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Doug Poretz

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  • Introducing the new poor - middle-classers who have suddenly found themselves relying on government assistance for the first time ever, and could potentially be dependent for years to come.  [View news story]
    The mirror image of Obama and Reagan: Reagan coalesced and won support from the middle class by saying: "Look at the wealthy ... see how they live ... you can live like that too .... vote for me and my policies and you will be able to go for that dream;" Obama coalesced and won support from the middle class by saying: "Look at the poor ... see how they live ... you are at risk of living like that too ... vote for me and my policies and I will protect you from that nightmare." So, that leaves the question: is the middle class more likely to emulate the wealthy or the poor?
    Feb 22 08:23 AM | Likes Like |Link to Comment
  • Financial Crisis: What if Carnage Is Structural, Not Cyclical? [View article]
    "recovery" is not synonomous with "return"
    Feb 22 08:16 AM | 2 Likes Like |Link to Comment
  • A Slow Return for Consumer Confidence [View article]
    "Recovery" and "return" are not synonomous
    Feb 14 06:22 AM | 1 Like Like |Link to Comment
  • In the wake of the Berkshire Hathaway (BRK.A) downgrade yesterday, consider this: Only four U.S. non-financial firms now sport AAA ratings: Automatic Data Processing (ADP), ExxonMobil (XOM), Johnson & Johnson (JNJ) and Microsoft (MSFT). Only 18 financial companies have AAA credit. Indeed, the world has become a much more leveraged place.  [View news story]
    At one point, this recession/economic period was called by some "The Great De-leveraging" -- that's proving to be a major misuse of a description.

    But there is another misused description that concerns me more: the news media interprets bad news as something that might slow down the recovery or dampen the recovery, and every time they report that it assumes that we are in fact IN a recovery, even if it is tentative and early. I do not see anything (except aberrations that prove the rule) that would lead anyone to believe a recovery has actually begun, albeit there are some indications that the speed of the decline is slowing in some instances and some people and enterprises have figured out how to cope, at least for now.

    To me, when just about every important trend is heading south, regardless of the pace, we are not in even the very early stages of a recovery. Instead of describing bad news as something that might slow down the recovery, the news media should be telling the core truth: things are getting worse. To do otherwise is to mislead the public.
    Feb 5 01:31 PM | 1 Like Like |Link to Comment
  • In the wake of the Berkshire Hathaway (BRK.A) downgrade yesterday, consider this: Only four U.S. non-financial firms now sport AAA ratings: Automatic Data Processing (ADP), ExxonMobil (XOM), Johnson & Johnson (JNJ) and Microsoft (MSFT). Only 18 financial companies have AAA credit. Indeed, the world has become a much more leveraged place.  [View news story]
    great observation
    Feb 5 01:18 PM | Likes Like |Link to Comment
  • On the Brink: Paulson's Memoir of the Financial Crisis [View article]
    All of which happened under the Bush Administration.
    Feb 5 11:52 AM | 1 Like Like |Link to Comment
  • Market Indicators? Try Asking the Right Question [View article]
    To make your point even more pointed: when Ariana Huffington appeared on CNBC with Kudlow and dared to quote back to him statements he made several months earlier as quoted in Time magazine, he asserted that was an "ad hominum" argument, thereby evidencing either his inability to understand Logic 101 or his willingness to alter the standards of logic humans have used since Aristotle. Since when is quoting something you said previously an ad hominum argument????
    Jan 25 11:38 AM | Likes Like |Link to Comment
  • Market Indicators? Try Asking the Right Question [View article]
    Ask the right questions ... look for that which is ignored ... right on! Now consider this analogy:

    If we look at the use of heroin in this nation, we can find blame for the problem with those who grow the poppies, those who convert that raw material into the usable narcotic, and those in the supply chain all the way to the final seller to the user. We could blame all those people. I also think the heroin user should take some of the blame as well.

    Similarly, if we take a look at the financial crash of late 2008 and all the associated economic problems ranging from the decline in home values to the increase in unemployment, we can find many to blame including investment banking firms, mortgage bankers, real estate agents, stock brokers who over-hyped, companies that over-expanded, credit card companies that issued too many credit cards with limits too high and criteria for credit too low .... the list can continue. But just as in the case of the heroin user, shouldn't the final user -- in the case of the economy, that would be the consumer -- share some of the blame too? For example, shouldn't the consumer be "blamed" for using too much credit, for buying houses they knew (or should have known) they couldn't afford, for betting everything on the idea that all trees would grow skyward forever?

    When something needs to be corrected, whether it is the use of heroin or a wide-spread financial catastrophe, ALL the players are bound to change if there is to be a recovery. In the case of heroin, you would expect the end user to change as a part of their recovery and thereby the entire heroin market would be changed. A successful "recovery," therefore, is not synonymous with "return" -- and those in the heroin business better accommodate that fact into their future plans.

    In the case of the broader economic environment, wouldn't it be logical to expect the end-user to change? Shouldn't we expect the consumer to change? And won't some of those changes, by definition, force changes in other areas of the economy?

    The US consumer has been on one track since the end of WW II -- to consume more, more expensive, more on credit, newer, flashier, etc. The consumer was on that track so significantly that their very act of consumption accounted for more than 70% of the US economy. If the consumer changes, won't that bring basic and fundamental change to the economy itself? And, if so, wouldn't those who play other roles in the economy be wise to integrate those changes into their future plans?

    If so, then the question arises: Is the market moving with a full appreciation for the changing consumer? Or, would it be more correct to assume that the consumer's recovery from the numerous rights to the jaw that have pummeled them, will not matter in the future, and that the "recovery" will indeed by synonymous with "return"?

