Two interesting articles in today’s NYT touch upon some of our favorite themes: Indebtedness of Consumers, the poor condition of bailed out banks, and the ongoing softness in the labor market.

The first is a front page article on the Credit Card firms reducing debt for delinquent borrowers, noting “The creditors would rather have a piece of something now instead of absolutely nothing down the road,” said Adam K. Levin, the founder of the consumer education Web site Credit.com:

Borrowers still have a crushing amount of debt to deal with, however. Revolving credit, a close approximation of credit card debt, totaled $939.6 billion in March. The Federal Reserve reported that 6.5 percent of credit card debt was at least 30 days past due in the first quarter, the highest percentage since it began tracking the number in 1991. The amount being written off was also at peak levels.

After a balance has been delinquent for six months, regulations require the card company to reduce the value of the debt on its books to zero. If a borrower has not paid by this point, chances are he never will. Banks and credit card companies are discussing new programs that would, for the first time, allow credit counselors to invoke reductions of principal as a routine part of their strategy, said Jeffrey S. Tenenbaum, a lawyer for many counseling agencies. In the past, counselors could persuade card issuers to adjust interest rates and modify late fees, but the balance was untouchable.

The second piece is a bout a State bailout for companies that are seeking to layoff workers:

As companies struggle to make it from recession to recovery, many are turning to a novel but unheralded program that cuts their costs while sparing their workers’ jobs. Under the program, known as work-sharing, employers reduce their workers’ weekly hours and pay, often by 20 or 40 percent, and then states make up some of the lost wages, usually half, from their unemployment funds.

Even though 17 states have adopted the program, and many executives and economists hail it as a way to keep workers employed and companies staffed with skilled labor, only a fraction of the businesses and workers that are actually eligible are benefiting. That is largely because of inertia and ignorance, government officials say. Many companies are unaware of the program’s existence, and few states advertise it — even though the program is credited with saving hundreds of thousands of jobs in Germany, whose work-sharing program has inspired other nations.

With unemployment in the United States above 9 percent and climbing, pressure is growing on the states that have work-sharing to increase the number of companies and workers that participate, and on the 33 states that don’t have work-sharing to embrace the program.

So much for the green shoots everywhere . . .

>

Sources:
Credit Bailout: Issuers Slashing Card Balances
DAVID STREITFELD
NYT, June 15, 2009

http://www.nytimes.com/2009/06/16/your-money/credit-and-debit-cards/16credit.html

Work-Sharing May Help Companies Avoid Layoffs
STEVEN GREENHOUSE
NYT, June 15, 2009

http://www.nytimes.com/2009/06/16/business/economy/16workshare.html

Category: Bailouts, Credit, Employment, Finance, Markets, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

150 Responses to “Green Shoots Everywhere ?”

  1. leftback says:

    Green shoots retreating into the ground. We are finally seeing some really weak technical action, closing in on the 50DMA/200DMA crossover area, once we breach that support we should retest 880, which remains THE level as far as this rally is concerned and should bring in buyers.

    One of the keys will be the appearance or otherwise of the “PPT” – if we don’t see the 2pm bid in SPY, then we may start to see some of the big shorts come out of the woodwork again.

  2. Wes Schott says:

    Roubini: U.S. risks double-dip recession “To me it’s more like yellow weeds,”…he says

    http://www.reuters.com/article/InvestmentOutlook09/idUSTRE55F4ET20090616

  3. call me ahab says:

    a wife of a friend works for Montgonmery or Howard County Maryland (can’t remember which) had to take a furlough for a few weeks- but how it was done was by reducing her pay temporarily to reflect the lost wages- she was still required to work her 40 hr work week-

    so – wages are stagnant or falling- doesn’t hold much hope for recovery- and as I said before- recover to what? – maybe this is as good as it gets- lucky to be working even at reduced pay

  4. schoolsout says:

    leftback Says:

    June 16th, 2009 at 12:51 pm

    One of the keys will be the appearance or otherwise of the “PPT” – if we don’t see the 2pm bid in SPY, then we may start to see some of the big shorts come out of the woodwork again.

    —————————–

    You thinking 2pm? Going to be an interesting day…

  5. schoolsout says:

    I am a salesman at a commercial truck dealership…I think I am about to get the axe soon. Our dealership, one of the oldest Mack dealers in the nation (since 1939) is having to borrow money monthly just to keep up…things aren’t so green from where I’m sitting.

    However, I will be going back to school to study accounting, so this may work out for the best.

  6. leftback says:

    Energy stocks selling off in the face of higher oil. That’s bearish. Someone doesn’t believe the higher oil price ?
    Happy that almost all of my longs are long gone. Treasuries are having a very good week already.

  7. DL says:

    “State bailout for companies that are seeking to layoff workers”.

    All well and good, provided that the states have the money…. many do not. Also, the program could easily invite abuse from employers

  8. franklin411 says:

    Green shoots…if you take off the blinders, Barry:

    Tyco Electronics boosted its fiscal third-quarter guidance, saying sales have improved in the consumer-related markets served by the electronic components segment.

    Nucor Corp. said its second-quarter loss might be narrower than it had feared, noting orders have improved recently.

    http://online.wsj.com/article/BT-CO-20090616-708985.html

    ~~~

    BR: You think referring to — a) rising guidance from TYCO and b) a forcast that a loss might be smaller than expected — as green shoots?

