A slow growth (if at all) economy will lead to a irreversible breakdown in our supply lines, which will result in a social collapse.

In other words, the total breakdown of social order.

A slow growth (if at all) economy will lead to a irreversible breakdown in our supply lines, which will result in a social collapse.

In other words, the total breakdown of social order.

http://www.creditwritedowns.com/2009/05/i-am-ba...

However, some wise-guys keep trying to use it!

I personally feel there is another downward leg to come – the debts have been socialised by the government, we still have to pay for the party we all had for 10 years. I don't think the reality of that has sunk in yet, that a once in a lifetime economic shift has occured. That we in the West will no longer be able to live beyond our means via debt issuance, paid for by the poor workers of the Far East. Increasingly they will want the fruits of their own labours, and we must live by ours, which definitely means a slow relative decline in living standards, possibly an rapid absolute one. To a population used to rising incomes/living standards, this will not be well received.

Just 4 days ago to quote Mr. Krugman : “…the world economy is not showing a hint of recovery….Things are getting worse more slowly….”.
( Reported in Bloomberg on 6-06-09).

Gee I guess all the hints came in 3 days.

The problem really is that people don't think for themsleves – and are afraid to. So they look to these “Ph.d” highly educated “experts” to think for them.

Those Ph'ds and Prize winners are to coin the phrase from John Nance Gardner ( former US Vice-President ) ” not worth a bucket of warm spit”….

Use your own mind – and give what they say no value – you'll come out alot better. I didn't finish high school, yet I understand what is occuring better than they ever could think about knowing.

Arrogant ? Pretentitious ?

Read my Articles published in July and August 2008 on “Housing Deflation” and “King Dollar” at http://www.talentseekscapital.com.

I was Long the Dollar and Short everything else – resulting in a 900% portfolio advance for me in 2008.

The perfect Position in Markets – not Opinion, but Fact.

Where were all the “experts” giving the right advice at the RIGHT TIME – so indeed, what is their “Ph'd's” and prizes really worth ? Zero.

Ed, your blog is one of the few that I will invest my time in……..Read “King Dollar” and the “Housing” Articles – those two articles are worth more than everything else you can read on the Net.

As the Great Jesse Livermore said “….they say there are two sides to everything….but in Markets, there is only one side: The Right Side…”.

My Articles will place anyone who adheres to them on the “Right” side – the only thing that matters. Everything else is irrelevant.

Time and Events have proven that my Position placed me in a small handful of individuals in the entire World who were positioned exactly right and at the right time in the Summer of 2008 when in it really mattered.

The Market is all about Delusion, Deception and Distraction. Mr. Krugman and those like him are at best ignorant and at worst collusive in perpertuating that reality.

The Market will take out the March lows and once it does will set the stage for true fear and true capitulation.

The “Right” side is Net Short or Neutral. However, for those ( virtually all ) unversed in being Short – it is an Art – and one which requires three critical items: Balls, Brains and a Strong Stomach for Drawdowns.

If you don't have that, you are best to be Neutral.

In closing, you hear all the dialogue about the “problems” and “broken” system. Everything being discussed revolves around that. Deception, Delusion and Distraction.

But the truth is the system is not broken at all – in fact, the system is working Perfectly.

The “System” is the Transfer of Wealth to the Hands of the Many to the Hands of the Few.

“Inflation” is where you spend what it is already yours and think it is Capital Gains – “Deflation” is where your Capital actually pays the bill.

That “system” – the REAL System – is working perfectly and will continue.

Truly thinking for yourself and alot of Common Sense is the very best asset and advantage you and your readers could have.

Best Regards,

Charlie Tarango.

Just 4 days ago to quote Mr. Krugman : “…the world economy is not showing a hint of recovery….Things are getting worse more slowly….”.
( Reported in Bloomberg on 6-06-09).

Gee I guess all the hints came in 3 days.

The problem really is that people don't think for themsleves – and are afraid to. So they look to these “Ph.d” highly educated “experts” to think for them.

Those Ph'ds and Prize winners are to coin the phrase from John Nance Gardner ( former US Vice-President ) ” not worth a bucket of warm spit”….

Use your own mind – and give what they say no value – you'll come out alot better. I didn't finish high school, yet I understand what is occuring better than they ever could think about knowing.

Arrogant ? Pretentitious ?

Read my Articles published in July and August 2008 on “Housing Deflation” and “King Dollar” at http://www.talentseekscapital.com.

