Comments on: Four Markers of an Economic Turnaround http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 22:27:20 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: TheReformedBroker http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163281 TheReformedBroker Sun, 19 Apr 2009 23:41:28 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163281 good point royrogers, but the problem is that the natural stress tests, combined with no uptick rule and free-for-all for naked shorts and hedge fund manipulators almost took us to game over im all for the market being "fair" with punishment of Citi and BAC, they were crap banks with bad management and dumb decisions, but I dont think BONY, JPM and US Bancorp shouldve been allowed to get whacked out just because the SEC was a toothless tiger about enforcing its own rules if that continued, we would have ALL failed the stress tests good point royrogers, but the problem is that the natural stress tests, combined with no uptick rule and free-for-all for naked shorts and hedge fund manipulators almost took us to game over

im all for the market being “fair” with punishment of Citi and BAC, they were crap banks with bad management and dumb decisions, but I dont think BONY, JPM and US Bancorp shouldve been allowed to get whacked out just because the SEC was a toothless tiger about enforcing its own rules

if that continued, we would have ALL failed the stress tests

]]> By: royrogers http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163270 royrogers Sun, 19 Apr 2009 22:49:20 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163270 TheReformedBroker Says: April 19th, 2009 at 11:41 am fyi…faber is ................................................. that said, why are we being kept from the stress test results? methinks the government likee the rally too much to show us the test scores… http://thereformedbroker.com/2009/04/19/stress-test-capitalism-without-competition/ The markets were stress testing the bank stocks last fall before the government stepped in. So why do the stress test now when you prevented the stress before ?? TheReformedBroker Says:
April 19th, 2009 at 11:41 am

fyi…faber is ………………………………………….
that said, why are we being kept from the stress test results? methinks the government likee the rally too much to show us the test scores…

http://thereformedbroker.com/2009/04/19/stress-test-capitalism-without-competition/

The markets were stress testing the bank stocks last fall before the government stepped in.
So why do the stress test now when you prevented the stress before ??

]]> By: danm http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163261 danm Sun, 19 Apr 2009 21:54:45 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163261 dead hobo Says: April 19th, 2009 at 11:43 am No, I expect to sell to a greater fool at a profit. I couldn’t care less about the employees. ----------------- Exactly. dead hobo Says:

April 19th, 2009 at 11:43 am
No, I expect to sell to a greater fool at a profit. I couldn’t care less about the employees.
—————–
Exactly.

]]> By: insaneclownposse http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163258 insaneclownposse Sun, 19 Apr 2009 20:45:21 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163258 Judging by past bear markets, there is little correlation between the end of a recession and the start of a new bull market. Go back to 2002 - the economy started pulling out of the recession by late 2001 yet it took almost another whole year before the stock market made the ultimate low. This go round is there any reason the market couldn't turn up well before the economy? Economists generally make for terrible stock market traders. I don't find Rosenberg's argument particularly compelling. Judging by past bear markets, there is little correlation between the end of a recession and the start of a new bull market. Go back to 2002 – the economy started pulling out of the recession by late 2001 yet it took almost another whole year before the stock market made the ultimate low. This go round is there any reason the market couldn’t turn up well before the economy?
Economists generally make for terrible stock market traders. I don’t find Rosenberg’s argument particularly compelling.

]]> By: Mannwich http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163257 Mannwich Sun, 19 Apr 2009 20:32:04 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163257 Many parallels to what's happening today in almost every facet of our culture (e.g. politics, corporations, Wall Street, etc.) can be drawn from this show. Everything everywhere seems so gamed by those in power for their own benefit. Great Moyers interview..... http://www.pbs.org/moyers/journal/04172009/watch.html Many parallels to what’s happening today in almost every facet of our culture (e.g. politics, corporations, Wall Street, etc.) can be drawn from this show. Everything everywhere seems so gamed by those in power for their own benefit. Great Moyers interview…..

http://www.pbs.org/moyers/journal/04172009/watch.html

]]> By: moneyneversleepsblog http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163255 moneyneversleepsblog Sun, 19 Apr 2009 18:36:40 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163255 There is a big difference between an economic turnaround and a stock market turnaround. The main issue right now with the rally is everyone's waiting for it to fail.. and that story usually plays out longer than most wish or expect. There are plenty of excuses and causes for concern but it has not broken the market yet. The real test of this rally is a legit pullback. Traders who have already been too quick to write this off as a bear market rally may also be quick to pile back into the shorts if we get a pullback that lasts longer than one day. If that happens, what if it is a just a pullback and not another trip to new lows? http://moneyneversleepsblog.blogspot.com/2009/04/week-ahead.html There is a big difference between an economic turnaround and a stock market turnaround. The main issue right now with the rally is everyone’s waiting for it to fail.. and that story usually plays out longer than most wish or expect. There are plenty of excuses and causes for concern but it has not broken the market yet. The real test of this rally is a legit pullback. Traders who have already been too quick to write this off as a bear market rally may also be quick to pile back into the shorts if we get a pullback that lasts longer than one day. If that happens, what if it is a just a pullback and not another trip to new lows?

