RJMoran's Comments

What Unemployment Numbers Can We Expect?

Fri, 07 Aug 2009 13:19:55 -0400

The 'average work week' is down to it's lowest level ever at 33 hours. I know from experience that many people just give up looking for work and couldn't therefore be counted in any unemployment numbers. I wouldn't be surprised to find an accurate unemployment count to be closer to 20% than 10%. Who are we kidding!?

Economic News, And Outlook, Continues Mixed

Tue, 04 Aug 2009 22:32:23 -0400

@User353732
I hope others appreciate the quality of your comments as much as I do!

GDP: Here's a More Realistic Look

Sun, 02 Aug 2009 11:29:44 -0400

@User 353732:
...WELL SAID!

This chart, which maps world GDP growth from 1980 through 2015 (using IMF's predictions), leaves you wondering what happens if we don't get that big bounce. Which may be why the Cleveland Fed warns that risks to the outlook "still remain more heavily weighted toward the downside than the upside."

Thu, 30 Jul 2009 20:20:34 -0400

I'm highly skeptical of the 'intense V' shape! Even if you just take the 2000 recession with it's flattened out recovery, add in credit contraction and massive debt overhang and you wouldn't get anything nearly so rapid an upward move. I just don't see their 'projection' out to even 2011 being even close... I can draw pretty lines too! Nice try though IMF!

Scratch That: Rosenberg Doesn't See a Green Shoot

Thu, 30 Jul 2009 13:39:11 -0400

<<<"There are more than 800,000-900,000 vacant residential housing in the US, 'not a backdrop for anything but lower home prices'.">>>
HUH?
I've been reading that there are an estimated 18.9MILLION vacant homes in America today... Both figures can't be right!?

Americans Are Saving Like There's No Tomorrow

Sun, 26 Jul 2009 16:32:01 -0400

I only spend money on food! No restaurants, movies, extraneous driving,NO shopping of any kind, only food and basic bills... I'm sure I'm not the only one living this way!

After Peak Finance: Larry Summers' Bubble

Fri, 24 Jul 2009 13:00:18 -0400

...and the Pound and Euro just levitate like nothing is wrong!

After Peak Finance: Larry Summers' Bubble

Fri, 24 Jul 2009 12:58:41 -0400

Finance in the UK, traditionally 6% of the economy, has, in recent years risen to 30% of the entire economy. Not to mention the 'feeder economies dependent on a healthy 'finance' sector like high end restaurants, the art market, high end real estate (both city AND desirable countryside, retail, toys: boats,planes,airline tickets) as well as real estate in countries like France, Spain, Italy, etc benefiting from increased British purchases of properties and assets.
A "structural contraction" would seem inevitable with RBS/HBOS type consolidations not to mention MANY percentage points of real industry shrinkage and yet everyone in the UK seems to be 'whistling past the graveyard' hoping 'recovery' will make it all better! As the grumpy gnome Robert Reich has said: "It ain't coming back"! (don't think he said "ain't"/but something close enough)

Doubling down: Figures from the top seven U.S. commercial banks show they went easy on increasing loan-loss reserves in the quarter, betting on the economic recovery. "If they’re wrong, and borrowers don’t pull out of a tailspin, bankers and their investors will take a beating."

Fri, 24 Jul 2009 12:05:01 -0400

"sentient economist"!? Good one. IS there such a creature?
I believe a MASSIVE one time 'debt>equity swap' has to occur across the country to avoid the long, slow slog-type recovery CausIn speaks of... Banks will just have to 'eat it.' We all have been!
"America will do the right thing, once all other alternatives have been exhausted!" (not sure who said it but it's brilliant and precient)

In Economic No Man's Land

Thu, 02 Jul 2009 16:37:50 -0400

What do we think the knock on affect of will be when 'unemployment benefits' end?! LESS spending. NO new saving (ya can't save what ya'll are not bringing in) People start eating their savings! Accelerated foreclosures. What have I missed?!

