2008 Lookback: Best Calls of the Year
From the Wall Street Journal:
In a year when major stock indexes, real estate, hedge funds, oil, grains, emerging markets, dollar/yen, long/short hedging strategies (thanks to the short-selling ban), high-yield bonds, bank loans, diversification, and the Super Bowl Indicator failed investors, there were precious few “calls” that worked out well.
A year remembered as remarkable for its losses will also be recalled for the uncanny correlation between major assets, as the unwind of leverage forced investors to sell assets that in most environments trade independently of one another. MarketBeat managed to find a few who had it pegged correctly, though it wasn’t easy. If we’re missing anyone, by all means let us know what you think in comments.
1. Short-Sellers. You were right. Everyone else was wrong.
2. Nouriel Roubini. There are plenty who can lay claim to the title of Dr. Doom — those who were bearish in time to save their clients a lot of dough — but for our money nobody explained what was going to happen as accurately as RGE Inc.’s economist. Here’s what he said in February: “To understand the Fed actions one has to realize that there is now a rising probability of a ‘catastrophic’ financial and economic outcome, i.e. a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe. The Fed is seriously worried about this vicious circle and about the risks of a systemic financial meltdown.” Let’s see. That’s, uh, exactly what happened.
3. John Thain sells Merrill Lynch. Mr. Thain, brought in to revive Merrill after a series of miscalculations by previous CEO Stanley O’Neal, cut the firm’s headcount, dumped a bunch of lousy securities at fire-sale prices, and reduced bad exposures. But he saw the writing on the wall in September, and managed to sneak in front of Lehman Brothers to ink a deal with Bank of America, arguing that the healthier firm was the more attractive one for the banking giant. As time passes, we shall see whether this will be viewed as shrewd or panicky, but for the moment it looks like the former. (Does it mean he deserves a bonus? Er, no.)
4. Expecting More Panic: Like clockwork, when the VIX would top 30, investors would buy the market, expecting a natural reversion to the mean. But Steven Gross, a principal at Penso Capital Markets LLC, noticed the options activity in Bear Stearns in March and explained how volatility could give way to more volatility. “There’s a saying on the options floor, that you buy low volatility and sell high volatility, but when it gets very high, you buy it,” he said. “High volatility, you sell, but extremely high volatility is telling you something, and markets tend not to price in that kind of move.” As they didn’t — Lehman Brothers melted down in much the same fashion, and the stock fell further than anyone, other than bearish options types, expected. The VIX jumped to 80 in the fall, and the markets fell dramatically.
5. Patrick Byrne Gets His Due. The quixotic chairman of Overstock.com, one of the more colorful chief executives around, has been pounding the table on naked short-selling for years. This year, the Securities and Exchange Commission finally looked into it and issued stringent rulings. Now, it wasn’t enough that a brokerage shorting a stock knew of the availability of shares to be borrowed – they had to deliver them on time as well, and if they didn’t, they’d be barred from engaging in another short-sale unless the shares had been borrowed already. Of course, Mr. Byrne’s company’s stock still fell 25% on the year, but never mind.
6. Jamie Dimon. The J.P. Morgan Chase chief managed to hold down his firm’s losses and pick up the brokerage business of Bear Stearns and mortgage giant Washington Mutual, both for a song, during the year. In April, after the Bear situation exploded, but before WaMu’s meltdown, he was asked on a conference call about chatter related to Washington Mutual. “We’re not going to comment on it. You should assume we look at everything,” he said. During the firm’s October conference call, Oppenheimer analyst Meredith Whitney told Mr. Dimon that if he believed that markets would soon see a beneficial trend of the Fed’s efforts, he’d be buying riskier assets. He responded that he was, adding that “if you are not fearful, you’re crazy.” To which Ms. Whitney said, “I’m fearful.” Mr. Dimon responded: “We know you are. We’re waiting for you to reverse your position.”
7. Going to the Mattresses: Anyone who was smart enough to take their money out of the market on January 1 and stick it in a drawer for safekeeping is feeling pretty smart these days.
8. Material World: This is what it means to hedge one’s bets. The deals struck by U2 and Madonna with LiveNation when the concert promoter signed the two acts to massive deals included a provision that allowed them to sell $25 million worth in shares at a given point, regardless of the value of the stock. U2 just opted to exercise this clause, and LiveNation is getting stuck with a $19 million bill as a result. Madonna gets her chance in April.
9. Short Oil! Some rested the thesis of $200-a-barrel oil on the massive growth in India and China, saying that such a population jump could not help but produce a permanent plateau in the price of crude. So much for that.
10. Blockbuster withdraws its bid on Circuit City. The movie-rental chain has made a number of missteps, but backing away from this idea ranks among its more astute moments. The company’s stock still stinks — having dropped further since nixing its $1 billion offer for the struggling music retailer — but Circuit City went bankrupt.
117 Responses to “2008 Lookback: Best Calls of the Year”
11. Expecting more Riots across Europe first
Great work Dr. Roubini! As an aside, in upcoming writings please define your stock market call a bit better. You have noted that you see a 15% to 20% decline in the market. Is that 15%/20% down from current levels (which would be back towards the November bottom, in effect, a retest) or is that 15%/20% below the November lows or something else. Better yet, add a S&P500 number, that eliminates all uncertainty. Above all, however, nice job. Your analysis helped me avoid losses for my investors this year. Perchance we meet, I owe you a drink. Enjoy your holidays!
Nouriel,It is time for you to extend your work on the demise of Breton Woods II. 2009 will be the year it all falls apart. The ultimate consequence of the CDS nightmare is that no large corporation can be allowed to fail. Neither can pension plans or states. As the bailouts intensify next year, the reality will start to dawn that printing and borrowing of this magnitude can only mean a debased dollar.
Prof Roubini.Take the rest of the day off.You can have tomorrow too. PeteCA
A story to share:Massive fire in an apartment building located in a suburb of the Twin Cities in Minnesota yesterday afternoon. Entire building completely destroyed; everyone safe (including pets, we’re told) but a complete disaster. All belongings lost.Today’s noon news: anonymous donor gives one million dollars to these displaced families ($17,500 per family); building owner returns their December rent and security deposits.There is hope, indeed, in these dark times.
