't think stocks
> or real estate prices have bottomed yet, and he advises his subscribers
> to have survival strategies in the still-unlikely (albeit growing
> more likely) scenario of an economic collapse.
>
> At this point I'm having a hard time finding reasons to bet against
> him.
Each time any of the Doom Clones offers an "incorrect forecast," their reliability goes down. Doesn't matter if they turned out to be right two years later, but it does fit with market theory: it ain't enough to be right, but you gotta be right at the right time.
it was the pollyannas wot nearly got us bust...
nouriel et al...take a bow...
so now we have a doomy Fantastic Five...flame on...
Reminds me of Ron Paul. The only politician running for President that predicted the economic crisis would happen. He was also 'pounded down hard' within his own party for 'standing out'.
It's an interesting human trait, the urge to run in packs. Those that don't are generally ostracized, even if events eventually prove them correct. Fortunately there are a few who risk the penalties and wind up making advances or discoveries which make the world a better place for the remaining scoffers.
One only has to read a handful of the comment streams regarding a return to the gold standard to see the effect in realtime. How quickly the label 'goldbug' gets applied to those who only wish to see a stable monetary system and think that gold is one of the better ways to get there. Often such reactions are impervious to reason or logic. It's sort of amusing to watch.
The majority of pro gold standard arguments here at SA are based on a few major themes;
1. Fiat currencies have never succeeded despite the obvious historical evidence that hard currencies aren't used in any first world nation.
2. Gold has inherent value based on the fact that historically it is where capital flocks to in times of crisis.
3. Anyone that disagrees with the gold standard is part of the herd that is obviously wrong, because they disagree with the gold standard or gold as one of the best investments one can make. Never mind that believing in gold as above is it's own form of herd mentality, and is just as susceptible to mania and bubble speculation as any other asset class. The whole trope of "Gold has produced returns every year since 2002" is meaningless without the context of what returns you could have with the same capital.
Listening today to Obama it was very clear the USA is going writing a lot of IOU 's
On Jan 08 08:50 AM prudentinvestor wrote:
> Sometimes I think Schiff is too negative, but much of what he says
> is sensible and has been generally correct.
>
> Positive spin has been prevalent in the mainstream media. Sometimes
> it has been unfounded, sometimes effectively deceptive. I know many
> people who were hurt by it during the dot com bubble. One young woman
> even sold her house to buy dot com nonsense based on adulation for
> the guru of the era who was on TV several times per week advising
> her faithful followers to buy Dr Koop dot com and suchlike.
>
> Thus, people like Peter Schiff, as well as the other very experienced
> individuals you listed, are needed as a counterbalance, and the mainstream
> media should give them adequate air time if they wish to preserve
> their credibility.
It is indeed interesting and at the heart of contrarian investing. Packs and labels develop from our human trait of over-simplifying almost everything, most especially those ideals or individuals who go against the pack. Ron Paul is a perfect example...
Who in mid 2006 couldn't tell a real estate bust was coming? San Diego had theirs 9 months earlier. SW Florida had already gone down the toilet.
They were all talking about the subprime time bomb in 2005
Duh!
In Mr. Schiff's latest OpEd he stated, "Wouldn’t we be in better shape if instead of buying more stuff we concentrated on producing it?"
My question is, "How can we go back to being producers when our laborers can not compete against foreign labor rates, working conditions, environmental standards, and health benefits."
I have read and agree with much that Mr. Schiff has to say, but I have not seen an elaboration on this point in any of his columns.