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alstry (36.22)

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October 08, 2009 – Comments (14)

To give you a different perspective than my own and somewhat of an institutional insider's view..... I spent some time with a Mutual Fund manager who manages a Growth Fund of a major well known brand.  His perspective on the world is very different than mine and I thought I would summarize simply to give an altnernative view.  He is fairly optimistic about the current Fed policies and is focusing on Large International Companies with strong brand names and solid growth prospects....companies like Phillip Morris.  He thinks the worst is behind us and although we may see some bumps.....things look generally favorable to him for the future.

Needless to say, I told him I thought he was cracked and it was my belief we are facing the most challenging economic times in our history....much more challenging than the issues that confronted America during The Great Depression.  I expressed my concerns about the quality of accounting of public companies, HFT, collusion between the ratings agencies and Wall Street, Credit Default Swaps, evaporating revenues and tax receipts, rising unemployment and massive bankruptcies ahead.

Basically I told him that America is shutting down and it should not be too long before much of America resembles Detroit.

So there you have it, a really successful guy who sees green shoots and a Fool who thinks we are simply shooting blanks.  I think the evidence far favors the Fool.

PERU, Ind. -- A company that makes sensors for the steel industry plans to close a manufacturing plant in northern Indiana by the end of this year, a move that will eliminate nearly 80 jobs.

Heraeus Electro-Nite Co. has notified employees at the Peru plant of the shutdown, saying it was unavoidable because of decreased demand for its devices that monitor and control molten metal processes.

http://www.forbes.com/feeds/ap/2009/10/08/business-financial-impact-us-peru-plant-closing-indiana_6981447.html

Windstream said today it will lay off 280 to 290 employees, or nearly 60 percent, of D&E's 500 employees across central and eastern Pennsylvania.

Most of those cuts will occur in Lancaster County, where D&E has its biggest concentration of workers.

http://articles.lancasteronline.com/local/4/243197

Retailer Barnes and Noble is closing all 50 of its B Dalton book stores. Barnes and Noble Senior Vice President of Corporate Communications Mary Ellen Keating tells us that on Wednesday, managers of the B Daltons were told that their stores would be phased out by the end January.

http://www.wsjm.com/Orchards-Mall-B-Dalton-Store-Closing/5398049

Mass. facing $600M budget gap; may force more cuts Boston Globe - 9 hours ago Budget Cuts Harm Public Safety, Unions Say TMJ4 Milwaukee - 2 hours ago Milwaukee police and firefighters to rally against city budget cuts

From Alstry's perspective....America is shutting down and unless we restructure debt......we will continue to see our Economy deteriorate until much of America will long for the day where it could resemble present day Detroit.

It ain't complicated...the banks are cutting off credit to America.......and America is dependent on credit to function......now that government is the only one really borrowing.......just wait until credit is cut off to government.............that will be the Ultimate Zombulation.

14 Comments – Post Your Own

#1) On October 08, 2009 at 9:18 PM, Rebkong1 (< 20) wrote:

come on alstry unless this guy is working for a hedge fund..he is a long only guy..he lively hood and everything he knows is trained to look for the 'green shoots"..

 

if you had interviewed a hedge fund guy i am sure  you would be getting a different perspective or at least you would have a better shot at it considering he isn't restricted or trained to see what his mind wants him too

 

emotion can make the mind create and see stories (green shoots) that just aren't there  

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#2) On October 08, 2009 at 9:39 PM, dickseacup (66.93) wrote:

emotion can make the mind create and see stories (green shoots) that just aren't there 

Interestingly enough, it can also make the mind ignore stories (facts) that are.

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#3) On October 08, 2009 at 9:46 PM, alstry (36.22) wrote:

Just trying to give a Green Shoots perspective from someone managing some real money...by anyone's standards.

But the fact that practically every segment of the economy is seeing MASSIVE contraction simply makes such a perspective implausible.

Health Care, Government, Autos, Housing, Manufacturing, Technology, Travel, Commercial Real Estate....all contracting at the same time.

The position I am in now is really a pretty stange one....it is not that I see things getting worse.....I see revolutionary change ahead.  Changes more convulsive than any most Americans have seen in generations.

How it will play out is uncertain....but we are definitely heading in that direction with a velocity that simply can't be stopped at this point.

The crazy part is most of the evidence is right in front of our faces....yet few are willing to accept the condition and cause creating the change.

Let's hope cooler heads prevail and this change is not accompanied by violence.....but one thing is for sure....the change will be incredible.

 

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#4) On October 08, 2009 at 9:52 PM, Rebkong1 (< 20) wrote:

change will be "incredible" for sure...