Prof Roubini … seriously, very best of the seasons greetings to you – and to all the staff at RGE. Your blog went through some up’s and down’s this year, but it has become a much better product. Your Web page has also expanded tremendously in scope. Congratulations.PeteCA
Prof Roubini a wonderful holiday to you. Congrats on all your recognition, it is well deserved. We will need your leadership amd your blog more than ever in 2009. Thanks for making it available.A happy holiday to all the fellow commentators on here – you all cannot imagine know how much I learn from your wisdom and passion.ex VRWC
Another Best Call of the Year: RGE decision to OPEN this site.I know several guys that are making money speaking about this monumental mess/crisis but I do not know many guys that allow others to criticize their ideas.I expect this site remains opened in 2009 for we the people to discuss the world problems.
Better: To become open forever!
Prof. Roubini: Thank you for shareing your knowledge on a great web site.
I keep hearing a radio ad,and TV, about “reduceing” one’s credit card dept. This one ad has a person with 15K dept reduced to 3K!!. Don’t you just love TARP money!!
I was somewhat impressed with Doug Kass’ 2008 predictions and look forward to what he has to say about 2009 – in the meantime he has made a call on housing and suggests it will stabilize by mid 2009 – Note: Kass holds Jim ‘Mad Money’ Cramer in very high esteem, which almost caused me not to post this.
Thanks Dr. R for your wisdom and unselfishness. Thanks also to the many contributors (PeteCA, OR, MA, and many others…) to this blog. You have no idea how much you have contributed to my well being and the future prosperity of my family for your insightful thoughts and comments.Merry Christmas!PKB
http://www.youtube.com/watch?v=P7txCdLCP9U.merry happy peace..turn it up. repeat often.
PKB took the words right out of my mouth. Everything he said, squared.Thank you Dr. Roubini.John
I realize this is like an Xmas card thread but I posted my greeting on the previous one. Notwithstanding there is this from Bloomberg:Bush Cancels Pardon After Campaign Donation Disclosed (Update2) link
Santa comes early for Cerberus link
Good job job in 2008. My wife and I read RGE “Roubini Group Entertainment” from the first electron to the last. You folks are the best thing since sliced credit default swaps.
I repeat a comment I made on the last thread about Madoff. The article mentioned points out the impossibility of his ponzi scheme. This is just a front so that his rich clients who lost money can take advantage of certain laws to make good their losses by bilking the taxpayer. It seems highly plausible to me at least. His guilty plea is just a very clever scam.http://tinyurl.com/madoff-double-bluffBy the way, Happy Holidays to all.
Happy Holidays to Dr. Roubini and everyone here! I wish you all the best!
.. it’s early in the morning and i’m ready for a bowl of surreal.@.. wall st. journal #8.u2..madonna. exercising options ..etc.the more relevant and n.r. pertinent entertainment story of2008 would be this presentation, tom waits press conference, announcing his 2008 spring tour.i suspect his product and business model will also be more relevantin the near future. an instructive lesson in “show biz”, marketingand a good laugh. notice tour title ” glitter and doom”. “material world” my ass. yes, i’m saying they missed the story and got it all wrong as only the CM can. at least with regard to #8..http://www.youtube.com/watch?v=EOrG1r3S6ZA.speaking of CM. in wonder and amazement i watched on channel 4, simulation of a satellite feed of Santa and his reindeerflying over the white globe, delivering presents to all the good boys and girls. meanwhile, in Tennessee, one of the largest environmental disasters in the history of this nation has been happening for more than 48 hours and the CM have not seen fit to mention it. “who are the trusted?” n.l.”clean coal” coming to a country near you.at some point the media will report on it i supposebut if they don’t just google “tenn disaster”.the economic impact of this environmental disaster?is there tarp money for actual, non paper or fictive- virtual, disasters?probably not. insurance? federal response?is it just too horrific to mention at this critical time? maybe they are saving the story for the headline later this morning?now it is the 25th. and i can say merry Christmas.
Madoff apologizes! Start watching at 5:35. Merry, Happy, and Thanks to all who contribute to this wonderful, fabulous place.http://www.youtube.com/watch?v=mCiFau9_0QU
@ ..http://tinyurl.com/madoff-double-bluffBy the way, Happy Holidays to all.Reply to this comment By Pecos Banker on 2008-12-24 23:03:36″So why plead guilty? The answer is simple. Look on the net and you will see that because this case is being labelled a fraud, it would appear that investors are going to be able to claim their investment back under the US government’s financial fraud protection scheme. A judge has already given his approval in principle for compensation, w ithout any evidence having been presented and financial fraud being demonstrated in a court of law. And it would appear that there will never be such a demonstration in a court of law. Why? It would appear that all the funds financial records are mostly “missing” (rather like Dov Zakheim’s US$1.4tn) and those few records that do survive are in a terrible mess.However, since the guy has pleaded guilty we do not need to demonstrate the fraud, because he says he is guilty.And look further on the net and you will see that these “victims” have also been told by the US tax authorities that they will probably also be entitled to claim back some taxes on these defrauded sums.Rather than saying this hedge fund has gone bust, due to its choice of investment assets and investment methologies, a scenario which is highly probable in the current financial paradigm, since all the professionals are predicting that at least 30% of all hedge funds are about to fail, more than 700 of them, the CEO chooses to fess up to fraud. If the CEO admits the fund has gone bust, then all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer, just as they are also drawing money back from the tax payers with the other hand.”..i need another bowl of surreal.
Merry Christmas everyone!!!Thank you Prof Roubini for your intelligent insight and for this Forum. May all of us (Commenters) appreciate the insights & ability to discuss with like-minded people the macroeconomic and political issues that matter. I’ve certainly learnt SO MUCH from reading http://www.RGEMonitor.com since 2005. I’m Truly Greatful.I hope you enjoy a lovely Christmas Day!
pb, where did the original money dissappear to?any indications? hunches, guesses, clues, wild speculations, information? stashed?
