Dr Roubini, do you believe in a second bottom in stock market? what prediction for S&P? you said it was a bear rally, do you foresee a fall and when? thanks.

Tres

Pecos Banker on the previous thread poses a question: “One thing that is consistently ignored is the way the military sucks dry the economy. It is as if we could let the military take 90% of the budget and all these economists would still be talking about worldwide savings gluts, fiscal and monetary stimulus, 70′s style stagflation, etc. Meanwhile you’ve got this tremendous leach, no, lamprey, that is getting bigger than its host. What gives here? Why is this drain on the economy always off limits for discussion?”_________________________Steven Staples, in “The Relationship Between Globalization and Militarism,” gives a detailed map of the drainage system that is siphoning off the American economy. It’s called globalization. And I quote:The Asian financial meltdown of 1997 to 1999 involved a terrible human cost. The economies of Thailand, South Korea, and Indonesia crumbled in the crisis. These countries, previously held up by neoliberal economists as the darlings of globalization, were reduced to riots and financial ruin. The International Monetary Fund (IMF) stepped in to rescue foreign investors and impose austerity programs that opened the way for an invasion by foreign corporations that bought up assets devalued by capital flight and threw millions of people out of work. Political upheaval and conflict ensued, costing thousands of lives.Meanwhile, other countries watched as their neighbors suffered the consequences of greater global integration. In India, citizens faced corporate recolonization…Globalization Fuels the Means to Wage War.The world economic system promotes military economies over civilian economies, pushing national economic policies toward military spending. The World Trade Organization (WTO), one of the main instruments of globalization, is largely based on the premise that the only legitimate role for a government is to provide for a military to protect the interests of the country and a police force to ensure order within. The WTO attacks governments’ social and environmental policies that reduce corporate profits… Yet the WTO gives exemplary protection to government actions that develop, arm, and deploy armed forces…The Military-Corporate ComplexSince the end of the Cold War, President Eisenhower’s 1960s-era military-industrial complex has been fundamentally challenged by globalization. Globalization has weakened the powers of the nation-state, while freeing corporations to move profits and operations across national boundaries. Defense/military contractors, once considered part of the national industrial base…are becoming detached from the nation-state and are able to pursue their interests independently…Globalization and the transnationalization of defense / military corporations have replaced the military-industrial complex of the Cold War economy with a military-corporate complex of the new global economy. This is based upon the dominance of corporate interests over those of the state. The weakened state is no longer able to reign in weapons corporations and is trapped increasingly by corporate interests… greater military spending, state subsidies, and a liberalization of the arms trade.According to New York Times columnist Thomas Friedman, “McDonald’s cannot flourish without McDonnell Douglas, the builder of the F-15…” (Friedman, 1999)…The inevitable outcome of globalization will be more wars-especially in the Third World where globalization has its harshest effects. Meanwhile, the elites of the industrialized world are confident…[t]heir technologically advanced militaries will protect them and their investments, insulating them from the violent effects of globalization.http://www.thirdworldtraveler.com/Globalization/Globalization_Militarism.html

A loooooooooong time ago, there was a great wizard called Zimba Ben. Whenever he waved his magic wand and murmured the magic spell “Zimba, Zimba, Ben!!!”, whatever he waved toward would become just fine.

The defense budget is NOT sacrosanct. No part of the US budget is beyond consideration for cutbacks at this stage – despite what our politicians in Congress say. Congress is acting on the idiotic fallacy that they have a “get out of jail FREE card” … namely that the Fed can always just print money to bail them out of ridiculous spending habits.But Congress is wrong. The global credit markets are slowly but surely inching towards the realization that all the debt that has been generated cannot get repaid. That means there will be defaults in the system. Not only in the USA. Quite possibly in Spain, Ireland, Eastern Europe, and maybe even Japan. There are nightmare scenarios out there – possibly avoidable only by coordinated mass devaluations of currencies around the world.PeteCA