"The big impact starts to hit from about now onwards... I still hold out hope it will be a V-shaped recovery. It might not be the most likely scenario but it is not as unlikely as many people think." - Christina Romer, chairman of the U.S. president's council of economic advisers, on stimulus package

Mon, 29 Jun 2009 11:31:10 -0400

herbert hoover, PRICELESS!

"The big impact starts to hit from about now onwards... I still hold out hope it will be a V-shaped recovery. It might not be the most likely scenario but it is not as unlikely as many people think." - Christina Romer, chairman of the U.S. president's council of economic advisers, on stimulus package

Mon, 29 Jun 2009 11:28:31 -0400

...I want some of what Christina Romer is smoking!

There Is More to Why Canada's Banks Are Better

Tue, 16 Jun 2009 11:58:41 -0400

While there is a painful Canadian trait I call "Pat ourselves on the back-itis", the fact is that borrowing there is extremely difficult and VERY costly! The 'spread' and their conservative, restrictive banking habits may be good for their bottom line but it chokes off commerce, growth, etc! "...Difficult for small borrowers" is being overly polite.

The Bernanke Conundrum

Mon, 08 Jun 2009 14:45:50 -0400

... Without being too verbose about it, I have to agree with the 'truth' embedded in David White's response: namely, "... By addressing the problem at the source, the government would lessen the possibility of extraneous factors wrecking havoc with it's plans..."
The self reinforcing loop of depreciating home values throwing more homes onto the market either by job loss or 'underwater mortgage' leading to more homes on the market MUST be stopped if there is any hope of economic stabilization and/or future growth...
A modest uptick in the cost of a mortgage is itself a house price depreciator but I feel this is much less a problem than a deflationary loop that almost guarantees an overshoot to the downside. There may be a 'market clearing point' where affordability, mortgage rates and price intersect but crashing through the floor will, I fear will NOT be good for the economy or the citizenry...
Is this national 'reset' we are all going through approaching 'dangerous' or am I just being fretful?

Talk about a budget problem. If California rejects three budget balancing measures next week, Governor Arnold Schwarzenegger may be forced to release 40,000 prisoners or fire 51,000 teachers.

Tue, 12 May 2009 12:20:30 -0400

Would anyone even notice 40,000 more ex-prisoners in a state with a population of over 36.7Million!? Doubtful!

12 Reasons to Short Gold

Thu, 12 Feb 2009 00:58:03 -0500

It probably DOES have a bit left to run, perhaps to 1200.00/MY contrarian view includes 1) a recommendation by Goldman Sachs/may I remind everyone that they also thought oil was going to $200/bl/ 2) Gold is an inflationary hedge and does NOT do well in times of deflation. It may well be that this deflationary cycle will finally catch up with gold as well. If we have no money due to global deflation, where does the $$ come from to BUY the gold and keep demand rising? 4) It's been oft said "Gold goes up on an escalator and comes down in an elevator". Corrections are sharp and FAST! Be careful out there! RJM

Is Financial Catastrophe Imminent?

Fri, 06 Feb 2009 00:12:58 -0500

I have to agree with JSTRATT! Banker hubris in this situation is astonishing! They've all had their powwow in Washington and they KNOW they'll get away with this...
As for the other suggestions on your list? You're quite right in saying that even a relative few changes at this junction would go a long way to turning this tanker. Coherent, targeted, effective change during a crisis isn't exactly Washington's strong suit...They usually go for scattershot over spending hoping that something will stick.
And no matter how tempting from a moral standpoint, shutting down even part of the banking system, with it's massive shadow market of derivatives is not possible, likely or prudent! They'll all 'go along to get along' and we'll somehow muddle through I guess. The alternative IS unthinkable...No one seriously wants to or is the system likely to 'go there'! We've had a glimpse at 'Global financial meltdown' and I don't believe we'll cross that rubicon... We've all read sci-fi/futurist scenarios 'post social order breakdown' and I doubt we're there. yet

Ambrose Evans-Pritchard, Are We Really Nearing a Bottom?

