Comments on: Aftcasting Recession . . . http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 12:43:00 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Bruce in Tn http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126995 Bruce in Tn Tue, 18 Nov 2008 12:32:39 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126995 Leftback: If the Berkshire class A shares close below where the class B shares used to sell for, is that an inverted yield curve? http://www.cnbc.com/id/27775516 Berkshire Hathaway Shares ...just wonderin' Leftback:

If the Berkshire class A shares close below where the class B shares used to sell for, is that an inverted yield curve?

http://www.cnbc.com/id/27775516

Berkshire Hathaway Shares

…just wonderin’

]]> By: Bruce in Tn http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126994 Bruce in Tn Tue, 18 Nov 2008 12:19:58 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126994 Calculated Risk has a cute video this morning on where your money is going. He and Barry have some of the same twisted humor... Calculated Risk has a cute video this morning on where your money is going. He and Barry have some of the same twisted humor…

]]> By: kackermann http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126993 kackermann Tue, 18 Nov 2008 11:39:03 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126993 I got a kick out of all the serious conviction/belief after market close last Thursday that we had truly entered what was to be a months-long rally. So much faith in technical analysis, yet everyone seems to have forgot that many of the indicators have broken records. When something breaks a record, that means there are no comparables. If the sun doesn't rise tomorrow, there is no reason to say that it is certain to rise the next day based on the past performance of the sun. I got a kick out of all the serious conviction/belief after market close last Thursday that we had truly entered what was to be a months-long rally.

So much faith in technical analysis, yet everyone seems to have forgot that many of the indicators have broken records. When something breaks a record, that means there are no comparables.

If the sun doesn’t rise tomorrow, there is no reason to say that it is certain to rise the next day based on the past performance of the sun.

]]> By: kackermann http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126992 kackermann Tue, 18 Nov 2008 11:21:38 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126992 Aftcast. I like it. It's sort of like the postdictions that others applied to Nostredameaus' vague and vapid writings. Aftcast. I like it.

It’s sort of like the postdictions that others applied to Nostredameaus’ vague and vapid writings.

]]> By: guidepostings http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126979 guidepostings Tue, 18 Nov 2008 04:56:47 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126979 There is so much quantitative data on the market right now that it so overextended that it is almost useless to interpret it. Basically, most of it is saying the market is so oversold that we should rally, and should rally hard. But I have been following a few indexes and ratios as guideposts. Since this is arguably the greatest financial crisis ever, the banking sector is an excellent forward looking vehicle to guide us where we are heading. Big surprise, it doesn't look good. Today we took out the Philadelphia Banking Index's lows from early October and last July. I think this is a pretty big deal and pulls 800 into the crosshairs pretty quickly, maybe by the end of this week or at least the end of November. some shameless pointing, check out more: guidepostings.blogspot.com Dig a little deeper and you can see an interesting relative performance chart for the BKX and the S&P 500. In both instances, the BKX led the turn in the overall market by several months. Back in July of this year, the ratio bounced HARD off of the bottom established in the 1998-2003 bear market. Some traders made serious money picking that bounce. Assuming logic and geometry prevails (if you have any question about this market's geometry look no further than the 2 beautiful tops that the market carved out in 2000 and 2007 on the S&P - as much as the market feels random and volatile, there is a rhyme and rhythm to this beast): The fact that we took ourselves back down to the last bear market lows in this ratio puts the very real possibility that the 768 intraday low on the S&P in October of 2002 will be revisited in this waves decline. Slightly scarier, is the ratio's decline during this bear took out the intraday low from the previous by a substantial margin. Obviously, if those lows are taken out on a closing basis (especially on the weekly or monthly charts) this market will gain new and uncharted territory potential towards the downside. There is so much quantitative data on the market right now that it so overextended that it is almost useless to interpret it. Basically, most of it is saying the market is so oversold that we should rally, and should rally hard. But I have been following a few indexes and ratios as guideposts. Since this is arguably the greatest financial crisis ever, the banking sector is an excellent forward looking vehicle to guide us where we are heading. Big surprise, it doesn’t look good. Today we took out the Philadelphia Banking Index’s lows from early October and last July. I think this is a pretty big deal and pulls 800 into the crosshairs pretty quickly, maybe by the end of this week or at least the end of November.

some shameless pointing, check out more:
guidepostings.blogspot.com

Dig a little deeper and you can see an interesting relative performance chart for the BKX and the S&P 500. In both instances, the BKX led the turn in the overall market by several months. Back in July of this year, the ratio bounced HARD off of the bottom established in the 1998-2003 bear market. Some traders made serious money picking that bounce.

