Fusioniq’s Ritholtz Sees `Major Cyclical Correction’ (Audio)
Oct 23, 2012

Barry Ritholtz, chief executive officer of Fusioniq, says “earnings are beginning to contract” and a recession may be ahead. Ritholtz talks with Bloomberg’s Ken Prewitt and Tom Keene on Bloomberg Radio’s “Bloomberg Surveillance.”

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Category: Cycles, Video

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10 Responses to “Ritholtz Sees “Major Cyclical Correction””

  1. cdub says:

    Wait. that sounds like a major change for you.

  2. qmandtm says:

    Great stuff. On a completely different tangent, has anyone ever told you you sound like Boone from “Animal House”?

  3. AsiaXPAT says:

    Listening to this… how can you say we will not revisit 2007?

    Look at the massive sovereign debts which worsen dramatically by the day – they are strangling growth in virtually all major economies – growth is DEAD… and the only answer is to print more money – the UK, Japan, US and the EU are printing like crazy… I have seen the ghost towns in China… yet China is indicating they will build even MORE… this is insanity.

    Yet you make it sound like this is just another ‘business cyle’… It is absolutely not just another business cycle. It is madness.

    The entire global economy is now based on printed money – if you doubt it imagine this: Bernanke announces on Sunday ‘no more QE because we feel the toxic side effects outweigh the positive’ – as soon as Asia opened markets collapse and we’d have a far worse scenario than 2007

    Some sort of epic event is imminent – what cannot continue will NOT continue. So unless we have invented a new economic paradigm whereby fundamentals no longer matter – all that matters is the next edict from Bernanke (i.e. we believe central banks have created a perpetual motion machine)… then we are going to at some point find out what would have happened in 07 if central banks had not stepped in…

    Central banks continue to step in – yet the house of cards is beginning to crumble… Bernanke will not have to announce ‘the end of QE’ because QE will eventually lose its effect… we are beginning to see the pushing on a string effect… so central banks and governments are coming to the end of the road… and they are completely out of ideas – because there are no solutions to this incredible mess.

    Dalio said it best at the Economist conference some months ago “The EU looks headed for recession – they have tried all tools to try to stay out of recession – so my fear is – when they go back in – how do they escape?” I would suggest that applies to the entire world – including china… they have fired round after round trying to get things back on track – all they have done is delay the inevitable.

    Jon Whitehead former head of Goldman hit the nail on the hit around the time of Lehman when he said “this problem is to massive for anyone to fix – there is no way out”

    I really think it is a mistake to suggest to people that this is simply another business cycle… more useful might be how to prepare for a situation that is going to be far worse than 2007…

  4. I wish I could predict the future as confidently as you do

    AllI can see is what has changed over the past year, the shift in macro activity, and technical changes in market internals and trend

    You should consider yourself fortunate that you know what is going to happen!

  5. [...] Ritholtz sees ‘major cyclical correction’ (TBP) [...]

  6. Mike in Nola says:

    BR: Let’s not be too snide :)

    OTOH, I would like a clarification. Are you confident that there won’t be a repeat of 2007, or is it just that there is no way to tell and you figure that the central banks manipulate the markets to stabilize things if we head in that direction?

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  8. contraguy says:

    I’m inclined to side with Barry, this smells a lot more like a garden variety recession than Armageddon. 2006 was boiling over with insane optimism. It wasn’t just housing – though that was thought to be bullet proof – investors thought they were going to hit home runs in molydenum, rare earths, oil, bubbles were a dime a dozen.

    Where are the bubbles today that are going to pop? Sure, 30-year investment grade bonds are priced at unreasonable levels and the move into REITs and other dividend superstars for income does seem overdone, but mean regression in these areas is unlikely to open the gates of Hell.

    It seems to me that those who expect disaster are either permabears who have fretted about excessive debt and fiat money since, oh, about 1974, or folks who fall into the trap of recency bias – last time the world nearly came to an end, so this time it probably will. I’ll bet that this time around the misery will be of a more prosaic, and less spectacular, variety.

  9. Willy2 says:

    The US has a Current Account Deficit and therefore has a net outflow of money. To stay (financially) afloat the US must entice foreign investors to buy US securities (stocks, bonds, real estate, mortgage backed securities, T-bonds, etc.). foreign investors are NOT going to buy these securities hen the price is going down. That’s why – IMO – one Benny Bernanke is trying to prop up the price of those US securities.

    No, this is NOT a garden variety recession. I still think that the BIG BLOW is still up ahead of us. Taking the US down. And that BIG BLOW is where US interest rates are going through the roof or rise substancially. Enough to scare the wits out of the politicians in DC.

    Actually, I think the “Fiscal cliff” is meant to try to adress the financial imbalances in the US. But it will fail. Because it won’t reduce US deficits, at all.

  10. [...] I have become increasingly cautious on the markets. I mentioned on Bloomberg I suspected this cyclical rally might be ending, and that we were moving from over-weight to equal-weight to eventually underweight equities. My [...]