  9. Boots or Hearts says:

    (SP500 15 min chart ) Looks like a nice 5 wave move is wrapping up from 6/11 to today. So we get a bounce for a few days then another leg down? Thats what I am guessing.

  10. kronicade says:

    Not to sound heartless, but I think a lot of companies may want to “trim the fat” during a recession. Keeping people on board simply to help the economy doesn’t seem to make sense, especially if there’s nothing for the worker to do. We are not Europe.

    This situation reminds me of the GM workers who went to work despite having nothing to do. The employer is just holing on to an employee in hopes things will get better soon.

  11. leftback says:

    @schoolsout: Good luck with the accounting – we will need a lot of forensic accountants to account for all of the fraud and theft that has been taking place in the last decade.

  12. leftback says:

    Another hedge fund fraud. There is never just one cockroach.
    http://www.bloomberg.com/apps/news?pid=20601087&sid=a0uGVcMBeH_k

  13. AmenRa says:

    @Boots or Hearts

    The S&P had a reversal day yesterday (and also tested the rising window). Well the window was shut today which is bad news for the bulls. The rising window (candelsticks) is the same as a gap up where the window is a support zone. But now that its closed it may give the bulls reason the push the market higher.

    btw someone tell Bloomberg that the 200EMA couldn’t be breached but the 200DMA could.

  14. AmenRa says:

    I see green shoots everywhere. Each strip mall or large mall I drive by have more and more “For Rent” signs in the windows. It’s almost to the point that every block you drive down has a “For Sale” sign in front of a couple of houses.

  15. batmando says:

    @F411
    a report from the real world…
    We are a +$10 mil/yr mfr. of industrial grain processing equipment (cost ~$300K-$500K/unit) with a world wide established customer base. 2008 sales were up 30%. 2009 sales were projected for a similar rise, based on customers’ planned projects. Through April, confirmed orders on these project were light but steady. In May, the well dried up.
    In June our president visited our distributors and production partners in China. Though he saw plenty of economic activity there (compared to 6 months ago), there were no orders to be had in all of China’s agribiz.
    Ditto around the world and here in the good ol’ USofA. All projects are on hold, none of the budgeted capital expenditure funds are being released by managements.
    Upshot: top-to-bottom 20% wage cut, 4-day work weeks thru June. If no orders come in for July, 40% cut, 3-day work weeks in July. In August, if no improvement, come lay-offs.
    No green shoots here in southwest Ohio (except for BRAC program re-locations to Wright-Patt AFB).

  16. schoolsout says:

    leftback Says:

    June 16th, 2009 at 1:29 pm
    @schoolsout: Good luck with the accounting – we will need a lot of forensic accountants to account for all of the fraud and theft that has been taking place in the last decade.
    ————————————-

    Funny you mention that…uncle is contemplating starting a firm here (retired from Ernst/Young) and sent me an article on Forensic Accounting 2 weeks ago. From the article, not many schools specialize in that. Ga. Southern was the one featured.

    Any suggestions or anything that you know of off hand?

    ————————————
    batmando Says:

    June 16th, 2009 at 1:39 pm

    GM Medium Duty is out of the game with no buyer….Isuzu has so far said no. Our vendors (class 8 trucks) are cutting off ordering deadlines in anticipation of plant closures (temporary for now)….trailer mfg are slow…body companies are laying off left/right. Owners of companies (locally) are firing and going back to work themselves….

    Yea…green shoots.

  17. scm0330 says:

    @batmando
    I’m not sure F411′s passport app for the real world has cleared yet. Thanks for the dispatch, in the meantime. (Hope his ladyfriend wasn’t going to work for Extended Stay, either. Might make for a pretty short career in HR.)

  18. super_trooper says:

    @Wes Schott Says:
    Roubini: “To me it’s more like yellow weeds,”

    He’s been saying that for a few months. He’ll see green shoot soon too.
    http://www.rgemonitor.com/roubini-monitor/256736/green_shoots_or_yellow_weeds

  19. dead hobo says:

    schoolsout Says:
    June 16th, 2009 at 1:06 pm

    However, I will be going back to school to study accounting, so this may work out for the best.

    comment:
    —————
    I’ve always thought of accounting as restful, in a good way. You have nice problems to solve, enough of a routine to feel stable but more than enough non-routine stuff to keep it interesting. If you want t get rid of someone, just start talking FASB and watch them run.

    Here’s something to keep in mind that will help you out a lot in school. On your own from Amazon purchase some CPA review texts and study them WHILE you are in school, not after. If you read Auditing or Financial Accounting review texts concurrent with your classwork, it will make the classwork much easier. Course texts are far to verbose to learn well from and the CPA review texts come directly to the point, plus they have hundreds of solved problems. Buying 1 year old used one’s won’t hurt you too much and you’ll save a bundle. Unfortunately, Corp Taxes are complicated and this approach won’t help as much there.

  20. Doc at the Radar Station says:

    Work sharing would be far more effective if the cost of health insurance for those employees didn’t get larger in proportion to labor when the hours were reduced. Another benefit if the health insurance factor wasn’t there: Employers would be more willing to hire new workers rather than pile on OT when business picks up.