http://www.tva.com/environment/land/index.htm.don't read this till jan 2, 2009. especially the nrc request part…Land ManagementTVA is responsible for the management of 293,000 acres of public land and 11,000 miles of public shoreline in the Tennessee Valley. In carrying out its land-management responsibilities, the corporation is guided by its mandate to consider the effects of its activities in such areas as land reclamation, public recreational use, economic development, and wildlife preservation.TVA Land PolicyTVA’s Land Policy was approved by the TVA Board of Directors on November 30, 2006. This policy governs how land is planned, including whether it is disposed of or retained. When the Board approved the new policy, they also directed staff to review TVA-managed land designated for recreation and economic development purposes to verify the suitability of the properties for this use. That review is now complete and comprehensive information is available.Wildlife HabitatMore than 181,000 acres of TVA land have been set aside for natural resource management, including the enhancement of wildlife habitat.ReclamationLand reclamation has been a part of TVA’s activities since the agency’s founding in the 1930s, when the Tennessee Valley suffered severe soil erosion caused by unwise farming practices. TVA’s reclamation efforts, particularly in the Copper Basin, have earned national and international recognition.ShorelinesIn 1999, after extensive environmental review and public comment, TVA inaugurated its Shoreline Management Policy to improve the protection of shoreline and aquatic resources while continuing to allow reasonable public access to both.Land UseTVA encourages citizens to comment on proposals that involve any change in the use of the public lands under its management. When such a change is requested, whether by a governmental body or private citizen, TVA issues a land-use action notice seeking comments on the proposal.For information on using TVA shoreline property or public land, or to get involved in TVA stewardship activities, contact the Environmental Information Center..Information for InvestorsCorporate GovernanceLearn about TVA’s commitment to corporate accountability, auditor independence, and financial disclosure.News ReleasesRead the latest news releases from TVA, including those on corporate and financial news.Investor Information of InterestTVA Reports Increased Operating Revenues in 2008TVA Board Approves Program To Enhance Economic DevelopmentTVA Board Approves 2009 Budget, Rate AdjustmentTVA to Restate Financial ResultsTVA Names New Transmission ExecutiveTVA Prices $500 Million of 30-Year Global Power BondsTVA Reports Second Quarter ResultsTVA To Reset 1998 Series D (TVC) PARRS Power BondsTVA to Redeem Debt SecuritiesTVA Board Approves Project To Reduce John Sevier EmissionsTVA Agrees To Purchase Southaven Natural Gas Power PlantTVA to Reset 1999 Series A (TVE) PARRS Power BondsNew TVA Board Member Gilliland Sworn InTVA Prices $1 Billion of 10-Year Global Power BondsTVA To Redeem Debt SecuritiesTVA Board Approves 7-percent Rate Increase Effective April 1TVA Reports Net Loss for First Quarter of 2008TVA To Redeem Debt SecuritiesTVA Prices $500 Million of 40-Year Global Power BondsTVA to Redeem Debt SecuritiesTVA Reports Increase in Operating Revenues, Net Income in 2007Hydro Generation Remains Below Normal, Purchased Power HigherTVA, NuStart Submit Application to NRC
Doc,I found you hiatus from CNBC after you rang the alarm a couple years ago amusing. Now they all want to go to your parties. Me too but I’d have to bring my wife, which would seem to defeat the purpose, kidding. Thanks for your steadfastness and concise explanations. Happy Xmas from left coast wine country.
http://clipmarks.com/clipmark/26C4AF4B-9314-4210-B379-01FB40BF0194/Monday, more than 500 million gallons of toxic coal sludge burst through a retention wall in eastern Tennessee, causing massive property and environmental damage and leaving residents holding their breath over possible long-term consequences. Environmentalists said the spill was more than 30 times larger than the Exxon Valdez oil spill. The incident underscored the false nature of the “clean coal” propaganda. In an interview with NBC Nightly News, Elliott Negin of the Union of Concerned Scientists explained:——————————————————————————–This disaster shows that the term ‘clean coal’ is an oxymoron. It’s akin to saying ‘safe cigarette.’ Clean coal doesn’t exist.——————————————————————————–The New York Times writes, “Even as the authority played down the risks, the spill reignited a debate over whether the federal government should regulate coal ash as a hazardous material. Similar ponds and mounds of ash exist at hundreds of coal plants around the nation.”.http://www.tva.gov/environment/index.htm..Protecting Our EnvironmentAs the nation’s largest public power producer, TVA recognizes that the environmental consequences of its operations are far-reaching. By continually working to improve its environmental performance and taking a leadership role in clean-energy development, TVA helps safeguard our natural resources for future generations.Answers to Your Environmental QuestionsTVA’s new Environmental Information Center provides a single source for answers to questions about shoreline land use, permitting procedures, water quality, recreation, and other issues related to the environment..http://push.pickensplan.com/profiles/blog/show?id=2187034%3ABlogPost%3A1654737.There was a huge and terrible environmental coal-related disaster in Tennessee yesterday (Dec 22 2008).The Tennessee Valley Authority, better known as TVA, has a coal-burning power plant located near Harriman, Tennessee, along Interstate 40 between Knoxville and Nashville. The stuff that is left over after TVA burns their coal is called coal ash. Coal ash contains mercury and dangerous heavy metals like lead and arsenic – materials found naturally in coal are concentrated in the ash.TVA has a huge mountain of this coal waste material stored in a gigantic pile next to their Harriman (Kingston) power plant, alongside a tributary of the Tennessee River.On Monday morning Dec. 22 around 1:00 am, the earthen retaining wall around this mountain of coal ash failed and approximately 500 million gallons of nasty black coal ash flowed into tributaries of the Tennessee River – the water supply for Chattanooga TN and millions of people living downstream in Alabama, Tennessee and Kentucky.This Tennessee TVA spill is over 40 times bigger than the Exxon Valdez spill in Alaska, if local news accounts are correct.*** This is a huge environmental disaster of epic proportions. To see an amazing aerial video of the spill – the big hunks and chunks in the river are mounds of coal ash:http://www.youtube.com/watch?v=rGmVCABMRRQThere is better aerial footage but you have to watch an Applebees commercial first – go to the link below, then scroll down to the “Most Popular” section and find the button that says “aerial footage”http://www.wbir.com/video/default.aspx?aid=74330The local media are downplaying the spill, but the Nashville newspaper (The Tennessean) has a decent article, posted below. When I first saw the 300 million gallon Martin County coal sludge spill in Kentucky in October 2000 I was outraged. I was sure that it would be a national news story, but it never was, because the coal companies and local law enforcement blocked the road leading to the spill and kept the media out. The national media was confused because they didn’t know what “coal sludge” was. And ….the big national environmental groups didn’t do enough to bring media attention to the Martin County disaster.Thats not going to happen this time, because we have1. You Tube2. Bloggers3. Digital cameras4. You!
