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The Big Interview with David Rosenberg

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August 14, 2010 – Comments (17)

This is a very good interview. I am a big fan of Rosenberg. He is bearish on equities, but he is not bearish on everything. He has a very interesting take on bonds, but in particular high-quality corportate bonds in this environment. Good interview that is worth 20 minutes of your time

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The Big Interview with David Rosenberg 8/13/2010 9:29:12 AM

In an interview with WSJ's Kelly Evans, Gluskin Sheff's Chief Economist David Rosenberg warned that the chances of a double-dip recession are greater than 50-50 and that the recession may not have ended last year at all. He also called for the cutting of corporate taxes to spur job growth.

WATCH VIDEO HERE IF IT DOESN'T SHOW UP BELOW

17 Comments – Post Your Own

#1) On August 14, 2010 at 3:33 PM, alstry (35.21) wrote:

Does it make him more right if he is not bearish on "everything?"

Doesn't he work for brokerage firm?

Nevertheless, he is by far the most credible economist in the mainstream right now....

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#2) On August 14, 2010 at 4:35 PM, binve (< 20) wrote:

alstry ,

>>Nevertheless, he is by far the most credible economist in the mainstream right now.

Agreed..

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#3) On August 14, 2010 at 5:13 PM, goalie37 (94.39) wrote:

Kelly Evans is hot.

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#4) On August 14, 2010 at 6:15 PM, fransgeraedts (99.94) wrote:

Dear Binve,

very interesting interview.

A couple of thoughts.

About the double dip. I think we had a very rapid and very steep  inventory rebound  -because business cut very very deep during the financial crisis. Two reasons: the immens uncertainty and the fact that modern management techniques make it possible to cut quickly and deeply. So rosenbergs point about the bounce up being only inventory + stimulus seems right on the money to me.

What i maybe like most is his "canadian" way of arguing. With that i mean that he argues in a way that makes a consensus possible. He says when he does not know what will happen. He points out where he is uncertain, but leans in a particular direction. He always begins with explaining where he agrees with other economic thinkers before he goes and describes the differences of opinion. He is wary of "unwarranted pessimism" and "unwarranted distrust" and outright dismissive of the "lets head for the hills" type of bearish mindset. 

He is focused on what i believe to be the right question: how to prevent a depression.

He is very realistic in his appraisal of the state of the economy. I agree with him that a double dip is very likely.

So what should be done? to prevent the double dip in turning into a depression?

Yes i agree. In the US the focus should be jobcreation. But how to do that is the important question. And there i do disagree with him. But like him i think nobody is in the possesion of certainty about the right answer. So in the spirit of that inquiry i would say:

I predict that congress will let the Bushtaxcuts expire. I think that is very good. I also think that the negative effects on the economy will be minimal. His qualms in that regard are unnecessary.

His idea of lowering corporate tax is wrong. For three reasons. 1. It would raise the deficit further or would force large jobcuts of public workers. 2. There is a very big risk that it would only raise the profits of the corporations without leading to any jobcreation. 3. The move is structurally in the wrong direction: tax levels need to go up in the US.

Much more interesting is his idea of lowering taxes on labor for small businesses. That i think would be a very good step in the right direction.

But such a step should be fiscally neutral. That is the taxrevenue lost there should be made up elsewhere. Even better would be if we can find a way to make a small start with raising the taxlevel overall in such a way that it is jobgrowth positive and reduces the budget deficit.

I would suggest that taxing the rich and taxing carbon and taxing financial markets should be the way to do that.

(The rich) The expiration of the bushtaxcuts is a first step. The creation of a more redistributive taxsystem should be next. (Carbon) By taxing carbon we can do away with the fraud that is immediately connected to any carboncap. We stimulate the development of carbonfree energy. (Financial markets) Taxing financial transactions would propably be a very good way to disarm the financial system across the board. Taxing capital gains more and in the right way would stimulate longer term investment and saving.

We should also start a program of public investment. In that way we could take advantage of the low interest rates. It should be financed with cutting fat (and pork, grin) within the governement expenditures.