  21. aitrader says:

    When will the pundits cop to the simple truth that this is a reset to a fundamentally lower level of economic activity? (Sure – you can call that growth if that floats your boat).

    It’s a”de-leveraging” to a level that is “sustainably” in line with OECD debt levels.

    That’s when that fat lady sings folks! When debt levels IN AGGREGATE are in line with historical norms.

    Seems obvious to me, but I’ve seen precious littles in the MSM or even the econ blogs to say as much.

    ~~~

    BR: You mean something like this?

    Downsizing America (February 9th, 2009)
    http://www.ritholtz.com/blog/2009/02/downsizing-america/

  22. leftback says:

    Possible 2pm pump. Zero Hedge will be all over it.

  23. Mannwich says:

    @leftback: This one’s for you in Fraudfield County…..

    http://www.calculatedriskblog.com/2009/06/jpmorgan-analysts-predict-60-house.html

  24. dead hobo says:

    schoolsout Says:
    June 16th, 2009 at 1:45 pm

    Funny you mention that…uncle is contemplating starting a firm here (retired from Ernst/Young) and sent me an article on Forensic Accounting 2 weeks ago. From the article, not many schools specialize in that. Ga. Southern was the one featured.

    comment:
    —————–
    Forensic accountants have a professional designation and professional group. They also offer a course that will help you pass the test for the designation.

    On a practical level, you will need to know accounting and auditing well, although a forensic accountant will be able to spend more time figuring things out than an auditor typically would on an audit. The problem at hand will be why you are there. Again, look at Amazon and pick up a used book or two on the subject to see if you are interested. An older, used edition will be fine because the basic scams don’t change much over time. As a forensic accountant, you will be sifting through evidence in such a way that you can help build a case against someone and pass along what you learned to someone who can do something with it. From what I have read, an experienced forensic accountant would look down on an auditor as a nitwit who misses a lot.

  25. The Curmudgeon says:

    Dear god, where’s the pump? On a day when housing starts (m-t-m) sprout higher, SPY is in the red?

    What’s that? The Federal Reserve’s Committee for Whacking Moles is busy chasing a family of vigilante moles on the far end of the course (yield curve)?

  26. Thor says:

    aitrader – When will the pundits cop to the simple truth that this is a reset to a fundamentally lower level of economic activity?

    My theory on the “green shoots” reporting is that the media is now hyper sensitive in reporting bad news because they were chastised to heavily earlier in the year. Remember all the talk about the media making things worse by scaring people? All the talk about Depression. What I remember most particularly, was how in March when the Dow was reaching it’s low there was constant talk in the media about how the “market” didn’t like the Obama plans.

    My guess is that what we’re seeing now from the media is just the flip side of what we saw last year and into this spring.

  27. Pat G. says:

    “Indebtedness of Consumers, the poor condition of bailed out banks, and the ongoing softness in the labor market.”

    And if you throw in falling asset values in housing and retirement funds, nothing has essentially changed since last year. And there are more, potentially bigger problems in the pipeline. So what has all this QE and deficit spending by governments around the world done to alleviate all of these issues? Made them less worse? LOL Kind of like everything else…

  28. Mannwich says:

    PPT had better get warmed up. Might need them before the usual final hour today.

  29. leftback says:

    “So what has all this QE and deficit spending by governments around the world done ? ”

    Alleviate the panic and End of the World talk we were hearing in March – that’s about the sum total of the results. No worries, though, because we are very likely to have a repeat in the coming winter.

    Manny – thanks for the link on high end housing, of course it won’t apply to Manhattan because It Never Goes Down Here or to Greenrich, CT because there are None of Those Subprime People Here.

    Very bearish forecast – hey maybe JPM is now trading on The Dark Side. They bought SHY not SPY !!

  30. dead hobo says:

    S&P going down and volume up a little, as compared to recent days. Could it be? Might it happen? It is true? Are they gone?? Has the checkbook been closed for now? Ooooh. The anticipation is killing me.

  31. Thor says:

    Hobo – How did you get the pic in your profile box?

  32. schoolsout says:

    dead hobo Says:

    June 16th, 2009 at 1:50 pm

    ———————–

    Thanks for the suggestions.

  33. Transor Z says:

    Here’s my nomination for the Official PPT Sound Effect:

    http://www.grsites.com/archive/sounds/view/1831/

  34. Thor says:

    Hah – here’s some green shoots for you all.

    NEW YORK, June 16 (Reuters) – A top Federal Reserve official warned on Tuesday not to take recent gains across a range of asset prices as proof the U.S. economy is on the verge of a strong recovery.

    “The panic’s hasty retreat should not be confused with robust recovery,” Federal Reserve Governor Kevin Warsh said in prepared remarks to the Institute of International Bankers annual meeting in New York.

    “The rather indiscriminate bounce off the bottom — across virtually all assets and geographies — may be more indicative of a one-time reset, which may or may not be complete.”

  35. franklin411 says:

    @Leftback
    Congratulations. You are now officially a Green Shooter. Despite Barry’s straw men, green shoots has never meant anything more than the idea that the economy will not collapse forever, that there are signs of life within segments of the economy, and that it’s a question of when, not if, there will be a recovery.