Dear Prof. Roubini, Congratulations on being, uh, exactly right. Wish you a Happy and Prosperous New Year ahead.It was my pure luck catching onto #3, #7 and #9 above , uh, exactly in that order! All credit to Prof. Roubini and a lucky early ‘put’ on my house in Spring 2004.Now thanks to Ben, I get to stuff more USD under the mattress. The logic is simple: just as Saudi Arabia can kill its oil selling competitors buy flooding the market with oil, the US can kill its other currency issuing competitors buy flooding the market for reserve currency. Let the others try staving off a deflation.Which do you really need now? The US Dollar or a gallon of oil? Here’s a hint: Ain’t buying a car so no need for the oil now.May the USD be with you!Wish all on this board Hearty Greetings for this Season and some added Alpha in the year ahead!P1AQL aka Prt1stAskQLater aka Print First Ask Questions Later.
Wednesday, December 24, 2008 5:00 pmPublic Affairs.http://archive.wbai.org/index.php.macro news as it relates to world population, available food, ocean resources and world bank modeling. and we ignore spilling mercury, lead etc. into the waters? priorities. systemic banking, yes, that’s the thing. managing and maintaining heavy loads of debt for the masses, very important.what better way to destroy productivity and creativity.
d, my mom used to give me them ambidextrouscompliments too.
As I traveled down I-95 from the Catskills of upstate NY, to Northern Virginia to see my new grand daughter, I wound up buried in traffic that had more volatility than the VIX index. Drivers with grim looks on their faces pushed their vehicles so their bumpers were only a few feet from one another and the speed of the traffic went quickly from 80 mph, to 0 mph and back again. It made NASCAR seem like a kiddie ride. As I sat there not moving, I fantasized about a light, high speed train zipping down the center median, and how much I would rather be on it then where I was. It became my Christmas wish. Time to get tough Obama. Yes we can!
In ambidexterity we lead the world!
It finally made it to the NY Times. Heavy metal poisoning! That’s baroque.
d, god bless.
Professor,Congratulations on what has probably been the best year of your life! I came to this site in late 2006 following a Barron’s recommendation for RGE Monitor as the best economics website. I have not been disappointed! Despite the competition, IMO, you still have the best economics site and have increased your lead in the race by several laps. The amount of information the little guy can get for free at your site is truly amazing!Enjoy the holidays and do party much, but keep an eye on the paparazzi!Happy holidays (merry Xmas, happy Hanukkah, or whatever you celebrate) to all the readers of this blog.Me I keep trying to minimize uncertainty by reading as much as I can. My conclusion from my reading the couple of weeks is that we are entering the “next leg down” in this crisis, and that Goldilocks, as usual, are late in recognizing this. They will be in for a shock. My conclusion is that the best strategy is to make my life cozy and easy by mainly staying in cash. I have nibbled into some “risky stuff” but have promised myself not to indulge in risk taking. But as you are about to see, it seems that my business is the same as Cool McCool’s: http://www.youtube.com/watch?v=Ait8WKjryGIIt looks like after 9 years, I have finally recovered my cojones and went heavily short APOL*(4% of assets) on the eve of Xmas (i.e., yesterday).IMO, this short is a dangerous one, far from being “a sure thing”; at least one of Julian Robertson’s “students”" is long the stock. I check the financials and everything looks OK there. They are not tampering with the books, historical cash flow growth is real. The key bull story is that as the unemployed retool they will flock into University of Phoenix to retool.My key rationale for shorting is that this is a BAD business that rips people off (or whoever it is that pays for their education) charging big bucks and giving people a less than mediocre education that qualifies them for nothing in a competitive market place.Right now APOL is fighting for re-accreditation, getting a month by month, “extension” until a final decision is made. Since in many ways we, as a country, have lately trended toward mediocrity instead of excellence; I would not be surprised if they get accredited and Obi dumps some BIG bucks in the form of wasted student loans their way, in which case I will have to cover.Take a look at the legal fine print (i.e., risk factors) in their latest 10K.http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6212739-131890-233567&type=sect&dcn=0000950153-08-001796* I amm short the stock. I considered options but even though they are less risky they are too expensive to really profit from the demise of this junk business.
Correcting some of the main typos:My conclusion from my reading the [last] couple of weeksThe key bull story is that as the unemployed [try to] retool they will flock into University of Phoenix.Right now APOL is fighting for re-accreditation, getting a month by month “extension” until a final decision is made.* I am short the stock. I considered options but even though they are less risky, they are too expensive to really profit from the demise of this junk business.
What a mediocre and stupid guy Bush is. I cannot wait for Jan 20 anymore:-)
Thanks for spoiling the Xmas celebration:-) Just a joke, thanks for the article. I wonder how much Cerberus contributed to the presidential campaigns (not just the little stuff we can see but the BIG stuff we the little guys do not see).
d,.i’m just wondering, ya know, how long it is going to be before the regulatory authorities are going to be forced by law to post and label sea food consumer products as hazardous, consume at your own risk, anti-nutritional items. ?? new world order and all that. the new baroque. nuevo baroque, if you will? some investment opportunity here? some way to speculate on this?.dan, do check out the “press conference”..http://www.youtube.com/watch?v=EOrG1r3S6ZA.hilarious and ahhhh. intelligent.??
I am not so sure people will get money beyond SPIC insurance coverage. Please stop trying to spoil our Xmas celebration:-)
I wound up buried in traffic. The wonders of cheap gas! Bet you if gas was over four bucks per gallon, you probably would not have witnessed much traffic as many drivers, possibly including yourself, would not have driven.
I wasn’t very impressed by Kass predictions. To me, he comes across as a guy of very average smarts. Shilling and the Prof. did much better. You could have made a lot more money from their predictions than Kass’. Of course, Kass predictions seem more specific but in a closer look you will realize they are not.
The ReckoningOnce Trusted Mortgage Pioneers, Now [Billionaire] PariahsBy MICHAEL MOSS and GERALDINE FABRIKANTPublished: December 24, 2008http://www.nytimes.com/2008/12/25/business/25sandler.html?pagewanted=1&_r=1&hpI threw in the extra word in the title. I doubt the Sandlers loose much sleep over this. Just another Xmas Grinch!
o, i agree, never let tragedy spoil a perfectly good sun rise or sun set. rock onbro..