But the most important thought i take from this interview is that we have to begin to build a new consensus around a new economic policy. Without that it will be very difficult to prevent a depression.

fransgeraedts 

 

 

 

  

 

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#5) On August 14, 2010 at 7:33 PM, binve (< 20) wrote:

goalie37 ,

Indeed :)

fransgeraedts ,

Hey man! Great comments!! I agree with what you wrote almost completely, and will add a few thoughts.

>> So rosenbergs point about the bounce up being only inventory + stimulus seems right on the money to me.

Me too. A lot of pundits / economists try to frame it in the way Kelly did "if you take ex-[whatever], then this [whatever component] actually looks healthy". And that is bogus. Rosenbergs holistic view is right on, and if you agree that it is right on, then you ask why? Why are real final sales growth only about 1%? Which leads you to question the sustainability of the inventory rebuild / final sales growth cycle, i.e. there is no new cycle. That this "recovery" really is a 'blip'.

>>What i maybe like most is his "canadian" way of arguing. With that i mean that he argues in a way that makes a consensus possible. ...He is wary of "unwarranted pessimism" and "unwarranted distrust" and outright dismissive of the "lets head for the hills" type of bearish mindset.

I totally agree, I find this viewpoint very refreshing and constructive. I try to be constructive in some of my posts, such as this one http://caps.fool.com/Blogs/why-i-hold-gold-why-i-am-a/402614, but I am certainly not always successful in accomplishing that in all of my posts :(. But I always appreciate reading somebody of this mindset.

>>So what should be done? to prevent the double dip in turning into a depression?

Completely agreed. Much of my thesis is built around the fact that there is very littel political will to take the necessary actions to prevent this from occuring. In fact, there is so much denial that it is even an option. So my viewpoint is that there is the risk of an impending depression until I see policy specifically pointed at sustainable economic growth.

I don't want to be bearish. I don't want a depression. I *hate* having the macro view that I do. But if I consider macro and fundamentals, and I weigh risk/reward, that is the way the scale tips IMO.

But like I have written many times, even if a "more than double dip" comes to pass and we get another stock market crash, it will not be the end of the world. And no matter what happens in the next 5-ish years, I will remain long term optimistic. Here is an example of what I mean: from http://caps.fool.com/Blogs/america-still-kicking-some-ass/420391

I know this might sound surprising, given my bearish stance on the economy right now, but I am hugely optimistic long term. Americans have tons of drive, determination, ambition, innovation, etc. I think the last few years we collectively felt like it was time to "cash in" on previous decades of hard work, coupled with horrible economic and monetary policies that encouraged that mindset. A public and private debt boom creating huge asset bubbles that are still deflating. So when I say I am bearish on the 'economy' it is not the real economy that I am bearish on (goods producing and manufacturing), it is this current economy that is consumer spending driven and financially top heavy. We have some hugely unhealthy economic activity to clear, which will likely take a few more years. But after we do, I will be the biggest bull that you have ever seen. Because even now, I am hugely bullish on America's long term perspectives, because of all the attributes I listed at the beginning of the comment. Thanks for the post man!.

>>Much more interesting is his idea of lowering taxes on labor for small businesses. That i think would be a very good step in the right direction. But such a step should be fiscally neutral. That is the taxrevenue lost there should be made up elsewhere. Even better would be if we can find a way to make a small start with raising the taxlevel overall in such a way that it is jobgrowth positive and reduces the budget deficit.

Completely agreed with these points!! In fact, like I pointed out here: http://caps.fool.com/Blogs/why-i-hold-gold-why-i-am-a/402614

The current trend of piling debt on top of debt is unsustainable: Debt Saturation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=357428. And neo-economists and politicians have to get their collective heads out of their collective assess and not allow a vampire industry (financials) hijack the real economy. But since that won't happen willingly, then the market will force a crisis that will fundamentally change how we view politics and the economy. Crony capitalism will go away. Good laws like Glass-Steagall will become reinstated. Too big to fail will be abolished. Grass roots companies will grow like a new forest. The Mittelstand companies of Germany (small/medium firms, mostly family owned) is exactly the economic model that most of the western world should be following, and I believe will in the future.

