in_the_trenches writes:
Someone get these guys a Wright Model B.
in_the_trenches | 03.20.08 - 12:54 pm | #

Neal writes:
How can they say that--Sebastian's going to be pissed at these know-nothings shooting off their mouths on stuff they know nothing about..
Neal | 03.20.08 - 12:55 pm | #

NSA writes:
Today is unambiguously the first day of Spring, too.
NSA | 03.20.08 - 12:56 pm | #

SGV writes:
OT

I heard this on NPR this AM--between '02-'07 Wall Street paid out $137 bil in bonuses.

http://osc.state.ny.us/press/rel...jan08/ bonus.pdf
SGV | 03.20.08 - 1:00 pm | #

Sebastian writes:
CR posted: "The Economic Cycle Research Institute, which correctly predicted the 2001 recession at a time *when many on Wall Street still maintained a rosy outlook*, said their numbers indicate the economic contraction is already under way."
(asterisks mine)

Isn't this getting just a *little* bit silly? Or I guess I should be asking how silly does it have to get before people start saying...well, you know.

How likely is it that there's a recession when so many on Wall Street (and elsewhere) maintain a *bearish* outlook? What are we to believe, that bear markets and economic recessions occur *both* when expectations are rosy *and* pessimistic?


Sebastian
Sebastian | 03.20.08 - 1:00 pm | #

HARM writes:
“Economics is the art of predicting the past”

(and)

“An economist is someone who will tell you tomorrow why the prediction he made yesterday never happened.”
HARM | Homepage | 03.20.08 - 1:01 pm | #

Barley writes:
9 month decline - let see that would be June 07...ta da I get a gold star. I have been saying June 07 all along!
Barley | 03.20.08 - 1:01 pm | #

REBear writes:
Seb,
What about providing some constructive argument why US is not heading towards/already in a recession?
REBear | 03.20.08 - 1:04 pm | #

Jim writes:
But there are still more customers than clerks in my Target store. Why is that?
Jim | 03.20.08 - 1:04 pm | #

DannyHSDad writes:
Slightly OT:

Epix to stop development of depression drug

http://www.reuters.com/article/ m...G31821520080320

First Prozac and now this. Just when you need them the most...
DannyHSDad | Homepage | 03.20.08 - 1:05 pm | #

Sebastian writes:
Neal said: "How can they say that--Sebastian's going to be pissed at these know-nothings shooting off their mouths on stuff they know nothing about..."

It's not a personal thing with me. I know what I know, they know what they know, and we'll just have to see who's right.

But I'll reiterate a previous forecast: Even if I am ultimately proven correct, I won't get any credit for it, even though the "recession/not recession" issue has serious repercussions and isn't just a minor matter of semantics.


S.
Sebastian | 03.20.08 - 1:05 pm | #

Max writes:
But there are still more customers than clerks in my Target store. Why is that?

What, a 1:1 ratio is a good thing?
Max | Homepage | 03.20.08 - 1:05 pm | #

guest writes:
Sebastian,

Sorry I am new here. Can you explain why you think we are not headed for or in a recession?

I am not saying you are wrong just wondering if you could share your analysis. I am looking at both the bullish and bearish outlooks and would be interested in your perspective.

Thanks.
guest | 03.20.08 - 1:08 pm | #

energyecon writes:
Funny - when ECRI was in the rosy camp Seb cited them as an authority - now we arm waving arguments from *Mr. Data*...
energyecon | 03.20.08 - 1:11 pm | #

DannyHSDad writes:
OT: I didn't see in the comments but:

IKB Seeks Fourth Bailout After Subprime Loss Widens (Update4)

http://www.bloomberg.com/apps/ne...4& refer=germany

IKB Deutsche Industriebank AG, the first German casualty of the collapse of the U.S. subprime- mortgage market, forecast a wider loss and said it will need a fourth government bailout.