Will Wall Street Crisis Spur Anti-Semitism?October 16, 2008http://www.jewishexponent.com/article/17379/Former bank owners Marion and Herbert Sandler were satirized in a “Saturday Night Live” skit as “people who should be shot.”JTA Photo And this was written before Bernie the Grinch stole Xmas!
d,.this particular comment. yes, i will not stop laughing as i do enjoy the brilliance of the baroque. blue and gold, minimal “illusion” of depth. true.
Hello,I am following RGE from Istanbul. I wish you the best.AND I EXPECT TO HEAR SOME GOOD NEWS FOR 2009HAPPY NEW YEAR.
g,.the good news is the main economic thinker of the day is from turkey. that is it. the rest of the news, no one wants to hear. ride it out and drink heavily and you will be fine.
The mediocre and stupid take offense at your comparison of Bush to them.
So what do they do in Argentina for the 25th? Has the white-northern-man-in-red-suit myth made its way down their?
It’s a mess. I live a few miles away.
OR we get the message – the Sandlers and Madoff are Jewish Grinches stealing from honest Gentiles.You can let it go now.
I wish to extend my thanks and best wishes to NR for providing a wonderful free website for all those who are deeply concerned about the economic future of this world. Best wishes to all for a Happy Holiday!
Rail Takes Back Seat as States Target Obama Stimulus for RoadsDec. 24 (Bloomberg) — Missouri’s plan to spend $750 million in federal money on highways and nothing on mass transit…http://www.bloomberg.com/apps/news?pid=20601103&sid=aV2SxqQRuOFw&refer=us
UA solar institute plans Phoenix siteTucson, Arizona | Published: 12.14.2008
The Arizona Research Institute for Solar Energy, a solar research and development program of the University of Arizona, is planning to develop a solar research park in Phoenix.The non-profit project, dubbed the Riverpoint Solar Research Park, will be funded by the University of Phoenix and Southwest Solar Technologies, Joseph Simmons, director of AzRISE, said at a technology industry event. The University of Colorado also will collaborate on the project.http://www.azstarnet.com/business/271512
Seems to me that if GMAC can become a bank, the U of Phoenix should have no problem obtaining full accreditation. The term green washing comes to mind – and it would appear that O’s plans for a green revolution will require green workers.What is so tragic in all of this is that the trillions of dollars that will be spent to try and prevent climate change could instead be spent on the impacts that climate change will have on on the billions of people that will be impacted (unless of course one subscribes to the theory that climate change has been caused by humans).
Fund Manager (J. Ezra Merkin, the chairman of lender GMAC) Ordered Not to Destroy Madoff Documents DECEMBER 24, 2008, 5:45 P.M. ET
At a hearing Wednesday in New York state court, J. Ezra Merkin, the chairman of lender GMAC who runs funds that were invested with Bernard Madoff, was enjoined from concealing or destroying any documents related to Mr. Madoff…. Read More
By order of the Board of Governors effective December 24, 2008.FEDERAL RESERVE SYSTEMGMAC LLCIB Finance Holding Company, LLCDetroit, MichiganOrder Approving Formation of Bank Holding Companiesand Notice to Engage in Certain Nonbanking ActivitiesVoting for this action: Chairman Bernanke, Vice Chairman Kohn, and Governors Warsh, and Kroszner. Voting against this action: Governor Duke. Read More
FEDERAL RESERVE SYSTEM LLCUnited States Government LLC
I see the ground work being laid for compensation to other investors of hedge funds that will go bust this year. I bet you thought all those donations to campaigns did not pay off, well they do and this will not be the last time compensation will be paid to those who did well on their investments until they didn’t. Keep spending the tax payer money on everything under the sun and I guarantee you that we the people will vote for either the Democrat or Republican Party again and again as there is no difference between them except in our own imagination.
An outstanding article/blog that provides some insight and metrics vis a vis where things are it in the credit markets.Credit Crisis Watch: Signs of ProgressWed 24 Dec 2008 – Prieur du Plessis
“…In summary, the TED spread, LIBOR-OIS spread and GSE mortgage spreads have narrowed markedly since the recent record highs. Furthermore, the CDX and iTraxx credit derivative indices have mostly shown a solid improvement over the past few weeks. However, US Treasury Bills and high-yield spreads are still at distressed levels.Although the Fed and other central banks’ actions have resulted in some progress being made to fix the broken credit machine, the thawing of the credit markets still has a considerable way to go before liquidity starts to move freely and the world’s financial system functions normally again. Read More
I saw a great film at a conservation film festival about a month ago. It was called “Burning Our Future.”It is stunning what they are doing to appalachia in the name of a quick buck. It is a crime and a sin. My thoughts go out to those who lost their homes because of this.
Good points. I’ve been waiting 10 years to short this piece of trash but I may still be early:-)
I’m not sure that those hedge funds are going to fail. Didn’t they just get permission to borrow money interest-free to keep them afloat?
That is your conclusion, not mine. BTW, The link above is from a Jewish publication. The Mad-Off Grinch theme has been prominent in the media starting with Bloomberg which is also a Jewish name. Gee, you know, I don’t even know if I have some Jewish blood myself but for some reason most of my close friend s are Jews. I was raised in Venezuela, a melting pot where we don’t care much about those things.It is only natural that Jews being so prominent in the world of finance and banking many of the crooks turn out the Jews. This does not mean Jews are any more or any less likely to be crooks than the general population. It is just that they comprise a high % of the people in banking and finance so it is only natural that a high percent of the crooks in banking and finance turn out to be Jewish.I am pretty sure you must also be aware of the high standing of Jews in economics; starting with the Professor and continuing with Greenspan, Bernanke, Phelps, Krugman, etc. Some of the smartest people in the world are Jews and that is a great thing. One of the things the world desperately needs is more smart and compassionate people.
Yes they have Santa here too but with the hot summer weather it doesn’t make much sense:-)
I too am horrified that the corporate media hasn’t been covering this awful tragedy in beautiful Tennessee. It is an outrage. Is there anything that can be done to help? I’m spitting nails.
This is happening in Minnesota, too, Hayes. Light rail projects here being shelved. Absolute sheep dip.