The Mittelstand bussiness environment in Germany is exactly the type of economic behavior we should be encouraging right now, and fiscal policy should be shifted away immeditately from Krugman-esque scatter shot "aggregate demand driving" (becuase you know our economy is just one big aggregate box and you need to push only one button to fill that box) stimulus, and focus on "creating the environment where small business can grow" as Rosenberg puts it.

>>(The rich) The expiration of the bushtaxcuts is a first step. The creation of a more redistributive taxsystem should be next.

Agreed.

>>(Carbon) By taxing carbon we can do away with the fraud that is immediately connected to any carboncap. We stimulate the development of carbonfree energy.

I am not so sure. First, I am a huge proponent of alternative and renewable energy just on principle. But I have very mixed feelings on the whole carbon cap issue. I wrote some thoughts here if you are interested: http://caps.fool.com/Blogs/my-4th-grade-level-science/307707#comment308414. Either way, I think this would be such a politically charged action, and thus subject to so much debate and politicizing that the tax would be mutated and derailed from the larger good it would serve in offsetting taxes for small/med businessess

>>(Financial markets) Taxing financial transactions would propably be a very good way to disarm the financial system across the board. Taxing capital gains more and in the right way would stimulate longer term investment and saving.

AMEN!!! I completely agree. Not only are record profits the problem to begin with: http://www.debtdeflation.com/blogs/2010/08/11/bank-profits-a-sign-of-economic-sickness-not-health/, but they are largely fradulent as well: http://caps.fool.com/Blogs/financial-carcinoma-/322718

>> But the most important thought i take from this interview is that we have to begin to build a new consensus around a new economic policy. Without that it will be very difficult to prevent a depression.

Completely agreed. That is my hope. But my fear (and the reason why I talk about macro risk so much) is that it will not happen in time to avert the next crisis.

Thanks for the great comment!!

..

..

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#6) On August 14, 2010 at 8:47 PM, Starfirenv (< 20) wrote:

Binve- I would be very interested to hear your thoughts on the Hindenburg omen. Might make a pretty good post- knowing your grasp of T/A, E/W and charts (and my lack of). It's my understanding that all indicators were met on 8/12 and the last time was mid '08(?) I think. Thanks for another good one. Usual +1. Regards

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#7) On August 14, 2010 at 9:10 PM, binve (< 20) wrote:

Starfirenv ,

Actually my friend Columbia has been tracking the status of the omen for months. He has by far the best grasp on it and the best charts tracking it. Here is his most recent post on it: http://ewtrendsandcharts.blogspot.com/2010/08/hindenburg-omen-was-triggered-today.html

The quick answer is that the Omen tracks how unblanced and how fractured the market it is. When the market is unbalanced as this one is (and they way they all are at major tops, like 2007/2008 which had a confirmed omen), then we have a large number of issues at both 52 week highs and lows, we have volatility, and we have sharp moves and classic indicators moving in separate directions.

Thanks!..

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#8) On August 15, 2010 at 12:30 AM, DarthMaul09 (29.95) wrote:

AUGUST 14, 2010

'Hindenburg Omen' Flashes

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#9) On August 15, 2010 at 12:42 AM, DarthMaul09 (29.95) wrote:

AUGUST 14, 2010

'Hindenburg Omen' Flashes

Technical Gauge and Its Creator Sense Stock Gloom; 'Good Conspiracy Theories'?

By STEVEN RUSSOLILLO And TOMI KILGORE

 

Forget about Friday the 13th. Many on Wall Street took to whispering about an even scarier phenomenon—the "Hindenburg Omen."

The Omen, named after the famous German airship in 1937 that crashed in Lakehurst, N.J., is a technical indicator that foreshadows not just a bear market but a stock-market crash. Its creator, a blind mathematician named Jim Miekka, said his indicator is now predicting a market meltdown in September.

The Omen's Criteria

All criteria must be met for a confirmed occurrence.