And what does this Globalization that is financed largely by the American producer mean to the average American? Why it means a “New Normal.” Read it on “New Normal of 2% GDP Growth Coincides With Biggs” on previous thread.It means that Americans, to service their billionaire plutocracy, have to get “used to unemployment greater than 8 percent”; it means that the “potential growth for the U.S. is no longer 3 percent, but is 2 percent or under”; it means “lasting shifts in consumer spending and savings”; it means “a new era of frugality (for you, not Obama)… a secular change in household attitudes (not in Fed attitudes)”; it means returning to the “years during President Dwight D. Eisenhower’s administration”; it means “less return to capital and less-remarkable equity returns”; it means “the financial system will be de-levered, de-globalized and re-regulated (well, we’ll go for that)”; it means “growth in the U.S. to be slow…that ‘Investors will have to get used to “a 5- to 7-percent return game, not a 15- to 20-percent return game,’” it means the “lasting effect of the recession may be a ‘markedly higher’ natural rate of unemployment.’”It means “Consumers are saddled with debt built up during the boom years.” It means the “percentage of net worth, household debt — including mortgages — is at 27 percent, the highest on record”; and it means that that house that “grew to 2,521 square feet by 2007” may have to go back to “average size…1,200 square feet”…as less income drives people “to devote less of their incomes to mortgage payments.” It means “fewer European cabinets and appliances and fewer granite countertops.” It means “the number of U.S. malls [will be] falling by at least a fifth and weak chains succumbing to bankruptcy”; and, yes, it means “Coach Inc. has begun to ‘engineer’ its collections so at least half its handbags fall into the $200 to $300 range, compared with 30 percent previously.” To quote Coach Inc. CEO Lew Frankfort “We are adapting to what will be a new normal.”Yet, we can still eat! “Brinker International Inc., the owner of the Chili’s Grill & Bar chain, said April 21 that it updated its menus to reflect a focus on ‘lower price points.’”But, alas, my dears, the Fed isn’t through with us yet: “Will there be at some time in the next 10 or 20 years another big bubble and collapse? Absolutely,” Ethan Harris, co-head of U.S. economics research at Barclays Capital in New York, said. “You can’t entirely change “human” (aka Bernanke’s) nature.”http://www.bloomberg.com/apps/news?pid=20601109&sid=a3i27FMViXmY&refer=homeSo, dear American, that is your “balance due” statement from the U.S. Treasury for the bankers’ bailout, from America’s “Too Powerful to Fail.” That is what your Man in the Treasury, Tim Geithner, meant when he said on May 11 to Charlie Rose, we have to stop the next boom. He meant your “boom,” dear American.Welcome to the Third World.

g,this post is the Rosetta stone for thebeneficent future of humanity, period.as long as there are humans of your intellectand wisdom i think there is hope for mankind..Idiomatic useThe term Rosetta Stone has become idiomatic as something that is a critical key to the process of decryption or translation of a difficult encoding of information:.http://en.wikipedia.org/wiki/Rosetta_Stone.ps. intelligence in the absence of intellectand emergent wisdom leads to a futile strugglefor security where one is, out of fear, pressed to abandon their founding principles and then thesolution becomes a worse evil than the originalproblem, resulting in a self imposed negation or self destruction or a cycle of willful ignorance. this has led some to speculate onthe “wisdom of insecurity” as a phase in theevolution to a state or condition termed “free”.or open or aware, observant.thank you for connecting all the dots.

“Watching Obama Morph Into Dick Cheney” … Paul Craig RobertsAmerica has lost her soul, and so has her president.A despairing country elected a president who promised change. Americans arrived from every state to witness in bitter cold Obama’s swearing in ceremony. The mall was packed in a way that it has never been for any other president.The people’s good will toward Obama and the expectations they had for him were sufficient for Obama to end the gratuitous wars and enact major reforms. But Obama has deserted the people for the interests. He is relying on his non-threatening demeanor and rhetoric to convince the people that change is underway.The change that we are witnessing is in Obama, not in policies. Obama is morphing into Dick Cheney…http://www.vdare.com/roberts/090520_obama.htm

The good doctor is hot now, he won’t answer questions online anymore like he did back in 2006. Time can change everything, it can even make you a prophet.”Bear market rally? What bear market rally? I said the bottom is in” — NR