Now then! Mr. Bush is neither mediocre or stupid. Let’s not indulge in attacks ad hominid (spelling) on this wonderful day. Rather, lets think of the current president in a more flattering manner; like an Alzheimer’s patient he makes new friends daily and can hide his own Easter eggs.
we are being deceived.i have lived through several recessions and there wasn’t this degree of doom and gloom associated with any of them. my dad, mom and grandparents went through the great depression and none of them ever mentioned it; it came, it went and life continued.what is so different about this downturn that has everyone in such a panic?henry paulson’s initial request for 700 billion dollars seems more like a ransom demand: sudden and done without any consultation with the president or relevant members of congress. it’s as if america, a country with nuclear weapons and the means and will to use them, was suddenly threatened with destruction unless the money is handed over.and the animosity shown towards the auto industry is even more baffling. the theory that it is aimed at destroying the autoworkers union makes no sense in a country where less than 15 percent of the work force is unionized. if consumer confidence is essential to our economy why would several million people be threatened with the immediate loss of their jobs?something else is going on here. and it is not what we are being told.
Best Wishes for a A Very Merry Christmas and A Happy New Year to all!SWK
An excellent one on AIG from Fortune:http://money.cnn.com/2008/12/23/news/companies/AIG_150bailout_Loomis.fortune/index.htm?postversion=2008122411
your parents didn’t have the Internet to drive them crazy!:-)
…The endpoint, in fact, could be stretched way out by one special AIG troublemaker: a complex noninsurance operation that nobody thinks can be sold but that instead needs to be wound down, a process apt to be both lengthy and expensive. This albatross is AIG Financial Products – FP for short – which is housed in a division called Capital Markets. FP was formed 21 years ago to trade over-the-counter derivatives, and it proceeded to ride the great boom in that business. For most of its history, FP gave longtime CEO Hank Greenberg profits on cue, helping him build a great record of earnings growth – until this streak was rudely smashed several years ago by earnings restatements that involved practically every corner of the company, FP included.Worse, even as those humiliations were surfacing (and leading as well to Greenberg’s departure), AIG got deeply involved with mortgage securities that all too soon were identified as toxic. A nutty investment policy at the company’s insurers helped create this problem. But the true agent of doom was FP, which wrote close to $80 billion of credit default swaps – contracts that insure investors against losing principal and interest – on super-senior tranches of collateralized debt obligations (CDOs) that were loaded with mortgage securities, some of them subprime. A financial tsunami then engulfed AIG, which is structurally a holding company – the parent of a webwork of operating insurers. The CDOs fell in value, and credit ratings for the parent company went down with them. This drop in AIG’s creditworthiness triggered clauses in the credit default swaps (CDS) that allowed AIG’s counterparties to demand collateral, and those calls for cash put the parent in a vise. There you have the internal situation that, in time, shoved AIG into the arms of the government.The external situation is that AIG may have landed in that house of refuge because Lehman Brothers didn’t. In the crisis-ridden week leading up to Monday, Sept. 15, the government decided it could not or would not rescue Lehman but instead would let it go bust. Bankruptcy court records have since shown that Lehman had 900,000 derivatives and financial contracts with other parties, and each creditor holding these realized on Monday morning that its check wasn’t going to be in the mail. The hazy financial concept called “systemic risk” immediately became hard reality. Credit markets froze worldwide and stayed frozen on Tuesday, which is the day when AIG was headed toward bankruptcy but didn’t get there. The theory around, which all of financialdom seems to accept as received truth, is that the government realized by Tuesday that it had erred grievously in letting Lehman go down and knew that it could not compound the error by allowing AIG to fail a day later.So AIG lived to become a government ward, and in that guise it is unique. True, it is an infamous match for Fannie Mae and Freddie Mac, which are also owned 79.9% by the government. But the world always knew these fraternal twins to be the unacknowledged children of the feds. Until September, conversely, AIG never had the slightest look – at least publicly – of a company that would need government help, much less emergency rescue. Visualize, in fact, a “too big to fail” list, or as the term often goes in these days of derivatives, a “too interconnected to fail” list. Had several smart, informed, worldly businesspeople been asked in 2007 to name the five top contenders for that list, probably no one would have placed AIG on it. Among onlookers, therefore, AIG’s sudden collapse – and its need, my God, for $150 billion! – tends to be one of the great bafflements of the credit crisis. In statements about why it bailed out AIG, the government has simply muttered “systemic risk.” But it has never explained why it took this threat so seriously, and the New York Fed, the government’s foster parent for AIG, wouldn’t discuss the company at all with Fortune.…
What you are not being told is that the US is going to default on its debt.
…To get warm bodies for that team, Reynolds pulled in help from AIG’s operating companies. These are a spread-out collection of silos linked to a holding-company center that is staffed with relatively few people – too few for the job at hand now, say both Reynolds and Liddy. Of course, Greenberg never clustered people at his side. He ran AIG out of his head, seemingly unfazed by an accounting system so inefficient that AIG is notorious among ex-executives for always getting just under the wire when making its SEC filings. The accounting systems plagued the CEOs who followed Greenberg – Sullivan and Willumstad – and remain a trial today. Says Reynolds: “The best businesses are run by people who kick their tires every day. We don’t even know where the tires are, much less get to kick them. If we can get back to the size of a company where we can intelligently kick our tires every day, that would be a wonderful outcome.”The misadventures that AIG’s silo architecture can create are sharply illustrated by the company’s disasters in mortgage securities. These problems certainly were spawned in AIG Financial Products. But the fact is that FP had a moment of enlightenment in late 2005, when it began to believe that the housing boom was nearing an unfortunate end and decided to stop selling credit default swaps on super-senior tranches of CDOs. It had a few deals in the pipeline, however, so total “multisector” CDS – AIG’s name for these spiffy items – climbed a bit further in early 2006, to a total of nearly $80 billion. Later, as 2006- and 2007-vintage mortgages turned toxic, AIG talked proudly to analysts about its wise decision to pull out before trouble hit. The company proved to be excruciatingly wrong in thinking it was safe, of course, since earlier vintages have been creamed too. But the point is that by August 2007 – the start of the credit crisis – CEO Martin Sullivan and FP’s boss, Joseph Cassano, were saying to everybody who’d listen that FP had ducked the mortgage bullet by avoiding the 2006 and 2007 securities that were by that time viewed as poisonous.Various other AIG silos, unfortunately, weren’t listening. The regulatory statements filed by AIG’s operating subsidiaries show that a raft of these companies, and particularly the life insurers among them, were still loading up on late-vintage residential mortgage-backed securities (RMBS) in December 2007 – months after AIG had begun congratulating itself on ducking the mortgage bullet. Why, Liddy is asked, would one arm of AIG be buying mortgage securities while another is pronouncing them dangerous? As if there might be someone in AIG’s empire he didn’t care to offend, Liddy states his answer carefully: “You know, the company is a highly decentralized, far-flung enterprise. And different pieces of the company took different risks. Let me just leave it at that.”…
Happiest of holidays Professor and my fellow bloggers.Mercifully, the ER is Q-U-I-E-T shhhh! Don’t tell anyone.Here’s to us…..