IKB fell as much as 14 percent in German trading after saying the loss will be about 800 million euros ($1.2 billion) KfW Group, the state-owned development bank that controls IKB, will inject another 450 million euros to shore up the lender.

and near the end:
IKB ``temporarily'' stopped the sale of investments ``due to the current market environment,'' the bank said today. It expects further writedowns of about 450 million euros from the sale of a portfolio with a ``higher probability of default'' on which it already had markdowns of 630 million euros.

They didn't like the bids so they decided to keep them at the level3 (Mark to model/fantasy/wishing price)?
DannyHSDad | Homepage | 03.20.08 - 1:13 pm | #

nades writes:
Severity is the only question now....

TBP had a video fro WSJ from a Merrill guy... surprisingly bearish...

http://link.brightcove.com/ servi...bctid1463294150

So whats it going to be?
nades | 03.20.08 - 1:15 pm | #

jg writes:
CR: "...ECRI may have called the 2001 recession, but they are late to the party on this one..."

Aw, CR, you know that they are in a difficult position: like the NBER, they have to be sure that we are in one before they can proclaim such.

Loose gunslingers around here can shoot from the hip based on our read of the data -- Oct. '07 still looks like a plausible start date to me -- but folks in public view must be more careful.

But, folks like NBER and ECRI should be giving us interim, reality-based updates: "...Four out of five indicators that we track are weakening, and if they continue such, we may determine, a few months from now, that we are indeed in recession, now..."
jg | 03.20.08 - 1:15 pm | #

5 Foot 3 Pablo Picasso writes:
"How likely is it that there's a recession when so many on Wall Street (and elsewhere) maintain a *bearish* outlook? What are we to believe, that bear markets and economic recessions occur *both* when expectations are rosy *and* pessimistic?"

Yep. In a data set of 2, don't expect a trend.

Or it's more complicated than saying "recessions only happen when nobody is looking" -- or the converse.

Or pull your head out of your Wright B.
5 Foot 3 Pablo Picasso | 03.20.08 - 1:16 pm | #

samsin writes:
Recession deniers - are they looking at facts and statistics? So far I've seen few numbers that point towards a growing economy in the next couple quarters. Believing we're in recession isn't wishful thinking - most everyone loses out during downturns.

Or are they basing their beliefs on contrarian thinking? Granted, the way markets are working these days I understand why it's easy to believe up is down, etc.

Yet you can't deny that the job market is worsening and GDP growth is declining. Oh well, it's hard to argue against faith.
samsin | 03.20.08 - 1:18 pm | #

ForWhomTheTollBuilds writes:
Sebastian, you are, by far, the most skilled troll on the internets.

You've thought of ways to make use of logical fallicies that I had never dreamed of before.

Your servant
ForWhomTheTollBuilds | 03.20.08 - 1:19 pm | #

burnside writes:
Well, there it is.

I believe it's not particularly important to have been right about this, with the important exception of being aware enough to take precautions to protect yourself, your family, your employees. Or to avoid moves which would have become problems in a downturn.

Those things do truly matter.
burnside | 03.20.08 - 1:19 pm | #

mp writes:
Conjure Bag tells me we are *definitely* in a recession.
mp | 03.20.08 - 1:20 pm | #

Drew writes:
Still waiting on my pony. Where's my damn pony!?
Drew | 03.20.08 - 1:21 pm | #

Geoff writes:
Sebastian is out riding your pony, and after he breaks its leg, he's going to shoot it, just to spite you.
Geoff | 03.20.08 - 1:23 pm | #

mp writes:
Drew, we all want our damned ponies, especially Conjure. He starts to drool when he sees one of those pink ones.
mp | 03.20.08 - 1:23 pm | #

Sniglet writes:
Your pony is hanging out in Seattle.

http://seattlebubble.com/forum/v...c.php?f=1& t=610
Sniglet | 03.20.08 - 1:24 pm | #

hdude writes:
Think anyone's buying ?

Dear Valued Customer,

Due to the OVERWHELMING demand for precious metals, our online ordering system has been unable to keep up with our customers’ needs. We have had to disable the APMEX ordering system to allow us ample time to upgrade our site to accommodate the increased demand. We apologize for this temporary problem. In the mean time, we will be accepting telephone orders for the following items only as we have them available:
hdude | 03.20.08 - 1:25 pm | #

Sebastian writes:
REBear asked: "What about providing some constructive argument why US is not heading towards/already in a recession?"

