I was wrong about recession

kblair7 · 03-14-2008, 11:00 AM

Okay. So I was wrong.

I had spent a good deal of time trying to rebut the presumption that we were on the road to recession--the default of the Carlyle fund is actually a good lesson to other managers to be far more careful when investing in (very risky) securities. Most of them crying about a 10 sigma event, that they could never have predicted the crash in the SP markets "a shock". That will make them think twice when assessing risk on options.

It has now become apparent that we have indeed slid into a crisis. This is not only effecting the United State but it will have global repercussions. It has been felt as far as Japan already when they announced they will be tightening credit due to the devaluing of the dollar against the Yen.

Quote:

`I believe the U.S. economy is now in recession,'' Feldstein, president of the National Bureau of Economic Research, said in a speech at the Futures Industry Association conference in Boca Raton, Florida. ``The situation is bad, it's getting worse and the risks are that the situation could be very bad.''

Feldstein is a member of the NBER's business-cycle dating committee, a group of economists that marks the beginning and end of expansions and recessions. It could be months before the group officially declares when, if at all, a recession has started, committee members say.

The slump reflects structural problems in the housing industry and financial markets, said Feldstein, who is retiring as NBER president this year. Financial markets are exhibiting a pervasive ``unwillingness to trade'' and are suffering a ``loss of confidence'' about current valuations of assets.

Unfortunately, all of this is a retrospective cycle it is impossible to know the long-term peak activity. I am pretty pessimistic about the short-term, after Bear Stearns announcement today--many think their survival is visibly questionable at this point, as do I. However the gov't bailed them out by injecting cash. IMO, they should have not been bailed out, its rewarding a bank who has not been a responsible lender. How could you give credit to someone who has not put a down payment on the RE? Not even 5% of the total cost before taxes? (thanks again IRS)

A good development from the LD is that core prices which exclude food and energy has NOT gone up.

Well what you do in a storm is put you're head down and hope you make it though.

DRS112 · 03-14-2008, 11:04 AM

Quote:

Originally Posted by kblair7

Okay. So I was wrong.

I had spent a good deal of time trying to rebut the presumption that we were on the road to recession--the default of the Carlyle fund is actually a good lesson to other managers to be far more careful when investing in (very risky) securities. Most of them crying about a 10 sigma event, that they could never have predicted the crash in the SP markets "a shock". That will make them think twice when assessing risk on options.

It has now become apparent that we have indeed slid into a crisis. This is not only effecting the United State but it will have global repercussions. It has been felt as far as Japan already when they announced they will be tightening credit due to the devaluing of the dollar against the Yen.

Unfortunately, all of this is a retrospective cycle it is impossible to know the long-term peak activity. I am pretty pessimistic about the short-term, after Bear Stearns announcement today--many think their survival is visibly questionable at this point, as do I. However the gov't bailed them out by injecting cash. IMO, they should have not been bailed out, its rewarding a bank who has not been a responsible lender. How could you give credit to someone who has not put a down payment on the RE? Not even 5% of the total cost before taxes? (thanks again IRS)

A good development from the LD is that core prices which exclude food and energy has NOT gone up.

Well what you do in a storm is put you're head down and hope you make it though.

Managers have shown a propensity to act lately as if we live in a risk free world...we saw it in Asia and Russia...and now here....

anyways...as far as the global repercussions...did you see the article from the Economist I posted in the economics and finance forum? Yes we do have a forum for it

Could Recession Spread from America?

kblair7 · 03-14-2008, 11:13 AM

Quote:

Originally Posted by DRS112

Managers have shown a propensity to act lately as if we live in a risk free world...we saw it in Asia and Russia...and now here....

anyways...as far as the global repercussions...did you see the article from the Economist I posted in the economics and finance forum? Yes we do have a forum for it

Could Recession Spread from America?

No shit?

OOooOOoo

DRS112 · 03-14-2008, 11:37 AM

Well...if you don't mind I'll move this thread.

VKMHVM2 · 03-14-2008, 11:58 AM

Quote:

Originally Posted by kblair7

Well what you do in a storm is put you're head down and hope you make it though.

Buy gold and silver. : )

DRS112 · 03-14-2008, 11:59 AM

Quote:

Originally Posted by VKMHVM2

Buy gold and silver. : )

How much higher do you think it's going to go?

VKMHVM2 · 03-14-2008, 12:03 PM

Quote:

Originally Posted by DRS112

How much higher do you think it's going to go?

I am predicting $1200-$1250 gold and $30-35 silver by the end of the year.

DRS112 · 03-14-2008, 12:10 PM

Quote:

Originally Posted by VKMHVM2

I am predicting $1200-$1250 gold and $30-35 silver by the end of the year.

can't complain about a 20% return.

kblair7 · 03-14-2008, 01:22 PM

Quote:

Originally Posted by VKMHVM2

I am predicting $1200-$1250 gold and $30-35 silver by the end of the year.

I don't know that seems a little high...what are you basing your speculation on? I'm just asking cause I don't trade on the COMEX, but I know that active purchase on long term contracts has caused a slight rise +-3, and your predicting a what...5%-7% increase over X period? It is probably the fear of inflation which has prompted the move back to gold, its interesting because copper is high also--but that has more to do with geography than anything else I believe.

My heart could not take trading in COMEX, I would end up on respirator.

VKMHVM2 · 03-14-2008, 02:00 PM

Quote:

Originally Posted by kblair7

I don't know that seems a little high...what are you basing your speculation on?

The threat of military action against Iran and the continued collapse of the dollar.

03-14-2008, 11:37 AM	#4 (permalink)
DRS112 Administrator Join Date: Aug 2007 Posts: 5,368 My Mood: Thanks: 48 Thanked 66 Times in 48 Posts	Well...if you don't mind I'll move this thread.
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