@OR – interesting article on TBT link interesting comments as well on that article
Now thats some Christmas cheer.
“Among onlookers, therefore, AIG’s sudden collapse – and its need, my God, for $150 billion! – tends to be one of the great bafflements of the credit crisis. “Seasons Greetings All.Yes OR, this regularly comes to my mind. The speed and force with which the AIG “situation” was dealt with, something so quickly after LEH indeed does baffle. It is absolutely certain that much is being unsaid about this crisis but non moreso than the AIG affair.There are many ways in which Govts try to manipulate circumstances. I’m forming the opinion that buried deep within the bowels of AIG are a number of very dark and ominous operations with clear Govt connections. Could the whole period of growth between 2002 and 2007 be a shimmera? Big games are being played.God only knows what they are or being used for and by whom. But my assumption is that it actually IS systemic in its implications.If one needs evidence of how fragile the system truly is, look no further than AIG.
GSM: That kind of action – that fast – probably means that either JPM or Goldman Sach are holding counterparty risk to trades at AIG. Just speculation, but it would make sense.PeteCA
I agree jimmie. Don’t listen to what they say, concentrate on what they do. Follow the money. I’m working on my own theory, and I’m sure you can come to your own as well.http://www.guardian.co.uk/world/2001/oct/31/september11.usa4
I had a sobering thought today as I read the news story re: Israel preparing to invade Gaza. This is, of course, a result of the Palestinian militants firing more than 200 rockets across the boarder into Israel. It is a totally predictable response, and comes after the Palestinian militants refused to renew a month’s-long cease-fire agreement.Now, I am generally one to require very substantial evidence and argument to be convinced of a conspiracy, but the pieces fall into place pretty obviously on this one, so I wonder if anyone can provide insight… here’s my theory:With the price of oil now well below the level required for Iran to sustain it’s economy, and with Russia in a similar situation; andWith OPEC’s inability to convince the market that production cuts should increase the price of oil; and thusWith oil continuing to slide in price with no obvious mechanism to reverse the price slide, and with downward pressure mounting as the global re(de)pression builds momentum…Iran and Russia are looking to “shock” the oil markets by introducing risk premium back into the equation.The timing would be perfect, as an intervention into the Israel/Palestine conflict by Iran – (either explicitly or implicitly) backed by Russia, would have implications that the Bush administration would be unable to contend with. There would be no time, nor political clout, to mount a serious response before Jan. 20. In transition, the US would be slower to respond (at least in theory). Iran and Russia may, thus, be counting on the confusion of transition to create an event that would go unanswered, but nevertheless, create a new and long-lasting risk premium to oil.The intended result would be a sharp spike in oil prices that would stabilize both governments, while simultaneously weakening the US.If this were to play out, Israel would need to fill its part in the script by invading Gaza. Iran would then generate an act of aggression against Israel or in “defense” of the Palestinians. Russia may then come out in support of Iran’s actions.Is this just my paranoia?
We the little guys never find out the truth behind government actions; they treat us like dummies. We are supposed to pay our taxes and shut up; and if you make too much noise they do have the power of ruining your day:-)
Time to go to bed so just a short answer that focuses on TBT. I sleep a lot better on my TBT holding, which I will increase if it moves my way in the next few days, than my APOL short. The argument for higher T rates is a solid one. And even if it wasn’t the volatility in long Ts of the last couple of years will come back and that will give us a chance to make money. I used to go long when the 10 yr T got above/close to 4% and sell when it got close to 3%. This time around I decided to play the game on the short side as yields are down instead of waiting for them to go up and then go long.
India, Pakistan: Signs of a Coming WarDecember 24, 2008 | 2002 GMT Stratfor
Several major signs of a coming Indian-Pakistani war surfaced Dec. 24.Indian troops reportedly have deployed to the Barmer district of southwest Rajasthan state along the Indian-Pakistani border. Furthermore, the state government of Rajasthan has ordered residents of its border villages to be prepared for relocation. The decision reportedly came after a meeting among the state’s director-general of police, home secretary and an official from the central government. Stratfor confirmed the report with an Indian army officer.According to India’s ZeeNews, the Pakistani army replaced the Pakistan Rangers that regularly patrol the border with India. The Pakistani troop movements were later confirmed by U.K. Bansal, the additional director-general of India’s Border Security Force (BSF) in Barmer, Rajasthan.As Stratfor reported Dec. 22, there is a high probability of India using military force … Read More (google cache of this subscription service)
Note: Stratfor is a credible intelligence source
Thank you, Dr. Roubini. It is difficult to speak the truth when nobody wants to hear it.
“There are no passengers on Spaceship Earth. We are all crew.”Marshall McLuhan
Nouriel… Where’s the love???”How about any call Miss America made” being in the top 10???Here’s the latest:With love… Miss Americahttp://www.rgemonitor.com/globalmacro-monitor/254883/merry_x-mess__happy_2000000000009
Congratulations, Professor Roubini, and thank you for providing the information that made me get smart (WSJ #7). I only wish my colleagues had listened when I told them they should read RGE Monitor.
during the first Great Depression, USA was not as deeeeeply in debt as they are now.
Retail sales plunge 8% in December.http://online.wsj.com/article/SB123025036865134309.html?mod=rss_whats_news_us_business
Yes, this is just paranoia. Do you think that the current oil price is realistic, and Iran and Russia want to artificially bump it up? The fact is that the current price is insanely low. A lot of oil development projects are canceled, which will cause serious shortages in a few years. It would be everybody’s interest to have the oil price around 80-100 dollar. I think that in 2 years we will see 200 dollar oil, because of the lack of investment.