Assuming logic and geometry prevails (if you have any question about this market’s geometry look no further than the 2 beautiful tops that the market carved out in 2000 and 2007 on the S&P – as much as the market feels random and volatile, there is a rhyme and rhythm to this beast):

The fact that we took ourselves back down to the last bear market lows in this ratio puts the very real possibility that the 768 intraday low on the S&P in October of 2002 will be revisited in this waves decline. Slightly scarier, is the ratio’s decline during this bear took out the intraday low from the previous by a substantial margin. Obviously, if those lows are taken out on a closing basis (especially on the weekly or monthly charts) this market will gain new and uncharted territory potential towards the downside.

]]> By: advsys http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126973 advsys Tue, 18 Nov 2008 04:09:25 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126973 This is classic! Deny, deny, deny. Hoping that when you have to capitulate the worst will be past. I know exactly what is coming. All the Giddy know nothings will now tell everyone this is the optimal time to buy buy buy. Why?? Simple logic. A long recession is 16 months. Markets usually start to recover at least 6 months before the end of the recession. Ergo, since this recession started 9 months ago, simple math makes the next month the time to buy. Purposely, leave out any other facts or that your reasoning could be based on incorrect assumptions and non facts in evidence. This is classic!
Deny, deny, deny. Hoping that when you have to capitulate the worst will be past.

I know exactly what is coming. All the Giddy know nothings will now tell everyone this is the optimal time to buy buy buy.
Why?? Simple logic. A long recession is 16 months. Markets usually start to recover at least 6 months before the end of the recession. Ergo, since this recession started 9 months ago, simple math makes the next month the time to buy.

Purposely, leave out any other facts or that your reasoning could be based on incorrect assumptions and non facts in evidence.

]]> By: DL http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126971 DL Tue, 18 Nov 2008 03:59:08 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126971 Over at Mankiw’s website (http://gregmankiw.blogspot.com/) he says that Intrade has a bet on the probability of a DEPRESSION occurring in 2009 (defined as a cumulative decline in GDP of more than 10.0% over four consecutive quarters). Over at Mankiw’s website (http://gregmankiw.blogspot.com/) he says that Intrade has a bet on the probability of a DEPRESSION occurring in 2009 (defined as a cumulative decline in GDP of more than 10.0% over four consecutive quarters).

]]> By: JohnnyVee http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126965 JohnnyVee Tue, 18 Nov 2008 03:30:51 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126965 Re Winston's consumer perception: The babyboomers turn 61 in 2009. I don't know about you but my parents are in their late 70's and they don't buy anything anymore. They have nice cars and a nice house or two. They just don't consume anymore. The babyboomers, described as the pig in the python, will be consuming a lot less in their senior years like all the other generations. I think I am turning Japanesse...I think so. Re Winston’s consumer perception: The babyboomers turn 61 in 2009. I don’t know about you but my parents are in their late 70’s and they don’t buy anything anymore. They have nice cars and a nice house or two. They just don’t consume anymore. The babyboomers, described as the pig in the python, will be consuming a lot less in their senior years like all the other generations. I think I am turning Japanesse…I think so.

]]> By: ron32 http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126958 ron32 Tue, 18 Nov 2008 02:51:23 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126958 Zell: Yes Roubini has and is ahead of the curve, seem to understand the critical role consumer spending has on our GDP. Why it escape's the other 99% of the economic brain trust is a mystery! The lack of comments does reflect that the economy has jumped the recession creek sorta took the words and breath out of the bulls and bears for a bit. Zell: Yes Roubini has and is ahead of the curve, seem to understand the critical role consumer spending has on our GDP. Why it escape’s the other 99% of the economic brain trust is a mystery!
The lack of comments does reflect that the economy has jumped the recession creek sorta took the words and breath out of the bulls and bears for a bit.

]]> By: Bruce in Tn http://www.ritholtz.com/blog/2008/11/nabe-aftcasts-recession/comment-page-1/#comment-126957 Bruce in Tn Tue, 18 Nov 2008 02:44:35 +0000 http://www.ritholtz.com/blog/?p=9818#comment-126957 "Private consumption fell in the third quarter that ended in Septemberand economists think it will drop again in the current period and in the first quarter of 2009. It would mark the first time since quarterly statistics began in 1947 that consumption fell for three straight quarters. That is precisely what the U.S. government is trying to avoid. The Treasury wants to use some of its $700 billion rescue fund to guarantee consumer lending in the hope that doing so will get money flowing again." http://www.cnbc.com/id/27767317 Of course, this makes the government, in trying to reignite spending by the country as a whole, the enemy of the individual who is trying to pay off excess debt and years of overspending. “Private consumption fell in the third quarter that ended in Septemberand economists think it will drop again in the current period and in the first quarter of 2009. It would mark the first time since quarterly statistics began in 1947 that consumption fell for three straight quarters.

That is precisely what the U.S. government is trying to avoid. The Treasury wants to use some of its $700 billion rescue fund to guarantee consumer lending in the hope that doing so will get money flowing again.”

http://www.cnbc.com/id/27767317

Of course, this makes the government, in trying to reignite spending by the country as a whole, the enemy of the individual who is trying to pay off excess debt and years of overspending.

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