    Again, congratulations for stepping out of the shadows! =)

  36. dead hobo says:

    Thor Says:
    June 16th, 2009 at 2:17 pm

    Hobo – How did you get the pic in your profile box?

    reply:
    ————–
    Little bitty tweezers and a dirty fingernail.

    Google WordPress and picture and you will find a separate site. I can’t remember the name. They’ll tell you how to do it.

  37. Thor says:

    Franklin411 – What is your actual opinion on this matter? Are you of the belief that we’re on our way out of this in a typical V shaped recovery? Or do you see this as more a protracted U shaped? Or W? Or do you think we’re headed for a Japan-like decade of bouncing along the bottom?

    It’s one thing to pick apart other people’s posts, it would be interesting to hear what you’re predictions (guesses) are.

  38. plantseeds says:

    schoolsout Says:
    However, I will be going back to school to study accounting, so this may work out for the best.

    I’m doing the same thing, I was “let go” earlier in the year (from a large F/S firm, i’ll spare you details since i’ve already aired out my dirty laundry) after 10+ yrs in the financial services arena (mostly trading desk and regulatory work). I’m ready to let those securities licenses expire ( i swear…i have no axe to grind ;). I started on my MS in Accountancy taking summer classes to get it rolling, i’m a little rusty but it’s a blast. Plus, if value investing ever becomes a reasonable approach again i’ll have a fresh perspective.
    Good luck.

  39. franklin411 says:

    @Thor
    I posted my opinion a while ago. Basically, this is a bearish blog and anyone who rejects the bearish idea that the economy will collapse in perpetuity is cast as a dreamy idealist.

    As a refresher, I think we are in for a wide U shaped recovery. Unemployment will peak this summer at 10 to 11%, and we won’t get back to something resembling full employment until 2012 or 2013. GDP will start growing again by the end of the year but the recovery will be slow, and it won’t be driven by housing or consumption. It will be driven by government investments designed to end our consumption-oriented economy and make America a producer once again.

    ~~~

    BR: This blog made a bullish call back in early March — its hardly all doom and gloom, and the occasional (and appropriate) bullish calls reflect that.

  40. Mannwich says:

    @f411: I prefer the term “fact-based” blog, thank you very much. I’m sure there are other Obama fan boy blogs that might suit your Obama flag waving.

  41. schoolsout says:

    Franklin, what investments would the gov’t be making that will turn us into producers again?

  42. leftback says:

    “Basically, this is a bearish blog and anyone who rejects the bearish idea that the economy will collapse in perpetuity is cast as a dreamy idealist.”

    A bit of an over-simplification. I have no canned goods or guns, and am happy to trade from either side of the oscillatory debt unwind as we sink into a state of post-imperial idleness, decay and shabby gentility, UK style.

  43. willid3 says:

    not sure we will get back to where were ever. consumer has changed their buying habits and needs to pay off their debt, and the baby boomers are retiring and need to save some money (and they have been the biggest buyer)., and credit rules have gone back to normal, no more of those if you can breath sort credit rules. on top of that, we have that ever popular race to the bottom (from globalization), which continues. so the new normal may not be much better than now. ever.
    and i don’t know that i would be going into accounting. that has been a very popular profession. in India.

  44. franklin411 says:

    @schoolsout
    We can start by not closing any more schools!

    I laid out my case here in May:
    http://www.ritholtz.com/blog/2009/05/sentiment-reading-mixed/#comment-168777

  45. Ned Bushong says:

    >>“Green Shoots Everywhere ?”<<

    I don’t know about that! But, I do know: if you drink too much draft beer you’ll get the ‘green shits’.

  46. dead hobo says:

    franklin411 Says:
    June 16th, 2009 at 2:29 pm

    It will be driven by government investments designed to end our consumption-oriented economy and make America a producer once again.

    comment:
    —————–
    government does not invest. It makes expenditures. This is a form of consumption, but usually is low impact spending. Government expenditures for food stamps or bullets do not add assets to society that might further be used in a production process. Food stamps are a transfer payment and a bullet will hopefully just stay in the box until another Republican is voted into the Presidency. A bridge is a public asset that adds value because it will be used in a productive capacity. Most government spending is not of the latter type.

    If private investment is not making a difference, then this is a dead economy in a liquidity trap, and government make-work won’t help. Perhaps, as they did in Japan, we can begin a program to pave everything over. By your logic, this will help a lot.

  47. Transor Z says:

    |_______________________________________________|
    2007 2017

    Wide U (aka the “Nippon Gambit”)

    Love this one:
    It will be driven by government investments designed to end our consumption-oriented economy and make America a producer once again.

    I take it you mean we can accomplish that if the “government investments” include relaxing child labor laws, sending the national guards to deal with picket lines, repealing CAFE standards and Clean Air Act, and putting lazy prisoners to work gulag-style. Clearly you would like to contain labor costs (i.e., wages to people who like to buy stuff) and bring them in line with prevailing global wages.

  48. I-Man says:

    To update my post from this AM:

    “OT: Some thoughts on the tape…

    The I is watching 932 on SPX, 93.20 on SPY as overhead resistance from yesterdays breakdown.