Thu, 05 Feb 2009 23:50:16 -0500

GOOD GRIEF! Did he really type all that?! Edit man, edit! Me thinks you need to get off the farm and get out a bit more! Was there a point to all that?

America's 'Bad Bank' Team

Tue, 03 Feb 2009 19:36:29 -0500

...sorry for the long post but we DO NOT now have the luxury to suffer fools here!

Can the Economy Recover in the Midst of a Consumer Confidence Crisis?

Tue, 03 Feb 2009 19:32:59 -0500

Jolly Rancher/ the wealth 'hit' these retirees have recently taken also means they won't be skipping into retirement a 'la bon temps roulez'! (sic). That coaster may have less roll to it than you think...

America's 'Bad Bank' Team

Tue, 03 Feb 2009 19:22:33 -0500

Why is Washington SO afraid of big banks?!
I have an idea that seems to have been 'run over' by the discussion lately!
Why not let the FDIC DO what it is it DOES! Declare a few of these bigger entities insolvent vis a vis their capital/debt requirements, seize them, clean up their balance sheets, fire the executives, club the bondholders, send out a new, better capitalized, more sturdy bank. Wash, rinse, repeat! Isn't THAT what the FDIC does and has been doing to many 'lesser' banks?! (Everyone would gladly put their private capital into that!) Why is everyone SO afraid to stand up to Citi or Bank of America. You might find that 'doing the right thing' with just these two banks would allow the others to 'get religion' and fix themselves...!
Nothing short of a blast of fresh, clean air through these institutions will be effective or worth the effort at this point! More capital injections?! These guys have had virtually limitless capital to date and have managed to f***k everything up. Oh, and while you're at it, outlaw naked CDS's!
There already exists a vehicle for fixing this mess. Why is Washington SO afraid of a few mega banks?! Sad really. Politicians (probably by definition) do NOT seem to have the balls to just do what seems SO obvious, and so overdue!
The alternative, ie dragging out this fiasco with 'guarantees', ring fences, bad bank, capital injections, blah, blah blah is that it is going to drag the economy inexorably downward. Not to mention the hit our already bleak global credibility will take when we cave in to financial institutions that, for a lack of a better word, just screwed up.
The economy seems to have be accelerating to the downside and even THAT does not quicken the resolve of the elected. Just how bad does it have to get?! The list of the near-defaulting countries, companies, individuals, counties, states, etc is getting longer by the day. And yet all we see is a side show of 'executive pay', moral hazard, taxpayer protection, help for homeowners, etc,etc...
Why is it that given a brilliant, rational moment of clarity, the nation would rather dither into a ditch?! We would simply write off ANY other country that did not simply do what was required to clean up their act. Be it a Latin American country, Asian, Eastern European?! Capital, inventiveness, business, would simply pass them by till then. Why do we seem to think we can get a pass on this stuff?! We have a chance to quickly right this ship and the 'shock and awe' the banks need is not going to happen...If the Obama Administration does not get this right, I fear it will be a mortal wound since ALL special interests will be watching! After this, how credible will their pulpit be on the environment, defense, climate be!?

Wall Street Gets Downbeat on Solar

Thu, 29 Jan 2009 21:34:27 -0500

Solar also takes a great deal of 'credit' to finance the build out which, as we all know will be tighter going forward. Gumby is right. Trying to 'scale up' with solar is next to impossible. ALL the solar panel output in the world does not equal the electric output of ONE coal fired power plant! I'm all for wind, solar, tidal, etc, but people do NOT get it the scale issues. And further, these are not 'alternative' power sources but derivative power sources. They ALL require fossil fuel inputs in factories, electricity to build the module, ship it, install it. When solar powered plants create parts for wind turbines and solar panels, then you'll be talking. Otherwise they ALL 'derive' from fossil fuel energies in their creation (metal, part manufacture, etc) to production, shipping etc. As an investable idea though, they ALL require a LOT of credit...Not good, these days!

