Roubini the Revisionist 38 comments
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"A more sober analysis suggests we're closer to the bottom; there is light at the end of the tunnel, but it's going to take a while longer, and..."
-Nouriel Roubini
And…After flying around in helicopters and feeding the manic media with his Doctor Depressionista interviews for the past 3 months, the man, the myth, the legend has revealed himself Wednesday morning – Tah-Dah, it's Roubini The Revisionist!
Not unlike most “economists”, Roubini is susceptible to gravity. The gravity of marked-to-market prices that is. Prices don’t lie; people do. “And…” a +34.6% move in the US stock market since March 9th will apparently “sober” up one’s views. Well done Nouriel. You can now go back to being just another economist who made a big call.
“Making the call” is what we all get paid to do in this business. Sometimes we’re right, sometimes we’re wrong. Being really right can make you eight to nine figures, and being wrong, well… depending on who you work for… sometimes has no downside at all.
One of my passions in life is calling people out. Call it aggressive, or call it plain dumb – I am a hockey player by training don’t forget, and that’s just what I do. Whether it's holding Hank The Market Tank Paulson or Roubini The Revisionist accountable, it’s all one and the same. Someone may as well do it.
Revisionist historians have populated Wall Street for over a hundred years. Once we get through month’s end, you can expect to see plenty of their writings from the hallowed halls of the once vaunted sell side “strategist” who is now parroting the 6 month old REFLATION call, to the buy side. This is what makes this game so entertaining to observe.
Right on schedule, after the US stock market put in another lower-high Wednesday, you’re seeing 74% of America’s finest revisionists presciently predict that the US recession could end by Q3 (as in 6 weeks from now). How wonderfully late this reactive prediction is from the National Association of Business Economics. I’ll spare the revisionist participants the embarrassment of reminding you what their “forecast” was in February (hint: it was closer to Roubini’s).
“A more sober analysis” suggests that the prior analysis involved what? A few cocktails? God knows what Roubini does when no one is looking, but assuming he is as careful with his words as one should expect a soothsayer to be, I’ll take his word for it.
The New Reality is simply that very few analysts, strategists, or economists called the top of the 2007 US market move as well as the bottom of the 2009 one. Is that a surprise? Hardly. But Washington and Wall Street should be learning a very important lesson from this – reactive analysis provides performance paralysis.
If our Almighty Ones are now admitting to sipping from the ole Sapporo without a proactive plan to address what Breaking The Buck could equate to, how in God’s good name should we entrust our children’s futures with their latest predictions? At what point in the last 18 months would you have been well positioned if aligned with the consensus of 74% of “economists”?
An understanding of the difference between a US currency breaking down versus one that’s on a crash course for a crisis would seemingly require one to have understood the REFLATION call from its inception.
As CNBC rolls out the revisionists, I think we are going to roll right into lower-highs. If the US stock market finds a way to break out to higher-highs in the face of a pending currency crisis, I’ll be the first to admit that I had the latest leg of my 2009 market call wrong. As prices change, I will.
Here are some immediate-term domestic price levels to focus on:
1. SP500 levels of 934 (January 6th) and 929 (May 8th)
2. Nasdaq 1764 (May 4th)
3. Russell 2000 levels 507 (January 6th) and 511 (May 8th)
I know, we’re very close to some of these lines. But I’m also sober… and I have a process that is my own – ah the weaponry.
To be clear, I am not making a call that China or Gold won’t make higher YTD highs. As our British philosophy Captain of the Revisionist League likes to say, I am “long of” both those asset classes “whilst” having very high conviction in them.
While everyone is getting jazzed up with our REFLATION call or the MEGA Consumer Squeeze call this morning, just take a deep breath, and take a good hard long look in that rear view mirror. These bullish calls aren’t new.
All the while, remember that Roubini The Revisionist is now sitting beside you in the passenger seat – and he’s not alone. This morning’s weekly sentiment survey has Bulls shooting up to 41% (from the mid 20’s in March) and Bears dropping like flies down to 28% (from the high 40’s in March). Sentiment in this market is finally bullish enough for me to get out of the way on the long side. As I start to wander on over to the ole Bear camp again, I wonder if anyone is still left standing? The booze is definitely gone!
My immediate term upside target for the SP500 is 918, and I have downside support at 896. Trade the range.