The daily number of new NYSE 52-week highs and the daily number of new 52-week lows must both be greater than 2.5% of the total issues traded that day.The smaller of the 52-week highs and lows must be greater than or equal to 79 (or 2.5% of 3,168 issues). The NYSE's 10-week moving average must be rising.The McClellan Oscillator, a measure of market fluctuations, must be negative.New 52-week highs can't be more than twice the new 52-week lows. (However, it is acceptable for the new 52-week lows to be more than double the 52-week highs.)

Wall Street has been abuzz about whether the Hindenburg Omen will come to bear, with some traders cautioning clients about the indicator and blogs pondering all the doom and gloom. But Andrew Brenner, managing director at Guggenheim Securities, told his clients: "Personally, it sounds like [people] are starting their weekend drinking early."

Technical indicators, with names like "The Death Cross" and "The Bearish Abandoned Baby" have been attracting mainstream attention in recent months. Amid an increasingly volatile market, investors have been searching for any clues about stocks' direction, especially this past week where major indexes fell more than 3%.

"We always love good conspiracy theories," said Joseph Battipaglia, chief market strategist of the private-client group at Stifel Nicolaus. But he noted that market watchers sometimes make too much of what could be mere coincidences. "I for one dismiss all these things because they usually erupt most numerously during bear markets."

Mr. Miekka came up with the Omen in 1995 as a way to predict big market downturns, developing a formula that parses data like 52-week stock levels and the moving averages of the New York Stock Exchange. He said the Hindenburg Omen's name was coined by a fellow market technician, Kennedy Gammage, when they found out the name "Titanic" already had been taken.

The confluence of data used by the Omen was officially tripped this week. There were 92 companies that hit new 52-week highs on Thursday, or 2.9% of all companies traded on the New York Stock Exchange. There were also 81 new lows, or 2.6% of the total. Each number must exceed 2.5% for the Omen to occur, according to Mr. Miekka.

Other criteria include a rising 10-week moving average for NYSE and a negative McClellan Oscillator, a technical indicator that measures market fluctuations. Mr. Miekka said the appearance of one signal is usually an indication of a market top, but the Omen becomes more accurate when there are two or more close together.

The Omen was behind every market crash since 1987, but also has occurred many other times without an ensuing significant downturn. Market analysts said only about 25% of Omen appearances have led to stock-market declines that can be considered crashes.

"The Hindenburg Omen does show some deteriorating internals, which signals some major concerns," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "But it isn't a reason to move to 100% in cash. We're taking a wait-and-see approach, but considering its recent history, we're considering it more than other indicators."

Mr. Miekka, who writes a Wall Street newsletter called "Sudbury Bull & Bear Report" out of his homes in Maine and Florida, wasn't even aware that his own Hindenburg Omen indicator was activated. The 50-year-old former physics teacher, who is an avid target shooter, said he was "taken by surprise" after he plugged the data into his model.

He didn't say whether it is a good time to bail out of the market, but he isn't exactly in a bullish mood when it comes to stocks. "I'll be dancing close to the door," he said.

—Donna Kardos Yesalavich contributed to this article.

The above link didn't work very well and when it copied it over the fonts changed.

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#10) On August 15, 2010 at 3:24 AM, ATH001 (< 20) wrote:

+1 Rec

+1 Rec for very good comment by Frans

 Thanks

L

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#11) On August 15, 2010 at 6:49 AM, fransgeraedts (99.94) wrote:

Dear Binve,

if i may three points (one larger, two shorter) to continue our very fruitfull inquiry.

On the carbon-tax. This is a complicated (understating the obvious) question. With I believe a simple solution.(It happens! grin).

Global warming. I agree with you binve that we do not know any definite answer to the question wether or not human CO2 output is causing global warming. I also agree that instead of less we should invest more in research into the question. 