http://moneyneversleepsblog.blogspot.com/2009/04/week-ahead.html

]]> By: techy http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163254 techy Sun, 19 Apr 2009 18:20:09 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163254 IMO investment markets are ponzi scheme played by OPM thats why so much swing(unless its a bull market...) when it starts going up nobody cares for the fundamentals...even the govbenmint likes it. my bullish argument would be: (which can last 6-8 months). 1. If somehow economic activity is restored even to 70% of past, markets are over sold compared to return from cash/safe investments, and of course who doest not like a roaring bull market....media, the white house, J6P...i can see them with wide smiles....when DOW goes up above 12k. 2. Long term(7-10 years) we are in deep shit because right now we are simply trying to inflate our way out, but i would not bet that it will not work in short term.(how hard is it for insolvent banks to become profitable when all the risk gets subsidized by gobenmint). 3. Govbenmint can print/borrow couple of trillions to start hiring big time to pick up slack from private...which can stop the current deflationary cycle.....and restart corporate hiring.....it may not last longer than couple of years since there is only so far you can cheat the savers. in other words, i am not going to bet my money saying....reflation will not work at all. because the chinese/exporters will be happy to fund more if we want to buy their stuff....its much easy for them to do that than go for socially good, local economy..which nobody in the world has been able to perfect yet. but my bear case will be: 1. huge inflation in commodities due to china moving out of dollar and into commodities. this itself will be the big factor to stop govbenmint from movging forward with its reflation game....which is the only factor IMO helping the recovery.....inflation will also kill whatever spending power the population has. if not for above...who cares if national debt goes upto 13 trillion from 10 trillion?? if dollar buying power is reduced upto 30% by printing...the debt will take care of itself. saving is a sin, we should figure out a way to borrow and play.....and declare bankruptcy when things go south. IMO investment markets are ponzi scheme played by OPM thats why so much swing(unless its a bull market…)

when it starts going up nobody cares for the fundamentals…even the govbenmint likes it.

my bullish argument would be: (which can last 6-8 months).

1. If somehow economic activity is restored even to 70% of past, markets are over sold compared to return from cash/safe investments, and of course who doest not like a roaring bull market….media, the white house, J6P…i can see them with wide smiles….when DOW goes up above 12k.
2. Long term(7-10 years) we are in deep shit because right now we are simply trying to inflate our way out, but i would not bet that it will not work in short term.(how hard is it for insolvent banks to become profitable when all the risk gets subsidized by gobenmint).
3. Govbenmint can print/borrow couple of trillions to start hiring big time to pick up slack from private…which can stop the current deflationary cycle…..and restart corporate hiring…..it may not last longer than couple of years since there is only so far you can cheat the savers.

in other words, i am not going to bet my money saying….reflation will not work at all. because the chinese/exporters will be happy to fund more if we want to buy their stuff….its much easy for them to do that than go for socially good, local economy..which nobody in the world has been able to perfect yet.

but my bear case will be:

1. huge inflation in commodities due to china moving out of dollar and into commodities.
this itself will be the big factor to stop govbenmint from movging forward with its reflation game….which is the only factor IMO helping the recovery…..inflation will also kill whatever spending power the population has.

if not for above…who cares if national debt goes upto 13 trillion from 10 trillion?? if dollar buying power is reduced upto 30% by printing…the debt will take care of itself.

saving is a sin, we should figure out a way to borrow and play…..and declare bankruptcy when things go south.

]]> By: ginger http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163253 ginger Sun, 19 Apr 2009 18:08:01 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163253 Barry, I don't know if you are personally acquainted with Rosie, but it will be a huge blow to those of us who love reading him every day, when he leaves ML on May 11. I'm based in Toronto & I kinow that once he starts working at Gluskin & Sheff we'll never, ever hear what his thoughts are. I've even tried to bribe him with a lunch invitation when he's back here in Toronto for good - I don't think it's working. :( Is there any chance you can maintain a pipeline to be able to pass along his thoughts occasionally (she asks hopefully)????? ~~~ <B>BR</b>: I do know Rosie personally -- I met him through Josh, who is an occasional commenter here. I will find out if we can occasionally pass along his work. I wanted to get him for the <a href="http://www.ritholtz.com/blog/2009/04/the-big-picture-conference-june-3-2009/" rel="nofollow">June BP conference</a>, but it is his 1st week of work. There is a project I have in the works that he would be great for . . . we shall have to see if he/we/me can squeeze him in . . . Barry, I don’t know if you are personally acquainted with Rosie, but it will be a huge blow to those of us who love reading him every day, when he leaves ML on May 11. I’m based in Toronto & I kinow that once he starts working at Gluskin & Sheff we’ll never, ever hear what his thoughts are.
I’ve even tried to bribe him with a lunch invitation when he’s back here in Toronto for good – I don’t think it’s working. :(

Is there any chance you can maintain a pipeline to be able to pass along his thoughts occasionally (she asks hopefully)?????

~~~

BR: I do know Rosie personally — I met him through Josh, who is an occasional commenter here.

I will find out if we can occasionally pass along his work. I wanted to get him for the June BP conference, but it is his 1st week of work.

There is a project I have in the works that he would be great for . . . we shall have to see if he/we/me can squeeze him in . . .

]]> By: Chief Tomahawk http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163251 Chief Tomahawk Sun, 19 Apr 2009 17:27:29 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163251 Must be time to get liquored up and go long.... Must be time to get liquored up and go long….

]]> By: call me ahab http://www.ritholtz.com/blog/2009/04/four-markers-of-an-economic-turnaround/comment-page-1/#comment-163250 call me ahab Sun, 19 Apr 2009 17:20:43 +0000 http://www.ritholtz.com/blog/?p=23878#comment-163250 Super-Anon- Thanks for the feedback on my question- makes sense I guess- any other input out there? next week will say a lot- slew of earnings coming out- how many good- how many bad- and more importantly how many with no guidance or a negative outlook- we have TXN, CAT, AAPL, UPS, MMM, HON (and of course BAC, MS, COF) and about a thousand others- should be interesting. Super-Anon-

Thanks for the feedback on my question- makes sense I guess- any other input out there?

next week will say a lot- slew of earnings coming out- how many good- how many bad- and more importantly how many with no guidance or a negative outlook- we have TXN, CAT, AAPL, UPS, MMM, HON (and of course BAC, MS, COF) and about a thousand others- should be interesting.

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