    36.20 overhead on the Q’s.

    SDS and QID could be nice swing trade setups if resistance holds, but the trend is gingerly still up, and if resistance breaks, then SSO and QLD could provide the nice opposite swing. With stops set according to those resistance levels… which we would deem cautious support.

    Looking at UCO, might play this mornings gap support for a long day trade. Get long on a retest of gap support at 14.10… Stop set at 14.

    Here at Dread Capital, our core is still short via QID, SRS, and FAZ… but we aint afraid of the trend based swing trade… gotta love those 15min charts in this tape. They have been money.”

    After taking a stab at a long UCO day trade this morning… Got clipped out fast, and immediately flipped into ole DUG because the OIH was looking shitty, and the dollar was still weak. Would have expected crude to tank harder today… but the dollar… well, yall know that story.

    They will pump- you know it. Who gives a shit though? They keep getting a weaker and weaker response… at some point its a waste of time and money. Problem with watching this is that the amount of people frontrunning their pumps is increasing, so its hard to tell anymore whats a pump and whats a chump. In either case, the freightrain will get them one of these closes. We shall see…

  49. leftback says:

    “this is a dead economy in a liquidity trap”

    More or less what Mr Krugman said this week. Note the increasingly bearish rhetoric being reported in MSM this week? That’s because the banks have been recapitalized – by our friends Johnny Retail and the InvestTools.

    - now in order to deal with the funding problem, the Primary Dealers are back to buying Treasuries instead of gunning the SPY every afternoon to prevent Armageddon. It’s all out of the Japanese playbook with a twist or two.

    Watch the commodity mini-bubble melt in front of our eyes.

  50. dead hobo says:

    Transor Z Says:
    June 16th, 2009 at 2:42 pm

    |_______________________________________________|
    2007 2017

    Wide U (aka the “Nippon Gambit”)

    reply:
    —————-
    Well said.

  51. karen says:

    I hope the O-man plans to take away 2 government agencies for every 1 he creates:
    Official: Obama to propose new consumer agency 6 minutes ago
    By JIM KUHNHENN Associated Press Writer
    (AP:WASHINGTON) An Obama administration official says the Treasury will propose the creation of a regulatory agency to protect consumers in their credit, savings and other banking transactions.

    The new agency is one of the central elements of President Barack Obama’s overhaul of the financial regulatory system. The president is set to announce his broad plan on Wednesday.

    The administration official described the plan on the condition of anonymity because Obama had not yet made it public.

    Obama’s decision to create the agency is in response to criticism that lenders and credit card companies have taken advantage of unwitting consumers and saddled them with debt.

    The new agency is likely to be one of the flash points in the administration’s proposal because many in the banking industry do not support it.

  52. scm0330 says:

    @F411
    Although you’re highly likely to quibble the point, you’ve been defining green shoots downward for some time, from “the recovery is here” to “the recovery is nigh” to “at some point, there will be a recovery.” At last, I think I’ve found some common ground with you, for I too believe that GDP will eventually print positively (a mathematical certainty), and the world won’t come to an end. I guess you can mail me out my official Green Shoots Brigade badge and decoder ring.

  53. ben22 says:

    Leftback says in response to Franklin:

    “Basically, this is a bearish blog and anyone who rejects the bearish idea that the economy will collapse in perpetuity is cast as a dreamy idealist.”

    A bit of an over-simplification. I have no canned goods or guns, and am happy to trade from either side of the oscillatory debt unwind as we sink into a state of post-imperial idleness, decay and shabby gentility, UK style.

    Franklin thinks bear equals ultrashort which is ignorant at best. I’m sure he was probably also blaming shorts for the market downturn last year like many others were. Notice above how he says that you have “come out of the shadows” he uses terms like this to describe bears for added effect. There is an idea there that bear is bad, it is darkness as opposed to light. Sorry Frank but last year the bears were the light and I don’t think it’s Barry that has the blinders on as you state @ 1:15 .

    Franklin is a master at these things, many people in this country without real skills know how to manipulate with language, he probably uses these skills in the classroom as the students stare in awe, just like how he tries to spin a loss that is lower than expected as a green shoot. He probably never gets challenged in the classroom which is why when he does here he reverts to calling it a bearish blog or posting some CEO quotes or posting the best monthly data point he can find and reminding people to pay attention. When he is hit with real data from people here that have a more bearish stance he simply states they are of the doom and gloom crowd. He’s never run a biz, never traded more than odd lots, and clearly doesn’t know sh*t about money. He doesn’t even know what is going on in his own state so why should anyone think he can make good forecasts about the global economy.

  54. dead hobo says:

    ben22 Says:
    June 16th, 2009 at 2:52 pm

    He’s never run a biz, never traded more than odd lots, and clearly doesn’t know sh*t about money. He doesn’t even know what is going on in his own state so why should anyone think he can make good forecasts about the global economy.

    comment:
    ——————
    Sounds like he’d be a network star on CNBC.

  55. Mannwich says:

    @ben22: With re: to f411, it’s simple – - last year it was OK and well justified to be bearish because Bush was the president. Now that his man O is the prez, it’s borderline treasonous to be a bear or live have a reality-based view point.

    It’s ALL political ideology with f411 and others in this country. That’s one of our biggest problems.