I also agree with many participants in the public debate (from all sides) that there is reason for scepticism regarding several of the positions taken by politicians and scientists and publicists. Let me name a view of those reasons. (a) For a long time (1950's) now there has been a tendency for public debate in the west to produce doomscenario's of the future. There seems to be something emotionally fullfilling about them for us. That makes me always a bit apprehensive when a new doom is prophesied. (b) I do not believe that science in and of itself is immune to groupthink, hypes, the lure of money or status. So it is absolutely possible that around global warming that sort of mechanisms play a role and i think they do. (c) On the other side of the debate (denial of GW) i see clear evidence of lobbying on behalf of specific corporate interests. That reminds me of, for example, the concerted effort in the past to deny that smoking is unhealthy. (d) I see also evidence of anti-government, anti-science even anti-society sentiments interwoven with the denial. (e) There are also clear indications that pure and simple egotism plays a role for some on the denial side.

But -and this is the crux for me: apart from all that there are more then enough scientists, publicists and politicians who are trying to get a real and honest grip on the situqation. And of those a very very large majority seem to think that there is man made CO2 related global warming. Even though they readily agree that they cannot be 100% sure ..yet.   The problem being not just that we need more research and understanding but also that we ideally would need a few planets and a couple of hundred years to experiment with. This is one of those questions where we can only be certain in retrospect.

Therefore i am with Johan Hari of The Independent (newspaper out of London) on this one: we cannot take the risk.

However, and we are in luck here, people can disagree with me on the need to act on global warming and nevertheless they should agree with me on the need for a carbon tax. That is why this very complex question has nevertheless  a simple answer. (I hope)

A quick shorthand of the reasons why.

(1) We need to raise taxes to have any chance to reduce the deficits, but we need to do it in a way that does the least harm to the economy -or even better stimulates growth and jobcreation. I think a carbon tax will do that. (2) A carbon tax would shift energy production away from oil and coal (by the way of gas) towards nuclear and renewables. In doing so we can hope to preempt the enormous spike in energycosts that will inevitably follow if we continue on our carbon fuelled course. (3)Preventing those spikes in energycosts would mean at least preventing very grave imbalances in the world-economy. But sadly enough it probably also will mean preventing social unrest, a regress away from democracy in the carbon producing countries, and in the worst case wars. (4) A shift in energyproduction away from carbon would also mean freeing those finite resources (oil gas and coal) for the production of chemicals.It is maddness that we simply burn them!

On the political possibilities. I agree with you binve that a carbon-tax at the moment seems unlikely to pass congress in any shape or form. And i also agree that it would not be wise to make other tax-measures that would help therefore dependent on it. However i do think that it is very important that in thinking about the best taxpackage we shoudl give it a very prominent place. Not only because i think it is a vital part but aslso because i think that the inevitable deepening of the economic crisis creates an opportunity to break out of the traditional mold of policies  -and we should not miss that! 

On the need of a new consensus for a new economic policy. I believe we very slowly are beginning to build such a consensus here on Caps. Lets be a grassroot.

fransgeraedts

 

  

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#12) On August 15, 2010 at 4:34 PM, binve (< 20) wrote:

DarthMaul09,

Thanks for the link!

ATH001 ,

Thanks!

fransgeraedts,

More great comments! Believe it or not, you and I have very similar big picture thoughts on this matter. I think we differ slightly in what I think is realistically achievable in a given timeframe. So let me add a few ideas and comments.

>>Global warming. I agree with you binve that we do not know any definite answer to the question wether or not human CO2 output is causing global warming. I also agree that instead of less we should invest more in research into the question.

Exactly. It sounds like you read my comment on ChrisGraleys blog. There are some things that government takes on and pays through spending that I am 100% okay with. That I find that I am absolutely okay to subsidize with my tax dollars. These are overarching pure science endeavors. The Hubble Space Telescope and a number of NASA missions (I am in the Aerospace industry, so this might be a little self-serving :), but I have worked on as many commerical satellites as I have government satellites), the LHC and a number of critical physics experiments and observatories that have no immediate practical use but have far-reaching scientific importance, and I think pure science on *understanding our atmosphere*. Notice I did not say "climate change". That is because this term now has all kinds of political connotations and agendas associated with it. The fact of the matter is, the atmosphere is a very complicated system and we understand maybe 50% of the physics involved. If we knew everything, the we wouldn't have to send up experiments like I talked about in Chris's post. It is like geology. Our understanding of subduction and plate tectonics is very recent, maybe only 50 years old. We understand more about semiconductors than we do about the composition and behavior of the Earth's crust. And the applications are immediately useful (earthquake prediction and detection for one).