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On May 28 09:58 AM robertsgt40 wrote:
> What we are seeing now in the market is the "dead cat bounce". Even
> a dead cat will rise for a while. We have not yet seen the worst
> of the markets. For starters they are being manipulated. How can
> you lay off 600k workers a month and have a stock market rise? You
> can if you steal the taxpayer's credit and give it to the banksters
> and others on wall street. For a short time their capital will jump...at
> our exoense. Until the "Federal Reserve" is abolished and those
> that defrauded the nation are brought to justice, nothing will change.
> The nation is bankrupt. We go even deeper into debt by borrowing
> more from future generations. How ya going to pay this back? Our
> manufacturing base continues to be gutted. There are no meaningful
> jobs. (shovel ready is not a job). Just remember, none of this
> happened by accident. You can take that to the BANK
what f* coward man.
why people still give media for this idiot ?!
Roubini- he was right, likely continues to be right. The economy and the market is not healing anytime soon - notwithstanding the massive stimulus and the big rally. Consumer deleveraging will kill all recovery, hopefully the US consumer and US stock investor would have learnt their lesson.
Here is the latest from Roubini on Forbes today: Ten Risks To Global Growth
"...true de-leveraging by households, corporate firms and financial institutions has not even started, as private losses and debts are being socialized and put on the balance sheet of governments..."
www.forbes.com/2009/05...
On May 28 12:28 PM Fighting Yoda wrote:
> "My immediate term upside target for the SP500 is 918, and I have
> downside support at 896" - that is a very tight trading range for
> a highly volatile market.
>
> Roubini- he was right, likely continues to be right. The economy
> and the market is not healing anytime soon - notwithstanding the
> massive stimulus and the big rally. Consumer deleveraging will kill
> all recovery, hopefully the US consumer and US stock investor would
> have learnt their lesson.
>
> Here is the latest from Roubini on Forbes today: Ten Risks To Global
> Growth
> "...true de-leveraging by households, corporate firms and financial
> institutions has not even started, as private losses and debts are
> being socialized and put on the balance sheet of governments..."
>
>
> www.forbes.com/2009/05...
Essentially meaning shallow recovery, no V rather a VL (Very Long recovery)
On May 28 12:45 PM Suncatcher wrote:
> OK, I don't follow Roubini closely so tell me how your last paragraph
> leads to Roubini's call of the recession ending by the end of the
> year? That somehow appears to be in conflict.
If one subscribes to the view that the MSM is comprised mainly of mindless cheerleaders/puppets, it would make sense that they would seize that snippet of his remarks as "proof" that they were/are right.
Somebody (maybe Keynes?) said something to the effect that when the facts changed, they changed their mind. No one can deny that with all of the money and plans that have been thrown at the global slowdown, recession, whatever one choses to call it, the "facts" HAVE changed, to some extent, even if for the short/intermediate term.
Nouriel Roubini, the famously glum economist who predicted the financial crisis, said that while the recession in the United States may well be over at the end of the year, another dip was still possible next year.
"I still expect that economic growth in the U.S. is going to be negative through Q4, and that we'll see positive growth in Q1," Roubini told Reuters in an interview on the sidelines of the Seoul Digital Forum.
"The U.S. recession is going to be U-shaped, lasting roughly 24 months," he added. "Compared to the current consensus that says we are practically at the end of the recession ... my view is: no, it's going to last another six to nine months before it's over."
Roubini, who teaches at New York University and heads research firm RGE Monitor, had said on Wednesday that the end of the global recession was likely to occur at the end of the year. This spurred speculation that his outlook had grown more optimistic, a suggestion denied by him in the interview.
"Because I said the recession is going to be over by year-end, people say I am an optimist, but I've been saying the same thing for a while."
"I would say compared to current consensus, I am much more bearish," he said. "Compared to other people that say it's going to be a doomsday, I could be considered an optimist."
Roubini stood by a recent article in which he mentioned the possibility of a "perfect storm" in 2010.
"There is even a risk of a double dip, a W-shaped recession at the end of next year," he said, a combination of rising oil prices, rising public debt and increases in real interest rates, rising concerns about inflation and the expiration of a number of tax cuts in the United States.
All thing's considered, I'll stick with the Roubini analysis, thank you.