  56. Bruce N Tennessee says:

    Franklin:

    Many of the liberal arts programs are a waste of money. (What is the first question an art history, history, sociology, Latin, psychology, etc. asks when reporting for work…I’ve already used that analogy…)..

    More money into productive majors…engineering, math, accounting, chemistry, information technology, computer science, biological methods and engineering, etc….

    The University of Tennessee announced an 8% increase in tuition today for UT Knoxville, and a 20% increase in tuition at the veterinary school…I say close the history department and lower the tuition in veterinary medicine…

  57. ben22 says:

    @hobo,

    he would fit in perfectly on tv. He’s got a way about him to spin data with his words that rivals the best of them on CNBC. He’s very sly about it.

    @Mannwich,

    all I can say is if that’s what is going on here it’s more than sad. Politicians bribe us with our own money.

  58. Thor says:

    Re Franklin:

    Yes guys, but you have to admit, he does keep many of you on your toes. He’s the Yin to your Yang ;-)

    Franklin – I’m not sure I would agree with you that this is a site for Bears – take a gander over at Zerhohedge if you want to see what the real doom and gloom crowd looks like. You can’t go 5 minutes without reading something about communism, rule of law, fascists, etc.

    I think a lot of the posters on here are just a little more cynical than you’re used to. I don’t even really see them as cynical, just more realist Personally, I don’t want things to get better soon. That’s not because I’m a doom and gloom kind of guy, it’s because I think we need a very strong reset in consumer behavior to truly change the direction of this country and having a repeat of the .com implosion isn’t going to change much.

    Also, I get the impression that you’re fairly young – I’m 37 myself. Trust me, you get a lot more cynical the older you get ;-)

  59. Thor says:

    Manwich – Amen brother. Extreme partisan politics is at least as big of an issue for the country moving forward as consumer indebtedness. I grew up in one of the most partisan places in the country (if not THE most partisan). It’s not good, trust me.

  60. AmenRa says:

    Why is it some economic indicators are considered leading when times are good and lagging when times are bad?

  61. Bruce N Tennessee says:

    Thor:

    You are exactly right in your charecterizations. For some, realism is pessimism. I am now in my 50′s happy as a clam, but grew up in the Vietnam War era. If what was spoon fed to us then didn’t make you cynical as an adult, you weren’t paying attention…

  62. ben22 says:

    I don’t want to make my thing above into a personal attack on Franklin, that’s not what it is. I could really care less what he does with his own capital or what his economic views are. What Franklin needs to understand is that somebody somehwere could read his comments on here, perhaps right after watching a new round of Kudlow and Co. and take that side, invest their hard earned money that way and end up getting killed. I saw people on this board in 2007 saying the same things he is saying now. I wonder if he ever thinks about this when he trots out his less than convincing green shoots data.

    If you don’t think that happens take a stroll over to the yahoo message boards.

  63. DL says:

    Article that will be of interest to anyone who owns the natural gas ETF (UNG):

    http://ftalphaville.ft.com/blog/2009/06/11/56933/the-problem-with-commodity-etfs/

    Discusses how the fund managers have been forced to buy the over-the-counter swaps in large quantity.

    May also explain why this, and certain other ETF’s are such “money vampires”.

  64. Thor says:

    Bruce – I hear ya. I grew up in the shadow of your generation (Gen X) we’re the original latch-key kids, I think most of us were born cynical. It’s this iPod Generation I’m more than a little worried about. Kids who’ve had everything spoon fed to them since the day they were born. I see them at work and they’re always a hoot – demanding raises and promotions for no reason other than they show up to work every day – “I’ve worked here a year, what do you mean I can’t have a promotion and a raise?!?!?!”

  65. call me ahab says:

    b22 Says-

    “Franklin is a master at these things, many people in this country without real skills know how to manipulate with language”

    master? manipulate? I find franklin’s comments childish, silly, sophmoric, vapid and superficial- definitely not masterful, not original, not thought provoking – just silly gibberish

  66. leftback says:

    @ben:

    TBP, in its finer moments, can resemble a debating society at one of the world’s better universities.
    Yahoo message boards = a food fight at lunchtime in junior high.

  67. Bruce N Tennessee says:

    Thor:

    But this particular response to our current economic crisis is like the old Three Dog Night song about Momma Told Me Not to Come…”This is the craziest party that could ever be”…I am cynical because I just didn’t even THINK we’d try to spend our way out of too much debt…this idea is so foreign that when I think about whether it will or won’t work, I must make myself consider that it could and not dismiss it out of hand. But until I do see green shoots, not feelings, my inner cynic will be alive and well, thank you.

  68. call me ahab says:

    OT

    i wish I would have bought PALM as a lottery ticket back in November- $1+ a share- looked dismal- but now- new product seems to be the real thing – heavy demand- and I think there is a real desire for something other than the iphone and ATT-

    who knows- with my best Chris Berman voice- ” they . . . just . . . could . . .go . . . all the way”

  69. DL says:

    Leftback @ 3:30

    “TBP, in its finer moments, can resemble a debating society at one of the world’s better universities”

    That’s pretty awesome.

  70. hopeImwrong says:

    DL – Thanks for the link to the UNG info. A must read for commodity EFT investors and traders.