I want government to do it's job, or said another way, to do what I think its most useful function is: to subsidize pure science endeavors with far-reaching impacts, even if they are not immediately practical, and to get out of managing science for political goals, like with the AGW debate.

>>Therefore i am with Johan Hari of The Independent (newspaper out of London) on this one: we cannot take the risk.

This is a statement that certainly does resonate with me. And so I do not disagree on principle, but as I point out above, we as a world are still embarking on policies with incomplete scientific data. The engineer in me just really abhors this concept. It is like designing a structure without understanding the load environment. What are the requirements? What is the margin of safety? What is the fatigue life? etc. Without good models of the atmosphere, the best we can hope for is "going in the right direction". Maybe that's good (and my gut feels that way), but as someone with a scientific background, that is certainly not 'good enough'.

So I am definitely in favor of spending money on pure science to continue to come up with a better atmospheric model. I am not okay with the carbon tax / carbon cap / tax credit proposals that are out there.

And here is why I think things are getting all mixed up:

>>(1) We need to raise taxes to have any chance to reduce the deficits, but we need to do it in a way that does the least harm to the economy -or even better stimulates growth and jobcreation. I think a carbon tax will do that. (2) A carbon tax would shift energy production away from oil and coal (by the way of gas) towards nuclear and renewables. In doing so we can hope to preempt the enormous spike in energycosts that will inevitably follow if we continue on our carbon fuelled course. (3)Preventing those spikes in energycosts would mean at least preventing very grave imbalances in the world-economy. But sadly enough it probably also will mean preventing social unrest, a regress away from democracy in the carbon producing countries, and in the worst case wars. (4) A shift in energyproduction away from carbon would also mean freeing those finite resources (oil gas and coal) for the production of chemicals.It is maddness that we simply burn them!

While it seems on its face that we have large budget defecits, we could tax carbon and create a new industry to get us off foreign oil, it just seems like a wham-bam-thank-you-ma'am approach. Energy policy is extremely convoluted and subject to political derailment.

If you have seen this clip before, you know exactly what I mean:

(click here if it doesn't work: http://www.thedailyshow.com/watch/wed-june-16-2010/an-energy-independent-future).

It seems straightforward in theory, and is so hard to execute in practice, in this political environment.

So that's why I think the trying to fix the economy with overarching energy policy will be a disaster.

Instead I woud focus on our previous idea, implement a tax on financial instituions (and not some BS "windfall profits" tax which can be fudged around, but a a serious tax that will curtail financial activity and increase revenue to fund this new initiative) to cut the payroll tax and corportate tax rates on small businesses. I think a massive simplification of the tax code would a good idea while we are at it.

And if carbon taxes do get passed, then I would like to see them in a much more targeted and limited form, and the revenue to not go to the general fund but specifically to pure atmospheric science and research into alternative energy. I acutally wrote a post with similar ideas (sort of ) a couple of years ago: http://caps.fool.com/Blogs/alternative-energy-tech-for/73292

I want to see less politicizing of scientific endeavors. .... but since we are dealing with politicians, I am not holding my breath :(

>>On the need of a new consensus for a new economic policy. I believe we very slowly are beginning to build such a consensus here on Caps. Lets be a grassroot.

Amen! I think this is a great discussion! Thanks!!..

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#13) On August 15, 2010 at 7:53 PM, Starfirenv (< 20) wrote:

Darth- many thanks, saw that stuff. But thank you.
Binve- I was able to understand the basis, but I was weak in posing my question, which was more towards- relative to the other indicators, i.e. EW/TA/moving avgs, stochastics, bands, etc. what value value would you assign as an indicator. Many thanks for the link. Also, I did not intend to take away from the value of your post or hi-jack anything (I like this guy almost as much as Bill Black- did you see him on Celente?). Would you rather use your excellent site http://marketthoughtsandanalysis.blogspot.com/
for such silliness?
Fellow Fools, ck it out!!!

