Doctor of Doom with a new prediction

Time to plant the turnips, goes good with shoe leather.

Jug
 
Is This The Final Answer?

I heard on the radio today about Roubini's views. Listened to Buffett this morning and basically they both agree. Not much difference between them. Both agree world economy has "fallen off a cliff."

Roubini was saying maybe another 15% drop for the markets. This made me think, if we have to endure another 15% down for the markets to finally attract a huge influx of investors, could the government induce the final 15% and get it over with?

I don't know how they could do it but I suspect it would be possible through some intervention. Very unorthodox I admit. But, just for the sake of argument. Would you support "induced recovery".

If we agree recovery won't happen until there is a final sell off big enough to drive world capital to the markets would you risk it?
 
boont said:
If we agree recovery won't happen until there is a final sell off big enough to drive world capital to the markets would you risk it?
Click to expand...
I don't personally believe that. I believe recovery won't happen until the market thinks world governments and central banks have a shred of a clue about what to do to quarantine the toxic assets and stop the water torture deterioration in balance sheets.

That could happen at Dow 6000 or Dow 2000. But I don't think the market will do anything but drip, drip, drip lower until it thinks governments and central bankers aren't all clueless.
 
boont said:
I heard on the radio today about Roubini's views. Listened to Buffett this morning and basically they both agree. Not much difference between them. Both agree world economy has "fallen off a cliff."

Roubini was saying maybe another 15% drop for the markets. This made me think, if we have to endure another 15% down for the markets to finally attract a huge influx of investors, could the government induce the final 15% and get it over with?
Click to expand...

I think it's a rather bullish forecast from Dr. Doom! Let's see, if the recession lasts until Q4 2010 the market should start recovering in Q2 2010 and yet he sees only another 15% drop until then? I like it! Are you sure he didn't say 50%?
 
By The Numbers

Well, I have to agree with you. The market numbers are just numbers. It is what they reflect that means something. Still, if things are cheap enough you get a lot of buying. That is, if anyone has any money left.

Buffett did a three hour interview today and I have listened to about half of it so far. His take is that, what the government has done so far, is correct. Paul Krugman and Roubini say the same thing. These are the guys I listen to.

Everyone else talks and these guys correct them. Roubini is an academic like Krugman but if you listen to him his logic is impeccable.

I may not like what they are saying but I, for the most part, can't find many flaws in it. They all agree this is a dangerous time but we can get through it if we treat it like a national battle, put aside differences, and fix it.

To my mind, it is too late and to dangerous to do anything else.

boont
 
ziggy29 said:
I don't personally believe that. I believe recovery won't happen until the market thinks world governments and central banks have a shred of a clue about what to do to quarantine the toxic assets and stop the water torture deterioration in balance sheets.

That could happen at Dow 6000 or Dow 2000. But I don't think the market will do anything but drip, drip, drip lower until it thinks governments and central bankers aren't all clueless.
Click to expand...



Make that "until governments and central bankers aren't all dishonest" and equities will start to rise.
 
I watched most of the Buffett interview. The thing I like about him, even though he lays out the gloom and doesn't pull any punches..... he always finishes on a positive note. He says we will get through this and our best days are ahead. We need to hear something positive from a man of his statue.

Of course we may be dead by time things are truly better. :(
 
barbarus said:
Make that "until governments and central bankers aren't all dishonest" and equities will start to rise.
Click to expand...

And it would be nice to start with our own....... :(
 
I think that's a little long - I reckon 2.5 years instead of three. Roubini held his forecasts back previously, because at the time (2005) he would have been slammed as a total kook if he would have told the truth (as all of us non public figures were). Now that it's obvious to everybody I think he's comfortable being more aggressive.
 
Actually, it could go very quickly. Someone has to fess up and admit that a ton of money was lost and ain't coming back. That means that AIG, GM, Citicorp, B of A, etc have to all go bankrupt, then stock market has to tank. More than half the folks who work on WallStreet have to lose their jobs. It can take 6 months if the government says, "We have no money" or 6 years if the government keeps trying without admitting that it has no money.

Then and only then, can we all breath a sigh of relief and start over. In the meantime with no positive news and only no news or bad news, the market will go down anyways.

I think I've just talked myself into capitulating.
 
Dawg54 said:
I watched most of the Buffett interview. The thing I like about him, even though he lays out the gloom and doesn't pull any punches..... he always finishes on a positive note. He says we will get through this and our best days are ahead. We need to hear something positive from a man of his statue.

Of course we may be dead by time things are truly better. :(
Click to expand...

Dawg,

Let the man expire before we erect a statue for him ;)
 
Did y'all know that Roubini is holding 100% Equity?

He is hoping this thing will drag out as long as possible. Same for Warren Buffett - fortunes are made in times like these. The longer down, the more shares these fellas can snap up.
 
It's a gamble but it would seem the odds are good to do Tax Loss Harvesting for 2009 at this time. Sell now, put the losses on books, go back in after 30 days with the money and hopefully buy more shares.
 
Roubini is an accomplished economist but is data driven. It is easier to forecast a downturn than a recovery because the recovery has a behavioral component that is not reflected in the data until after the fact. Therefore he is unlikely to see or predict a recovery, even after it is well underway.
 
Bikerdude said:
Well, I still drink top shelf booze, smoke premium cigars and ride my motorcycles....but those are not discretionary.:LOL:
Click to expand...

Oh good!! I was envisioning a drab, ascetic life for you lately with not even one self-indulgence and no joy or fun, and thinking "OMG, that poor guy!!" So, I am glad you are still doing a few "not discretionary" things. :D
 
I just can't listen to Roubini. He looks and sounds like Dracula. I expect blood to start dripping from the sides of his mouth at any moment.

Audrey
 
audreyh1 said:
I just can't listen to Roubini. He looks and sounds like Dracula. I expect blood to start dripping from the sides of his mouth at any moment.
Click to expand...

Not to mention that he does "feast" on financial bleeding -- the longer it stays ugly, the more fame and celebrity he gains...
 
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