“Blue collar males lose more ground”May 18, 2009 — DALLAS (Reuters) – Rodney Ringler is an unemployed blue collar male without a college degree. He’s hardly alone. Men like him have been the main victims of the current recession in the United States.”I haven’t worked since December of 2007, around the time this recession started,” Ringler, a 49-year-old computer technician, said as he walked his dog in a Dallas suburb.He sees little light at the end of the tunnel.”I’ve been looking to get into law enforcement because it’s a growth area,” he said, but had no immediate prospects.One statistic that stands out in America’s recession-stung economy is the unemployment rate for adult men: in April for the second month in a row it surged ahead of the national average to 9.4 percent versus 8.9 percent for all workers. The jobless rate for adult women was 7.1 percent.The reasons are clear: male-heavy sectors such as construction and manufacturing have been hard hit. But the implications may be dire for the broader economy and hamper the recovery as families that once had male breadwinners struggle.”In the 2001 recession, 51 percent of all job losses were for men. It was evenly split. But in this recession 80 percent of the jobs that have been lost have been men’s,” said Andrew Sum, a labor economics professor at Northeastern University who has studied this issue in detail.Men also incurred about 80 percent of the job losses in the 1990-91 recession, but Sum said by his calculations the numbers this time were dramatically different. In the 1990-91 recession, men lost 1.037 million jobs. They have lost 4.5 million to date in this one…It’s difficult to compare to earlier recessions because women entered the workforce in big numbers from the 1970s, and industries that continue to grow such as health services favor women…HARD TIMES AHEADThe fact that American males without a college degree are especially vulnerable in this cycle point to more hard times ahead for the U.S. working class, which has endured stagnant and declining wages for the last three decades.The skilled and semi-skilled jobs they traditionally held have been moving overseas to places like China and Vietnam. The jobs that remain pay less, amid declining union membership.One study by Julia Isaacs of the Brookings Institution think-tank found median U.S. family income rose to $53,280 by the middle of this decade in 2004 dollars from $37,384 in 1964. But for males aged 30 to 39, average annual personal income fell from the mid-1970s by around $5,000 to $35,000.The growth in family incomes is mostly from women entering the workforce. But during this recession that will hardly compensate given the scale of male job losses.For those without a college degree or better, it has been a bloodbath…[M]any manufacturing jobs are gone for good, as huge sectors like the auto industry suffer profound cuts.Peter Doeringer, a Professor of Economics at Boston University.Doeringer, said the recession will leave the economy “sharply restructured”.”The construction jobs will return, but we are seeing an unusually sharp drop in what is left of manufacturing and much of that drop will not be recovered when the recession ends, and much of what does remain will have be at lower wages with reduced fringe benefits,” he said.http://www.portfolio.com/business-news/reuters/2009/05/18/blue-collar-males-lose-more-ground

LOL !!Let´s cheat our creditor !! LOL !!!!!!!!!Don´t be stupid !

Henry CK Liu @ Asia Times”The whole world is now producing goods and services made by low-wage workers who cannot afford to buy what they make except by taking on debt on which they eventually will default because their low income cannot service it.All the stimulus spending by all governments perpetuates this dysfunctionality. There will be no recovery from this dysfunctional financial system. Only reform toward full employment with rising wages will save this severely impaired economy.”http://www.atimes.com/atimes/Global_Economy/KE27Dj07.html

You can probably learn more about Economics from Liu’s page than from any college in the world.

If you insist on posting this stuff here – please give us a detailed analysis of the projected earnings for Nike, their P/E ratio, and their credit rating.PeteCA

Obama is morphing into Dick Cheney…

Noooooooo….

I think I’m gonna buy a pair of “Air Roubinis”

This is about as right-on as can be BUT… rising wages brings rising production, which brings growth, which brings…There is no “out.” To borrow lyrics from the Eagle’s Hotel California: you can check out but you can never leave…Mark

the above was cross posted at zerohedge – thus the Cramer porn reference

I’ll ask you again: Do you sell Advertiser Blog Erasers?