  71. emmanuel117 says:

    @DL

    I am amazed at anyone who buys-and-holds ETFs which are essentially bundles of monthly commodity futures contracts. Lol at DCAing into one.

    And damn, 78% open interest!

  72. ben22 says:

    @ahab,

    I think you are a little smarter than the average person out there. Probably lots of people that come to this blog aren’t was my point, so they get suckered on that stuff. Barry gets some 40k readers all day on here, only a few dozen of us are always posting so many are just reading. Most people are sheep and its easy to get them to do things if you make it sound good. Franklin makes bears sound bad, he likes to paint them as troublemakers or people that are losing a ton of money because they are so short the market, he does it as well as a Kudlow, and though we might all think Kudlow is a clown more people are listening to him than any of us. It causes a great deal of confusion for the uninformed reader. I’d rather help educate, not push my own agenda.

    Using language like “out of the shadows” has an impact on people that are only half paying attention to what they are reading or looking to prove something they want to have happen. Subtle things like this are far more powerful than I think you are giving them credit for. The tabacco companies realize this sort of thing if anyone does.

    @LB,

    No doubt on the yahoo boards, I went to one about a year ago and couldn’t even believe some of the stuff on there. Nuts. That said, don’t think people aren’t going there and using ill informed investment ideas to put money in the market. They are.

    Franklin, here is a quote you should consider before you bash BR and state that he has blinders on:

    It is ridiculous for any man to criticize the works of another who has not distinguished himself by his own performance.

    Now if you’d be so kind as to prove to us about how you have done better than BR when it comes to economic analysis or investment results over the last year (I’ll let you include this rally) then I promise I will never say anything else to you or argue a point you make again. I’ll also promise that if you end up being correct about what is happening here I will leave the blog comment section for good and just stick to reading on the site. It only seems fair right?

  73. Christopher says:

    “government investment” = “military intelligence”

    Hear Hear Bruce!!

    Does the world/country really need anymore history or journalism majors right now??
    How about just cutting off govt funding for useless majors??
    If you want the degree fine….write the check.

  74. Marcus Aurelius says:

    Bruce N Tennessee Says:

    “More money into productive majors…engineering, math, accounting, chemistry, information technology, computer science, biological methods and engineering, etc….

    The University of Tennessee announced an 8% increase in tuition today for UT Knoxville, and a 20% increase in tuition at the veterinary school…I say close the history department and lower the tuition in veterinary medicine…”
    ___________________

    Coming from a practitioner of the medical arts, I find your comment a little hard to understand. The difference between the science of biology and the art of medicine should not be lost on you. The extension of your logic would be something along the lines of: why do we need doctors when we have biologists who specialize in anatomy and physiology?” It is the level of understanding of their art that separates good doctors from bad, and all doctors from all biologists, chemists, etc.

    Who will by the output of all of the new mathematicians and accountants you seek to have educated? Do we have a shortage of veterinarians?

    I would also counter that the old nugget about history and repeating it holds true.

    There has never been a science that spawned an art, but all of the sciences can be traced to their roots in liberal arts (of course, you’d have to know some history — the bulk of which is contained in the artifacts (art) past civilizations and cultures have left behind — to understand the profound and undeniable truth of this argument).

    Everything Leonardo DaVinci ever did — was it science or art? Who engineered the dome of St. Peter’s Basilica? Who made the first bowl? Why does a Mercedes cost more than a less expensive cars that can go as fast and last as long (because it’s more of a work of art than the others)?

  75. Marcus Aurelius says:

    Oops — who will buy . . .

  76. Mannwich says:

    Me-thinks the jig is just about up. Ugly close.

  77. Thor says:

    So no pump today – cvienne where are you? Explain this to me! :-)

  78. leftback says:

    Extended some long $ trades into the close. Not doing much here, but watching 925 overhead as a potential “lower high” and 903 and 880 below as the bottom of a 5% trading range set-up.

    “Does the world/country really need anymore history or journalism majors right now??”

    Of course, where are the next generation of bankers and MSM jackasses* going to come from?

    *Exhibit A – D. Kneale.

  79. dead hobo says:

    leftback,

    Hell of a close. Did you do that? DL, what about you? Son of a bitch. A normal end of day. Haven’t seen one of those for a long time.

  80. call me ahab says:

    marcus says-

    “There has never been a science that spawned an art, but all of the sciences can be traced to their roots in liberal arts (of course, you’d have to know some history — the bulk of which is contained in the artifacts (art) past civilizations and cultures have left behind — to understand the profound and undeniable truth of this argument).”

    I am with you all the way marcus- nothing wrong with sciences by any means- however- classical studies teaches you “how to think”- all the great minds come from these studies- so must be something to it-

    this coming from a man w/ a BS in finance

  81. cvienne says:

    @Thor

    I’ve been calling for 912 on the S&P all week…

    I even narrowed that down to 911.43 at around noontime…

    Low print today………………….911.60

    So tomorrow we open at 911.26 – sell off for a half hour down to Karen’s 908, then rally back and close at 922…

    Piece of cake…:-)

  82. call me ahab says:

    talk about deflationary- hope the benefits are good- like free meals maybe

    http://finance.yahoo.com/news/British-Airways-asks-apf-15539391.html?.v=1

  83. Transor Z says:

    @ben22:

    Good for you for thinking about the consequences of your comments. That was why I got on someone’s case yesterday on another thread for spinning a fictitious yarn about refusing overtime many years ago because it would have moved him into a higher tax bracket and allegedly would have caused him a net loss. I called him on it because that is bullshit. It just isn’t how progressive taxation works. But some moneyed people don’t exactly mind letting hourly workers think so . . .