 

alstry im a very civil person indeed...but at some point you have to wonder what it will take to rid the US of the bureaucracy of politicians that walk around washington and the puppet masters that control them...something tells me this wont be an amicable process  

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#5) On October 08, 2009 at 10:02 PM, AvianFlu (35.18) wrote:

alstry:

 And now you know why 80% of fund managers can't perform as well as the SP500 average.

On another topic, those who lived through the Weimar hyperinflation say that everything was fine, then the onset was so rapid there was no time to react. I can picture that.

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#6) On October 08, 2009 at 10:13 PM, alstry (36.22) wrote:

The primary issue is how do you tell Americans that America is insolvent???

By counterfeiting currency.....the Fed is engaging in unprecedented bahavior to conceal a condition.  As Buffett has alluded, the cure can be much worse than the disease.

There are a number of legal issues, which is probably outside the scope of these boards, which create some very interesting international law questions.

What should concern all is the FED is outright lying and making representions that are not only false...but lead the listener to erroneous conclusions.  At issue now is whether the FED is looking out for the citizens of the United States or some other party.

You think Bernanke ever believed sub prime was contained???

You think he believes the recession is over with revenues and tax receipts evaporating and job losses and bankruptcies skyrocketing?????

Whenever you are the one being lied to.....you should always be concerned what is motivating the individual to lie.......and what the liar will do to exculpate himself.

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#7) On October 08, 2009 at 10:39 PM, jesusfreakinco (29.08) wrote:

Al,

I am not a lawyer, but it doesn't take a rocket scientest (or a laywer in this case) to see the rule of law both domestically and internationally being re-written before our eyes.

Bankruptcy law in GM and Chrysler cases.

International law (if it exists in this area...) as China breaks their derivative contracts.

One thing the US stood for in the past 200+ years (up until recently) was for the rule of law.  Now... I am not sure what we have.  Sure, people claim miliary superiority, but for how much longer and based on what budget?

Good post and good thread.  I, too, pray that things will devolve in an orderly fashion, but I fear that things are going to get out of control soon.

JFC

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#8) On October 08, 2009 at 10:59 PM, ReadEmAnWeep (71.26) wrote:

Nice article. Good to see more that one dimension.

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#9) On October 08, 2009 at 10:59 PM, KamranatUCLA (29.57) wrote:

AL,

with all your posts I was surprised that you are still not the number 1 blogger in terms of quantity. You need to up your game my man.

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#10) On October 08, 2009 at 11:28 PM, booyahh (< 20) wrote:

 jesusfreakinco: 

"One thing the US stood for in the past 200+ years (up until recently) was for the rule of law"

Like when Andrew Jackson abolished  our Second Bank of the United States ? It was today's equivalent of the Federal Reserve.

Or when Abraham Lincoln placed the Chief Justice of the Supreme Court under house arrest during the Civil War?

Or when FDR took the country off the gold standard and Congress enacted legislation nullifying clauses in private contracts stipulating payment in gold over the heated opposition of the nation’s wealthy?

We're doing quite fine now, compared to all that !!!

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#11) On October 09, 2009 at 12:00 AM, kirkydu (93.86) wrote:

Al, I love ya, butt we have to remember to seperate the markets from the economy, and to specify time frames.  I too have had the opportunity to talk with some fund managers recently, and you are right, they are too optimistic on markets, but I think they're long range view of the economy is on track.

So, while I agree we screwed the pooch from 2002-06, it won't sink the country.  I do think we'll retest stock market lows sometime soon, and I think it'll be 3-7 years before we get sustained growth in employment- which will drive everything else.  But funny thing is, with all this unemployment, we have a golden opportunity to move into the type of work and jobs that will carry us for generations.  I believe we will make the right choices, and I for that reason, the medium and long term make me able to ignore and profit from the crummy short run.

Now, anybody who knows me, knows I've been bearish since late 1998 when the CNBC clowns laughed Jim Rogers off the set when he said the dot com boom was getting long in the tooth before he left for his trip around the world.  For the first time since then, I am seeing light at the end of the tunnel.  I'm holding a lot of cashes, and a selective short or two is about to be put on, but I'm feeling like I will be able to make some really good investments for the long run really soon.

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#12) On October 09, 2009 at 12:07 AM, Rebkong1 (< 20) wrote:

booyah you will rot in hell

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#13) On October 09, 2009 at 12:13 AM, Starfirenv (< 20) wrote:

Agreed # 9, you definately need to up your game. MOAO has bacome BOAJ (But of all jokes.) You're not a lawer, didn't go to school in England, don't know shit about war.  Granted, you are the master of dark snippets and nothing more. Quit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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#14) On October 09, 2009 at 1:06 PM, jesusfreakinco (29.08) wrote:

booyahh

Good point.  Rule of law has been broken many times in the past.  It doesn't excuse what is happening now.

JFC

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