Guest post: Marc Faber says “I am 100% sure that the U.S. will go into hyperinflation”You have to hand it to Marc Faber; he knows how to grab your attention. Earlier this year, I posted a video of him saying “don’t underestimate the power of printing money”, a quote that has become mantra for me. Basically, he believes a rising tide of quantitative easing is going to buoy stock markets globally and the global economy (at least for the medium-term). This is a view I agree with and one reason I have taken a more bullish tack at Credit Writedowns.Earlier today, I also posted a video of Faber talking about Nouriel Roubini and the pressure not to overstay a bearish call and miss the turn which I found rather interesting (Here’s a video of Roubini sounding rather bullish – for him). However, later in that same interview, Faber makes his most quotable statement yet: “I am 100% sure that the U.S. will go into hyperinflation.” That is a very bold claim.Just last week, I made similar comments in my post, “More thoughts on the fake recovery.”http://www.nakedcapitalism.com/2009/05/guest-post-marc-faber-says-i-am-100.html

The blogs are ablaze with the impending (expletive deleted)ization of the PPIP, I mean the taxpayers – (not that the idea from the get go was to do just that) -http://www.calculatedriskblog.com/2009/05/fdic-ppip-llp-doa.htmlhttp://www.nakedcapitalism.com/2009/05/guest-post-fdic-wont-rule-out-banks-as.htmlhttp://zerohedge.blogspot.com/2009/05/cramer-baired.htmlhttp://globaleconomicanalysis.blogspot.com/2009/05/bair-says-no-to-furthering-ppip-scam.html

At the very least, there’s no question whatsoever that we’re getting Dick’ed.

may i help you?

no worry, be happy.i am fine. i am doing my job.

By the way, where is Miss America when you need him? Like NOW!

These days cheap chic is not cheap enough. Just ask Target. Target is struggling on its cheap chic theme as depression looms and has decided to go Wal-Mart Smart, back to basics by adding more food and necessities to its product line. As one Target shopper now shopping at Wal-Mart said, he used to shop at Target, and “they have some better things,” but he was laid off his job as a machinist in November and “money is more important,” no matter how cheap the chic, so he’s shopping at Wal-Mart and “rarely goes to Target anymore”—a benchmark story these days.Target has dropped 42 percent from its high of $70 in July 2007, though it has rallied since March. About 37 percent of Target’s revenue comes from necessities, like paper towels and food. For Wal-Mart, that figure is about 60 percent.The San Jose Mercury News today had this to say in “Target Goes Grocery Shopping”:“But Target’s cheap chic mantra—its advantage in boom times—became a drag in late 2007 as the recession began and shoppers focused on basics. At the same time, Wal-Mart, based in Bentonville, Ark., found a balance of merchandise and marketing to enhance its renewed focus on price.“Target’s same-store sales—the comparison of sales at stores open at least a year and a key indicator of a retailer’s health—has lagged Wal-Mart’s since late 2007. In the most recent quarter, sales at established Target stores dropped 3.7 percent, while the indicator rose 3.7 percent at Wal-Mart, excluding fuel.“’Consumers are buying what they need to have so Target is stuck where they are, because that’s the mouse trap they built,’ said Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates. ‘Wal-Mart is pounding away at its price message relentlessly.’”

Variable Annuity Sales Fall 27% as MetLife Takes LeadMay 27 (Bloomberg) — Variable annuity sales in the U.S. plunged 27 percent in the first quarter and MetLife Inc. claimed the top spot as other life insurers, battered by losses on the retirement products, scaled back their offerings.Sales were $30.7 billion in the three months ended March 31, compared with $41.9 billion the same period a year earlier, the trade group LIMRA said today in an e-mailed statement. New York-based MetLife, which ranked fourth in the first quarter last year, boosted its sales 17 percent to $3.74 billion, the only provider in the top nine to post an increase.Funds backing variable annuities are generally invested in stocks, and when markets decline the losses can be shouldered by both savers and insurers. That’s depleted capital at carriers including Hartford Financial Services Group Inc. and Prudential Financial Inc. and created opportunity for MetLife, the biggest U.S. life insurer.“We love the variable annuity business,” MetLife Chief Executive Officer Robert Henrikson said in a February conference call. “The need for the product — both in terms of downside protection for the consumer and the increasing focus on need for retirement income — the need is as great or greater” after stocks dropped last year.The Standard & Poor’s 500 Index dropped 38 percent last year, its worst performance in at least half a century as the U.S. fell into recession. The index is down 1.1 percent since Dec. 31.Hartford, PrudentialHartford, which has accumulated more than $4 billion of losses in the past three quarters, fell to 14th place from seventh as sales dropped 72 percent. Newark, New Jersey-based Prudential, the No. 2 life insurer, posted a 25 percent decline.Savers have been increasing holdings in fixed annuities, which offer more protection when markets decline. Sales of fixed annuities climbed 74 percent to $35.6 billion, marking the first time since 1995 the products outsold variable annuities for two straight quarters.Consumers are “still leery of the volatile stock market and looking for secure, competitive guaranteed rates of return,” said Joe Montminy, a research director for LIMRA, in the statement.Allianz SE’s North American subsidiary, which placed 10th, had a 68 percent jump in first-quarter sales.http://www.bloomberg.com/apps/news?pid=20603037&sid=aUrmo6PwISsI&refer=home