    I happen to think that the consumer has changed and will change more -- not only in regard to how they spend money and use credit and look at the wisdom of buying a new house, but also in regard to how they see their priorities and whether quality of life and work may outweigh the importance of materialism. What if that were the case? What if the consumer was changing and will continue to change in a way that places the future even further away from the past? What if their acquisition of new TVs and cars were pushed off just a year or two or three? What if they decided they didn't really care to "buy up" to a bigger and fancier home? What if they decided that their cheap tennis shoes were fine and they didn't need to buy multi-hundred dollar shoes? Or go out to eat as often and as expensively? What if they decided that the "hunker-down" approach to spending they have recently adopted shouldn't only be a way to contend with the current financial situation but that it is a good approach even when they were rolling in money? Is the market taking that into account at all?

    I don't think so. I think the market generally is indeed missing some important questions, and among the most important questions is: How and what and to what degree will the consumer be driving the economy in the future?
    Jan 21 04:44 PM | 2 Likes Like |Link to Comment
  • Quick Thoughts on December 2009 Labor Reports [View article]
    Barack Obama told Joe the Plumber that he wanted to redistribute the wealth. He has done just that: as the poor and middle class get obese on $1.00 specials at fast food places because that is all they can afford anymore, there will be historically big bonuses for Wall Streeters! Obama has succeeded in his goal, except the redistribution of wealth has gone in the exact opposite direction he wanted!
    Jan 10 01:09 PM | 5 Likes Like |Link to Comment
  • The U.S. Economy: Not Back to Business as Usual [View article]
    "Recovery" of one sort or another, to one degree or another, will not equate to "return."
    Jan 10 12:51 PM | Likes Like |Link to Comment
  • Commercial Real Estate's Unfolding Disaster: Neither Surprising Nor Containable [View article]
    But those who have compared a current situation to a previous situation somewhat similar in appearance but different in fundamentals are making the comparison to the wrong circumstances and thus their conclusions will be wrong. You prefer to think that we are going through a cyclical downturn in commercial real estate -- I've lived through those before and understand them. You are entitled to your opinion and you might be correct. I'm simply suggesting that you may be mistaken and that this isn't a cyclical downturn in commercial real estate but something different -- not the end of the world, but something different -- not something unique but something that would be more accurate to compare to previous eras and phenomena. Check back in a year or so (or less), and we'll see whose view was correct.
    Jan 9 11:01 AM | 1 Like Like |Link to Comment
  • U.S. Employment: The Big Picture [View article]
    Would be interesting to know where you are a teacher and what the demographics are -- otherwise, it is illegitimate to make a leap to a national and ongoing trend based on what is happening at one High School in an unknown location (middle of public housing or middle of a high wealth community or somewhere in-between?)
    Jan 9 09:58 AM | 4 Likes Like |Link to Comment
  • Why the Negative Jobs Report Is a Non-Event [View article]
    That link does not lead to a "full argument" at all -- it simply links to Mr. Cooper's blog -- there may well be fine articles there, but this link is simply to the blog.
    Jan 9 09:26 AM | 5 Likes Like |Link to Comment
  • Commercial Real Estate's Unfolding Disaster: Neither Surprising Nor Containable [View article]
    As to Tack's quote of Sir John Templeton that "the four most dangerous words in the English language are ' this time it's different'": It depends on what the "this" is, doesn't it? If you say that what we are going through is a cyclical downturn in the commercial real estate market, then Templeton's advice would be that we need to look at other cyclical downturns in the commercial real estate market, understand them, and then understand that the current one won't be much different. But what if the "this" we are going through is not a cyclical downturn in the commercial real estate market? What if the "this" in the current instance was a global shift in many fundamentals, for example: a total global revolution in the way human beings communicate; an accelerating transition from a manufacturing to a knowledge economy; transference of political and economic power, at least in part, from one set of nations to others; the emergence of a new type of warfare where the primary combatants are no longer "nations" (at least in the way "nation" is usually defined); advances in technology that impact every nook and cranny of our life, often in very fundamental ways .... What if you defined the current "this" in that way instead of as simply another cyclical downturn in commercial real estate? What if we said that the current "this" is more like the multi-generational transition from the agrarian to the manufacturing economy, or the Renaissance, or maybe the Fall of Rome? How about if we said the current "this" is all part and parcel of the human's transition to the more scientifically accurate Einsteinian worldview, where space and time are not distinct but one, comparable to when the century+ long transition from an earth-centric universe ushered in by the Copernican Revolution? It all depends on what we compare the current "this" to, doesn't it? For me, I think that the current "this" -- what we are going through economically, socially, technologically, politically, culturally globally -- is not simply a cyclical downturn in commercial real estate, but something far more significant. All we have to do is identify the right "this" to which we should compare it, and THEN we can invoke Templeton's caution to avoid thinking that this time it is different.
    Jan 9 07:52 AM | 1 Like Like |Link to Comment
  • Why the Negative Jobs Report Is a Non-Event [View article]
    I would ask the Zacks writer to take this article and re-post it every 30 days starting in the first week of February 2010, and preface it by saying "This is what I wrote on January 8, 2010." Then we can all very easily determine just how correct or off-base the author of this was. I find it incredible how "sages" disavow what they said after they said it, as Larry Kudlow disavowed his prediction quoted in Time magazine that the Dow will hit 50,000: "I never said that," he told Ariana Huffington as he cut her off from reading the quote the other day on TV, charging that citing a former prediction was an ad hominum argument (and, in the process, evidencing that he doesn't understand Logic 101). Maybe the numbers would change on how many people are following various writers and trusting various commentators when the author must revisit their predictions on a regular basis.
    Jan 8 09:36 PM | 11 Likes Like |Link to Comment
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