Rantor

Wednesday Outlook: Commodities, Global Markets

Why is no one talking about the fact that the profits at many of these companies is on a lot less total revenue. CAT down 44% year on year! That is not good news and speaks to the bigger trend in the economy, collapse.

Think Twice: How People Are Fooled by Irrelevant Data

For three years, I, a mere political science major, had to work on the defense budgeting process. The acquisition guys always came in with long powerpoint briefings filled with millions and sometimes billions in bills. I would start asking questions about their numbers and often within 20 minutes shred their program to pieces because they didn't understand where their numbers came from or how multiyear procurment programs were built and could be executed. Your comments about initial estimates and knowledge of the whole system are right on. When the engineers and accountants blindly accept the vendor's numbers and methodology, they are being lazy and losing money for someone.

Some Misconceptions About the Great Depression

The Depression was the normal economic response to the inflation of the 1920s. We are seeing a similar response to the last decades inflationary policies. I would suggest that 2008 equates to 1930 on your chart and that despite current government expenditure efforts we have at least two more years of weakness in the economy and the markets. (The Credit Suisse sub-prime mortgage reset chart shows that no full recovery can come into play before that mess resolves itself). FInally, government spending is not an efficient way to improve GDP. True recovery occurred after WWII when Truman cut government spending and lowered income taxes.

A Look at Some Recessionary Facts

You are ignoring the housing market and unemployment problems which are going to stretch this recession out into 2010 or longer. These two problems are going to continue to beat down on the consumer and prevent an early end to the down cycle. The housing problems will also continue to beat on the banking/finance industry through 2012 as we must work through all the sub prime 3 and 5 year ARMs.

Calculating a Housing Bottom: Volume vs. Price

Great article, what I would like to see is a study of projections on the impact of increasing unemployment on the housing market. I am confident that we will see a serious increase in foreclosures over the next two years--propelled by both unemployment and ARM refinance problems. This will exacerbate the recession, possibly tipping us into depression. Unfortunately I haven't seen any decent projections on this. Most pundits seem to avoid this, optimistically believing that the market will be healed within 6 months.

Last Thursday Was the Bottom - It's Time to Get Back in

I think the author misses out on a big problem everyone is still hiding from. With increased unemployment and housing values dropping we are going to continue to see two more years of three-year ARMs adjusting and a lot of homeowners that won't be able to afford the adjustments. I think that means two to three more years of stagnant consumer spending in the US. As government spending and the debt continues to climb we will see inflationary impacts on what is a deflationary economic period. Possibly a repeat of stagflation... and to get out of that Paul Volker (he's back) raised interest rates dramatically to tame inflation... which does what to the housing market? Extends the current malaise, depresses prices, things just won't get better next year and that means the bottom is not in sight. Enjoy the Bear-Market Bounces when they come. We can not win this by government action. Government inaction would probably get us through the pain more quickly.