Global Economic Outlook: Today's Senate Testimony

Thu, 29 Jan 2009 20:09:43 -0500

I read the whole piece and the author is correct... Though he did say their baseline "did not look to improvement anytime soon," I am glad he didn't go into too much detail about what the consequences of a further economic deterioration would do to societies around the world. Nations and groups of nations can only take SO much contraction and deflation. At some point very soon, this will reach an inflection point of destabilization. I sincerely hope we do not cross this rubicon...
My head hurts! RJM

While Negativity Rules, A Little Optimism Is Warranted

Tue, 27 Jan 2009 11:28:20 -0500

Fashionable pessimism aside, this contraction HAS to be at least as bad, if not worse than '73, or '81 given the global breadth and depth AND speed of the situation this time. IF you give some credence to the 'this time it's different' thinking, then we probably won't be out of this sooner than the sixteen month previous recessions. Even IF we hit a sixteen,twenty month target, the path to the other side of this isn't going to be pretty...
The pilot light of optimism remains on however...

America's New Stimulus Package: Looks Good, But Is It Enough?

Thu, 22 Jan 2009 22:51:21 -0500

As much as it feels a bit odd to agree with someone who's handle is DUUDE, I think he has it about right! I'd rather give the banks all the rope they mutually need with mark to market rules and let them sort it out then throw trillions of US Taxpayer $$$ at them with no adult supervision as to it's ultimate use or purpose!

Things to Consider About an Aggregator Bank Intervention

Wed, 21 Jan 2009 14:25:20 -0500

While I agree with the part about buying XLF, I'm not sure shorting the TLT is wise. The gov. has said it will do everything it can to keep rates down to help the housing industry recover. I assume that means they'll intervene in treasuries and keep them from falling...?!

Nationalization Is Not Inevitable

Tue, 20 Jan 2009 20:14:42 -0500

I think (short of nationalization) that once you remove the toxic part of their balance sheet, shouldn't the stock price RISE quite a bit?! JPM, was trading around $50/now it's $20 and falling... I can't see how the stock price remains depressed, or worse, falls once the bad assets are removed. My assumption (based on VERY limited knowledge,LOL) would be that the equities would rise but who knows, they could just remain flat for some time to come even without the toxic assets on their books...In other words, do they then become attractive to private capital again or do they remain radioactive till the recession/depression fades?!

Nationalization Is Not Inevitable

Tue, 20 Jan 2009 18:04:18 -0500

Say the new administration kicks into being a new "RTC-type" entity and sweeps all the bad stuff off the books of the large banks (C,BAC,JPM,MS,GS).
I'm curious, at THAT point, what happens to the stock prices? Do they rise? Do people then feel safe enough to buy equity in them from here?! What sa ye, gentlemen?!

The Truth About Today's Gold Market

Thu, 15 Jan 2009 22:42:07 -0500

So I'm confused! Is the price of gold going UP or DOWN?! If gold can't go through the roof during a 'global fiat currency' freakout, or credit crunch, debt bubble burst, whatever, then when? I think the 'tulipmania' comment. is on the right track. My sense is that the deflation demon will finally take out gold ('goes up on an escalator and comes down in an elevator'!)
I also agree with whomever said gold was a good hedge against inflation NOT recession. The hysterical chatter about an inflation time bomb going off is exactly that... I'd say gold will hit $500 well before it hits $2K.

Crude Reality: How Long Can Oil Stay Down?

Wed, 14 Jan 2009 10:36:30 -0500

Maxe, it's 'wholeheartedly', not holehartedly/ 'stabilizing, not 'stabalising' Good grief! But yes, I agree...!