You don't have scientists in two camps on Newtons Laws of Motion. That is accepted, it is a law. That is science. You see scientists split on things like Global Warming because Global Warming is not science. It is opinion and guesswork.
People peddling future predictions 100% are morons. They are all over Seeking Alpha and all over the internets these days. Many people are making a ton of money on the financial crisis. A "lost decade" would be a financial windfall for them like no other.
And all the slaves to money that are wasting their time on this are eating it up.
One thing that is for sure is that internet message boards are never going to lead to economic growth and that you can take to the bank.
On May 28 11:53 PM Suncatcher wrote:
> I haven't been at this long but the more I read and watch the more
> I tend to agree with those that say:" When everyone agrees; do the
> opposite". I think we are getting closer to the "experts" agreeing
> that we are turning a corner. What is a budding contrarian to do?
"One of my passions in life is calling people out."
"The New Reality is simply that very few analysts, strategists, or economists called the top of the 2007 US market move as well as the bottom of the 2009 one."
WOW! That was a shorter year than normal...oh, wait, 2009 is not over yet. Not only will we make new lows but we will beark 5,000 by the end of the year.
BTW, you really need to read Roubini's testimony before congress to appreciate the man - it was amazingly prescient. That he was way early is NORMAL for anyone who sees such basic, fundamental flaws in an economy, mainly because greed can keep a bull market going a lot longer than anyone would reasonably expect. That same greed is what we HAVE to work off, and we have almost three decades of it to work off.
> As a contrarian myself, I can tell you that it only works at certain
> times. Consider that everone agreed back in October that things were
> going to get worse - they did. I've found that the best time to become
> contrarian is when everyone agrees to a trendline that has been happening
> for a long time - ie, in 2000, everyone agreed that recessions were
> a thing of the past and the stock market would keep going up forevever.
> In 2005, everyone agreed that the housing market never crashes and
> that you can't go wrong buying a house no matter how expensive it
> is. If you just willy nilly go contrarian, it will burn you badly.
>
Damn, someone who actually makes sense. And isn't it funny how even the bears are now saying we might have hit the low? Hmmm...kinda reminds me of this exact same time last year, except then things looked a lot brighter.
> I'll take Roubini going bullish as a bearish indicator.
And I'll take you taking Roubini going bullish as a bearish indicator as a bullish indicator.
Ouch! That hurt!
> ECONOMICS IS NOT SCIENCE. It is guesswork. Everything just about
> in Economics has people who believe differently. Much like politics.
>
> You don't have scientists in two camps on Newtons Laws of Motion.
> That is accepted, it is a law. That is science. You see scientists
> split on things like Global Warming because Global Warming is not
> science. It is opinion and guesswork.
> People peddling future predictions 100% are morons. They are all
> over Seeking Alpha and all over the internets these days. Many people
> are making a ton of money on the financial crisis. A "lost decade"
> would be a financial windfall for them like no other.
> And all the slaves to money that are wasting their time on this are
> eating it up.
> One thing that is for sure is that internet message boards are never
> going to lead to economic growth and that you can take to the bank.
>
I liked your comments and gave you a thumbs up because you made me think, but economics really isn't guesswork, though it certainly isn't science, it's just a lot more complicated than most people can deal with.
You have to divorce yourself from your ego (my biggest problem) and then be able to ignore false data that is often presented by the media, who have an interest in the economy always doing well.
Then you have to be a student of history and human psychology and most of all you have to be able to mix all of that in your head at once and come up with the likeliest outcome.
People like to compare it to predicting the weather and I agree: it's actually easier to predict, in a general way, what the weather will be like in July of 2021, than June 3, 2009. While it may be farther away I can be pretty certain that July of 2021 will be a hot month while June 3 in 2009 may be 60 degrees or 95 degrees.
What I can tell you with a great deal of confidence is that late this year the stock market will be lower than our March lows and if that were NOT to happen then it becomes MORE likely that the stock market does not do well in coming years. This is all based on the fact that while we can fool oursleves for years and even decades about how much stocks are worth, eventually they will be revalued to what they are worth. History tells us that.
Given that the revaluation has begun it is likely to continue until finished, with rallies large enough to draw people in and take their money.
I do know that there is not much value in this market and that history suggests it will take years and likely decades to build in that value and readjust the thinking of investors.