I was Long the Dollar and Short everything else – resulting in a 900% portfolio advance for me in 2008.

The perfect Position in Markets – not Opinion, but Fact.

Where were all the “experts” giving the right advice at the RIGHT TIME – so indeed, what is their “Ph'd's” and prizes really worth ? Zero.

Ed, your blog is one of the few that I will invest my time in……..Read “King Dollar” and the “Housing” Articles – those two articles are worth more than everything else you can read on the Net.

As the Great Jesse Livermore said “….they say there are two sides to everything….but in Markets, there is only one side: The Right Side…”.

My Articles will place anyone who adheres to them on the “Right” side – the only thing that matters. Everything else is irrelevant.

Time and Events have proven that my Position placed me in a small handful of individuals in the entire World who were positioned exactly right and at the right time in the Summer of 2008 when in it really mattered.

The Market is all about Delusion, Deception and Distraction. Mr. Krugman and those like him are at best ignorant and at worst collusive in perpertuating that reality.

The Market will take out the March lows and once it does will set the stage for true fear and true capitulation.

The “Right” side is Net Short or Neutral. However, for those ( virtually all ) unversed in being Short – it is an Art – and one which requires three critical items: Balls, Brains and a Strong Stomach for Drawdowns.

If you don't have that, you are best to be Neutral.

In closing, you hear all the dialogue about the “problems” and “broken” system. Everything being discussed revolves around that. Deception, Delusion and Distraction.

But the truth is the system is not broken at all – in fact, the system is working Perfectly.

The “System” is the Transfer of Wealth to the Hands of the Many to the Hands of the Few.

“Inflation” is where you spend what it is already yours and think it is Capital Gains – “Deflation” is where your Capital actually pays the bill.

That “system” – the REAL System – is working perfectly and will continue.

Truly thinking for yourself and alot of Common Sense is the very best asset and advantage you and your readers could have.

Best Regards,

Charlie Tarango.

Thank, I'll read your writings tonight.

It is frusterating to constantly see “green shoots”. Things are
better yes because they aren't getting bad as fast. We can appreciate
how you bring us a diachotomy of info.

You do a great job at what you do, thank you for sharing your knowledge.
Sent from my Mobile
.

The question is how long will it be before we get back to the pre-recession level of output. I expect that is a long way off – and if we double dip or miss recovery altogether, even longer.

You mention Mandelbrot. I have been meaning for almost a year to post something on him and the power law. Maybe I will get around to it one day. Apropos, power law, you should see a bad outcome at GM or in Eastern Europe as potential catalysts for a downside scenario that would stop any recovery dead in its tracks.

In the end, it is way to early to make a definitive call. If we do get a recovery by Q4, it is at least 6 months later before a definitive call can be made. That means you are talking mid to late 2010. For investors and businesses that need to invest money or capital, that's way to late. You need to get a read on things today.

The answer of course is yes because you need to see at least 5 or 6 months of growth i.e. two quarters for the recovery call to be made by the NBER.

And again, this is going to be a 'fake recovery' for the reasons you indicate.

An statistical “recovery” for an economist's academic calculations is not a recovery. If GDP prints a positive number later this year, that will not mean recovery. Tell recovery to those who can't find work due to excess capacity and globalization.

QoQ counting of GDP is misleading.

If the downturn was contained to North America then I'd jump on the “green shoots” bandwagon since past recessions have had a duration of 24 months or less. But nothing about this “recession” is contained or a repeat of a normal cyclical recession.

I'll throw out a sound-bite from my software development days. A guy named Metcalf (who also invented Ethernet and started 3Com btw) coined a law that states, “the complexity of a network is a square of all of its connected points.” In other words the complexity follows a power law. Mandelbrot found that power laws also rule economics and contradict the rational market hypothesis (creating those unexplainable fat-tails that black swan seekers knwo so well).

So when folks try to paint this “recession” with the brush from their standard kit they are ignoring the power law that I believe is in play here. The current economic situation is following a power law of all the regions and countries involved. The situation is enormously more complex than previous regional or single country cyclical recessions. The number of variables involved is a at least square, if not a cube, of previous downturns. And I am not forgetting the “Great Depression” in this calculation.

And I think even folks like the twin Dr. Dooms, Faber and Roubini, do not (yet) appreciate the scale of this.

I wonder what Mandelbrot's take on the current situation would be. I suspect it would be something like “bend over, grab your ankles, and kiss your a** good-bye.”