Economic crisis spurs spike in ‘suburban survivalists’ | May 26, 2009 (AP)Quote:The surge in interest in emergency stockpiling has been a bonanza for camping supply companies and military surplus vendors, some of whom report sales spikes of up to 50 percent. These companies usually cater to people preparing for earthquakes or hurricanes, but informal customer surveys now indicate the bump is from first-time shoppers who cite financial, not natural, disaster.Top sellers include 55-gallon containers, freeze-dried foods, water filters, purification tablets, glow sticks, lamp oil, thermal blankets, dust masks and first-aid kits.Online interest in survivalism has increased too. The niche Web site SurvivalBlog.com has seen its page views triple in the past 14 months to nearly 137,000 unique visitors a week. Jim Rawles, a self-described survivalist who runs the site, calls the newcomers “11th-hour believers.” He charges $100 an hour for phone consulting on emergency preparedness and says that business also has tripled.Joe Branin, owner of the online emergency supply store Living Fresh, said he’s seen a 700 percent increase in orders for water purification tablets in the past month and a similar increase in orders for sterile water pouches.He is shipping meals ready to eat and food bars by the case nationwide.http://www.statesman.com/news/content/news/stories/nation/05/26/0526survival.html

her or him?

The bottom is ‘in’? Is that statement inconsistent your risk assessment of a ‘W’ shaped recession?What about negative fall-out from the unorthodox manipulations of the FED as outlined in Ed Harrison’s recent piece: “The Phoney Recovery”.Is not it a dangerous policy to pile up the public balance sheet with debt instead of restructuring properly?

in this case him. We all found out many threads back that “she” was a he.

Technically, I think, it was during the sanctions against Iraq when the contracts that were signed back around 1917 expired: they were 75 year oil leases. Iraq’s attack against Kuwait was a trap so that the US could invade Iraq (prior attempts to oust Saddam failed) and then, brilliantly, use UN resolutions (Food for Oil) to sanction Iraq for such actions. The sanction years allowed for further brainstorming on how to dislodge Saddam and to keep him from negotiating new contracts.Bonus points for anyone who can tell me who it was who first used chemical weapons on Iraqis.Mark

I am very curious about this statement by Dr. Roubini;

The right way to resolve a problem of excessive debt relative to equity capital for households, firms and financial institutions is to reduce such debt and convert it into equity.

I understand how to do this with companies, convert debt to stock but how do you do this with household or consumer debt which is not only in housing but also in auto loans, student loans and credit cards?As I understand the problem, the biggest issue is the consumer insolvency which revolves around the above extended credit. They are increasingly insolvent and as they are 70% of the economy, even converting debt to equity for business has extremely limited benefit as they are reliant upon the consumer to buy. When the consumer can’t of doesn’t buy, then business makes less and in survival ends up laying off employees. All of which is a negative feed back loop. A negative feed back loop that I personally do not see an end to until sufficient consumer debt has been disposed of so that the consumer can have excess disposable income again.What the government is doing by creating inflation is to extend out to infinity this cycle by creating inflationary pressures that will keep the consumer from having excess disposable incomes…So back to my original question. How does the consumer debt get converted to equity? And if this is how I think it is, doesn’t this add to the negative feed back loop and continue the inflationary pressure that will continue the downward spiral of America.So in the end, most people are slaves and no better off than those in India? YET the US Industrial Arms Complex needs a vital economy to produce enough wealth to sustain it… Which protects the wealth of those who are pulling the strings…. Are they really so stupid to think what they are doing has a chance of sustaining them too?