You mean that the fact that sentiment is almost diametrically opposite of what it should be isn't enough?:)

Well, the Treasury yield-curve inverted 18 months ago, but that's the outer limit of its forecast lead-time, and there's still no recession (although there's a virtual hysteria about it).

It inverted 6 months before the beginning of the 2001 recession.

It never did invert in advance of the 1990-91 recession. (Although Model B did, 18 months in advance. That's one of the reasons I prefer Model B, it has a better track record.)

It inverted 7 months before the 1981-82 recession.

It inverted 11 months before the 1979-80 recession.

It inverted 3-4 months before the beginning of the 1973-75 recession.

Beyond a certain point, recession isn't just overdue, it's not coming anytime soon because the point of critical mass, if you will, was never reached.

Even the leading indicators that other bears here have offered as proof of recession suggest that we *ought* to be *deep* into recession by now, with hundreds of thousands of net job-losses from non-farm payrolls (just as an example).

If we're not where we ought to be, we're somewhere else.


Sebastian
Sebastian | 03.20.08 - 1:25 pm | #

Drew writes:
That's priceless Sniglet. :)

However, given current events, I think our pony visit might look more like this...

http://www.youtube.com/watch?v=m...h? v=m611h5dg0pM
Drew | 03.20.08 - 1:27 pm | #

Geoff writes:
Sebastian, that's the stupidest argument ever. You make a case for the economy not being in recession by stating it is not in recession? You're kidding, right?
Geoff | 03.20.08 - 1:27 pm | #

mp writes:
"If we're not where we ought to be, we're somewhere else."

Sebastian, are you related to Amelia Earhart, or her navigator?
mp | 03.20.08 - 1:27 pm | #

Sebastian'sWorld writes:
stfu already
Sebastian'sWorld | 03.20.08 - 1:30 pm | #

Al writes:
Sebastian is so confident yet so wrong. What's Yun's first name?
Al | 03.20.08 - 1:31 pm | #

nades writes:
"A wise man once said 'don't argue with fools 'cause people from a distance can tell who is who'"
nades | 03.20.08 - 1:32 pm | #

Rusticus writes:
Sebastian,
How are we supposed to know where we are when the Fed has disabled the compass? We're deep in the woods and we think we're still in the parking lot.
Rusticus
Rusticus | 03.20.08 - 1:32 pm | #

Anonymous writes:
Sebastian -
I dont know why you're ignoring the fact that the yield curve inverted in 2006.
Check that box, the yield curve inverted.
Anonymous | 03.20.08 - 1:33 pm | #

Bob Dobbs writes:
This is another feed-the-troll thread. Not even worth reading.

When will you people learn?
Bob Dobbs | Homepage | 03.20.08 - 1:34 pm | #

AlphaBeta writes:
Economist does not believe that his wife wants divorce without written statements supporting this fact from his lawyer, his accountant and her new lover :)
AlphaBeta | 03.20.08 - 1:37 pm | #

Sebastian writes:
Geoff said: "You make a case for the economy not being in recession by stating it is not in recession?"

Well, that, and the fact that year-over-year quarterly real GDP is +2.47% (when it *ought* to be closer to zero if recession was near) and the unemployment rate is 4.8% (widely considered to be full employment and also going the wrong way for recession).



S.
Sebastian | 03.20.08 - 1:37 pm | #

Anonymous writes:
"Mr. Madison, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul."
Anonymous | 03.20.08 - 1:37 pm | #

Geoff writes:
Im with you now Bob. After that last piece of "analysis" Im going ot be scrolling by all of the comments from one particular poster who clearly has nothing else to do with his time.
Geoff | 03.20.08 - 1:37 pm | #

M-F writes:
30 year Mortgage rates fall, ARM rates are up. 30 year rates are really pretty darned good.

http://money.cnn.com/2008/03/20/ ...sion=2008032012

But experts warn the rate decline may not last.