Professor Roubini thank you so much for your information they made us see the truth.USA will be suffering from a deep recession and Governement is trying to promp up the economy by printing money increasind the balance sheet of Fed.I would suggest something different though. As the governements of Third world countries to creat new sources of finance you need to do privitisations.In this case if i were Barrack Obama i would definately come up with a unique solution.What about that idea i been thinking for long ?Lets open the doors of USA for people who are willing to buy homes anyplace in United states.Anyone who is willing to buy at least a 250 thousand dollars worth home in usa will be accepted to residency and citizenship.We have a large country we have lands all over the place empty, and thanks to real estate bubble we have millions of empty homes now.This is the only potential we have in our hand now, let turn that into a positive energy and benefit from that.I am just calculation ballpart but assuming that 10 million people applies for this opportunity we would solve most of the problem. Trillions of dollars that belongs toforeigners can bail out our nation.It will help the real estate market, it will help the banks and it will help also the governement with the tax benefits.I believe a market solution like that is far better than adding on top of theFeds balance sheet.We are a nation of immigrations anyway. Arent we ? Billions of dollars spend onlyin california for immigrants illegal immigrants health.At least we can create new legal citizens and tax payers.
You’l love this one!The Worst Predictions About 2008Just about everybody got wrong-footed by 2008, but some people’s mistakes were truly spectacularhttp://www.businessweek.com/bwdaily/dnflash/content/dec2008/db20081224_028134.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis
http://www.cnbc.com/id/23575614/Dear Jim: Textron [TXT 12.78 0.58 (+4.75%) ] is down from being a $70 stock to the low 50′s. It has a large backlog of private jet orders and a large backlog of helicopter orders – some originating with the military. Unfortunately, it also has a financing arm. Do you think the market and its credit concerns are a large factor in the downturn of this stock or do you think its large backlog could make it attractive? –DougCramer says: “I really like Textron. I’ve never been worried about their financing. This company’s rock solid.”Dear Jim: Should I be worried about Bear Stearns in terms of liquidity and get my money out of there? –PeterCramer says: “No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.”
7. “I think you’ll see [oil prices at] $150 a barrel by the end of the year” —T. Boone Pickens, June 20, 2008Oil was then around $135 a barrel. By late December it was below $40.8. “I expect there will be some failures. … I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.” —Ben Bernanke, Federal Reserve chairman, Feb. 28, 2008In September, Washington Mutual became the largest financial institution in U.S. history to fail. Citigroup (C) needed an even bigger rescue in November.9. “In today’s regulatory environment, it’s virtually impossible to violate rules.” —Bernard Madoff, money manager, Oct. 20, 2007About a year later, Madoff—who once headed the Nasdaq Stock Market—told investigators he had cost his investors $50 billion in an alleged Ponzi scheme.10. A Bound Man: Why We Are Excited About Obama and Why He Can’t Win, the title of a book by conservative commentator Shelby Steele, published on Dec. 4, 2007.Mr. Steele, meet President-elect Barack Obama.
why? Just because there are riots in Greece?Greece is not Europe. UK is not Europe either. Recession / depression in UK does not mean recession in Europe. Not automatically anyway.
that is beautifully funny:-)
I predict that [something bad] will happen and Bush+Cheney power duo will be in charge of you for-ever, for-ever…muhahahahaa…
I was surpised they didn’t have any of the many talking head who used this classic, “The American consumer is resilient”. I guess the problem is too many people were saying it.
question about mortgage backed securities (mbs) in mutual fund.1> i have checked many mutual funds with mbs, it seems they have not mark down their mbs holding. anyone knows why? and they continue to rate their mbs holding AAA? especially FNMA, GNMA, FHLB mbs.2> as mortgage default start to climb, mbs value should go down right? how come i am not seeing the mark to market phenomenon in mutual fund holds mbs? should i avoid mutual fund with mbs?
MBS?’s-you must remember 94% of mortgages are still performing splendedly. Mortgages are still valued on cash flow perfomance, not collateral. SO, with Treasury rates plumetting to these low levels yielding barely 2%, relative to MBS securitites yielding in the 4%’s and 5%’s, they are more valuable than Treasuries and thus will trade at a premium so these securities may have GAIN’s, not losses-so there is nothing to mark down. Private lable mortgages and some CMO’s have tanked but that is because they are not performing and the prices have plunged. You can’t just assume because it has the word “mortgage” in it that it is worthless.
ECRI weekly leading index up for the 3rd week in a row! You can see that stocks must play a key role in helping to determine the direction of the index.
Firstto let people know there is aNEW THREAD
1>how is collateral on those mbs?2>will mortgage valuation ever switch from cash-flow performance to collteral?3>what is cash-flow performance future prospect?4>so it is safe to have mbs exposure at this point?thanks
another questions, if mortgage is value at cash-flow performance, then how we have all these talk about mark to market and markit ABS indices?your answer will be appreciated.
will increase in mortgage default have huge impact on mbs cash-flow performance?
rising mortgage default, fore-closure, and delinquency rate have no impact on cash-flow performance? and looking at mbb etf, like you said, it seems mbs valuation has gone up? make sense?
Does no one remember that the Goldman boys went to DC to “explain” AIG’s situation in the week leading up to the rescue??That’s the story.C
Agency MBS are not ‘explicitly guaranteed’, rather under conservatorship they are ‘effectively guaranteed’, which has scared to death many large investors. MBS spreads over US Treasuries clearly show this. They likely did not want to make that announcement yesterday taking us to the quantitative easing stage, but they had to. That’s because they could not ‘explicitly’ guarantee the GSE’s $5 trillion+ in mortgage guarantees.In my opinion, yesterday’s announcement that over the next six quarters the Fed would buy MBS was an attempt to talk the market better and is proof that they are not planning to explicitly guaranty the debt. If I were a Foreign Central Bank or Bill Gross, I would want an explicit guaranty vs .gov buying a paltry $100 billion in GSE MBS per quarter. Remember, this $500 billion represents only approximately 10% of the total outstanding GSE mortgage guarantees.I hope I am wrong here, but I see this move as more of a cushion that allows large Agency MBS holders to sell rather than a move to keep mortgage rates down over a long period of time. I bet we see a 6 handle on mortgage rates by year end. -Best Mr Mortgage
Most of his predictions were lukwarm at best. I give him credit for not being bullish, and that’s all. He predicted the S&P down 10% and lots of inflation but not a word about deflation, which is the big news. He was bullish on the Japanese market. He did call oil at $135 but suggested it would stay there and “$100 becomes the new $70″. Anybody could see that oil is self-correcting…well, I saw it and made bank off the DUG, and it’s hard to make money using DUG.All in all, better than most but nowhere near as good as Roubini.