    Worst case, that kind of thing is disinformation for partisan purposes that political hacks see as just “breaking a few eggs to make an omelet.”

    The other thing is — and I’ll speak only for myself here — I know I was a lot less compassionate in my teens and 20s. It isn’t until Life messes with you a little bit and you get a come-uppance that a lot of people finally lose the blinders. I’m still “young” because, unlike Bruce, I maxxed out at at 39 . . . ;)

  84. I-Man says:

    As per the close… I liked TD’s wording at ZeroHedge earlier today…

    “Rejected by the Market.”

  85. Mannwich says:

    @Transor Z: Funny you mention 39. I turn the big 3-9 tomorrow and will forever remain there in the future.

  86. Mannwich says:

    @Transor: Also saw your post calling out that other person making claims about OT and taxes. Didn’t he say he couldn’t remember the specifics but that it was something like 40+ years ago? Definitely sounded ideologically fishy to me, more likely blatantly inaccurate.

  87. Thor says:

    Pretty impressive Cvienne – very good call

  88. call me ahab says:

    mannwich-

    happy b-day bro- get some natty ice- or splurge- and get some PBR- and chill with the friends and family

  89. I-Man says:

    @ Left:

    I was a history major… so we’re not all bad. But then again, I wrote my thesis on the social influence of politically charged reggae on Jamaican politics in the 1970s… which wasnt much of a popular topic at my chosen institution. In fact, I believe the chair of the department criticized my work as “not being history”. I told him to f*ck off.

  90. leftback says:

    @cvienne: You and Karen have certainly had the market’s pulse this week so far, nice reads.

    I have been patient with SPX but it is certainly looking like it is finally rolling over. I have been more or less correct on the stronger $ trade, and buying into the long bonds during the Death of Treasuries event may yet prove to have been a good move. I very much doubt whether the commodity mini-bull can continue. If oil starts to trade down independent of the $ moves that would be a very bearish sign indeed for crude. The OIH seems to anticipate this.

  91. Bruce N Tennessee says:

    Marcus:

    Sometimes we say things just to get a rise out of people….This is the side of me that picks a fight with nitwits like Franklin…it may well be that I don’t truly feel that way.

    Sometimes you must read between the lines and understand the context…

  92. Transor Z says:

    @ Mannwich:

    Yes. A few things didn’t seem right about his posts.

  93. ben22 says:

    Transor,

    Wow, I missed that thread. Most moneyed people don’t mind letting others think whatever, as long as they keep theirs. You think a guy like Mozilo gives a rats ass that people are upset with him? Nah. He’s laughing his ass off. You think Madoff feels bad? I don’t.

    I do actually try to think on things when it comes to the market or the economy before I write them here. Especially if I mention a stock/fund/ETF. People are using this information to trade, there is no doubt in my mind that is true. Thinking first instead of just saying is a lost art. I always laugh when they say Cramer has 2,000 stocks in his head. I’m sorry but that is impossible, to really know 2,000 companies well. But it doesn’t stop millions of people from buying it.

    I suppose here you get what you pay for so you can’t complain if it goes wrong but still….

  94. Thor says:

    I-Man – should have majored in History myself, it’s always been my passion. I thought at the time though, that I should major in something more “practical”, something that could “help people” so I chose Psychology. By the time I was finished I realized listening to other people bitch about their lives all day wasn’t quite my cup of tea. Luckily I fell into IT and it’s been very good to me.

    Agree with all of you though, many of the social sciences and arts teach you how to think objectively. Even though I didn’t use my psychology degree for anything, it has helped me immensely in dealing with people at work. Something of an art form itself in IT.

  95. leftback says:

    “the chair of the department criticized my work as “not being history””

    I-Man, respect, bro’. I-and-I expect that the chair he self is now “history” or pushing up daisies.

  96. Andy T says:

    Whoa. That is NOT the close the bulls wanted to see. Short term bulls need to turn this thing around quickly tomorrow, or else I’m seeing the possibility of some “waterfall” action next few days….Right now it looks like a fully complete “five” down from the highs, but because of how it’s setup here, it could also be a series of 1-2′s with an uncomfortable third wave extension coming. Stay tuned.

  97. Transor Z says:

    @Mannwich:

    And Happy Birthday — assuming you’ll do something more fun with your day tomorrow than logging in here! :)

  98. Transor Z says:

    Not that TBP isn’t fun. Just not birthday fun IMO.

  99. I-Man says:

    Rahspect to you too Left.

    I and I couldnt find the courage to hold onto DUG overnight… had to bail, the headfake at 3:45 got me. Oh well… live to trade another day.

    DTO is starting to look appealing at the bottom of the channel though… looking like the $USD might have a nice day tomorrow.

    You still in that Mistress?