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#14) On August 15, 2010 at 11:37 PM, binve (< 20) wrote:

Starfirenv ,

>>I was able to understand the basis, but I was weak in posing my question, which was more towards- relative to the other indicators, i.e. EW/TA/moving avgs, stochastics, bands, etc. what value value would you assign as an indicator.

Ahh, gotcha. Well right now it is a singular occurence, and as such it is unconfirmed (more that one occurence in a 30 day period). So historically an unconfirmed omen doesn't mean much, whereas a confirmed omen has a 100% (I believe, I am not aware of exceptions) historical rate of predicting a large negative down event in equities in the range of 1 day to 4 months after the confirmation. And by negative I mean at least 15-20% sharp move.

So that is on the omen itself. But beyond that, I wrote this post last week listing some bearish observations before the omen: http://marketthoughtsandanalysis.blogspot.com/2010/08/avast.html. I think the market looks very toppy here and when combined with this observation: http://caps.fool.com/Blogs/risky-business/432189 and these leading macro observations: http://caps.fool.com/Blogs/john-hussman-recession/413455, http://caps.fool.com/Blogs/is-officer-1bdi-losing-an-eye/417202, http://caps.fool.com/Blogs/rear-view-looks-fine-but-the/419517, http://caps.fool.com/Blogs/what-is-the-consumer-metrics/427662, I am pretty immediately bearish.

In fact I reiterated on some of my top level bearish thoughts tonight: http://marketthoughtsandanalysis.blogspot.com/2010/08/where-we-are-long-count-and-some.html.

>> Also, I did not intend to take away from the value of your post or hi-jack anything

Not at all !!

>> (I like this guy almost as much as Bill Black- did you see him on Celente?).

I did. And as you know, I am a big fan of Bill Black too.

>> Would you rather use your excellent site http://marketthoughtsandanalysis.blogspot.com/
for such silliness?

Either place man! No worries, I am happy to talk about anything on either blog!

>> Fellow Fools, ck it out!!!

Thank you my friend!..

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#15) On August 15, 2010 at 11:51 PM, PatryC (< 20) wrote:

My impression from the David Rosenberg interview was that he began to touch on the jobs problem, then veered away and spoke of tax cuts as a stimulus. This seems to be common among policy makers as well.  They are not seriously addressing the problem of how to create jobs. So many economists and policy makers in government continually speak of tax cuts to create jobs, but I have never seen a business create jobs where they are not trying to meet a demand.  They must have a reason to put more employees on the payroll, and they don't do this simply because they are getting a tax cut. I think this is evidenced by the large amount of cash companies are sitting on right now. 

 

I think what we need is a program much like the CETA (Comprehensive Employment and Training Act)  program in the mid 1970s where companies would get tax cuts only where they hired additional employees, or where the pay of additional employees was subsidized by the government. We also need an industrial policy which protects industrial activity we deem to be critical for us, which I think should include new energy development. 

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#16) On August 17, 2010 at 1:51 PM, outoffocus (23.66) wrote:

Good stuff. However where we disagree on is bonds.  I think domestic bonds and treasuries are in a huge bubble right now, thanks to historically low interest rates (and the horribly mistaken "AAA" rating on US treasuries).  If I were to recommend any kind of fixed income investment, it would probably be foreign bonds.

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#17) On August 17, 2010 at 2:02 PM, binve (< 20) wrote:

outoffocus ,

Totally agreed! I think soverign debt is a huge problem and even if some soverigns survive without defaulting, I doubt they will keep their AAA status. And some may say this is not a big deal, expect it is. Soverign debt is used as collateral in the OTC market, by far the biggest in the world, and if ratings are lowered then collateral need to be raised which is a huge vicous cycle.

Have you seen this post of mine? http://marketthoughtsandanalysis.blogspot.com/2010/08/i-will-assume.html

You have probably read the CR series, but if not, I highly recommend. Thanks!..

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