The rate on a 30-year loan dropped to an average of 5.87%, down from 6.13% a week ago, according to new Freddie Mac figures released Thursday.

Rates on adjustable-rate mortgages, however, continue to climb, averaging 6.44%, up from 6.21% last week, according to Bankrate.com.

And I always check ditech whcih is currently offering 5.25% refinance + 2 points.
M-F | Homepage | 03.20.08 - 1:40 pm | #

Sebastian writes:
Anonymous, making an extremely embarrassing faux-pas said: "Sebastian -
I don't know why you're ignoring the fact that the yield curve inverted in 2006."

In response to my post, when I said: "Well, the Treasury yield-curve inverted 18 months ago, but that's the outer limit of its forecast lead-time...

Now I understand: People don't even read what I write, that's why they say the things they do.


S.
Sebastian | 03.20.08 - 1:41 pm | #

praetorian writes:
Seb,

What, exactly, would it take for you to gentlemanly admit that you were wrong?

Regards,
prat
praetorian | 03.20.08 - 1:42 pm | #

Anonymous writes:
Like I said, I dont know why you're ignoring that the yield curve inverted in 2006. I didnt say you didnt write that it happened - you just chose to ignore it because its incovenient for your one last thread argument.
Now I see why no one reads your posts.
Please add me to that fast growing group.
Anonymous | 03.20.08 - 1:44 pm | #

Anonymous writes:
"Fitch Ratings affirmed its AA- rating on Credit Suisse..."

Wheeew, that was another close one. Thanks, Fitch.
Anonymous | 03.20.08 - 1:44 pm | #

Sebastian writes:
Rusticus asked: "How are we supposed to know where we are when the Fed has disabled the compass?"

By taking a long-run perspective and keeping our wits about us. My compass isn't disabled.


S.
Sebastian | 03.20.08 - 1:46 pm | #

Anonymous writes:
Nit Wits, that is.
Anonymous | 03.20.08 - 1:47 pm | #

Drew writes:
OT:

Japan's central bank is without a governer.

"..there will be no one at the central bank to confer regularly with overseas counterparts like the Federal Reserve chairman, Ben S. Bernanke."

http://www.nytimes.com/2008/03/2...ml? ref=business

Poor Ben, so lonely at the top.
Drew | 03.20.08 - 1:48 pm | #

cd writes:
Seb-
My clients Auto Dealers say very mean recession is here and started long ago! But there auto guys, maybe they told me while they outside smoking another cigarette..They don't have many leads to call..

Note to myself-When you see a lot of butts on the ground and salesman playing with their thumbs before you see Dealer Principle. Sell him pay on performance package..
cd | 03.20.08 - 1:50 pm | #

Scott writes:
Ok Kids - Riddle Me This...

Why is the market surging on more bad news...seriously?

And, I'm even more puzzled, but my short ETFs (EEV, SMN) are up (as I would expect if we were in a contraction), but they generally run in inverse to the market indexes...what gives?
Scott | 03.20.08 - 1:51 pm | #

cd writes:
ppt will keep it range bound for 2 years if it needs to..
cd | 03.20.08 - 1:53 pm | #

Drew writes:
The tickers EEV and SMN are emerging markets and materials respectively. Everyone sees "demand" going down so commodities are getting hammered, and so are third world funds.

They were running inverse to the indexes before because everyone believed in the decoupling myth.
Drew | 03.20.08 - 1:54 pm | #

Sniglet writes:
Scott,

Today is options expiry, which often contributes to bullishness. On the other hand, that's not a hard fast rule.

Who knows, with the volatility we've been seeing lately the marekts could turn dramatically before the close. Sometimes the indexes just want to reach particular resistance points before changing direction.
Sniglet | 03.20.08 - 1:54 pm | #

Terry writes:
All Sebastian, all the time.

I love Greasemonkey.
Terry | 03.20.08 - 1:54 pm | #

solo writes:
Sebastian writes:

Well, that, and the fact that year-over-year quarterly real GDP is +2.47% (when it *ought* to be closer to zero if recession was near) and the unemployment rate is 4.8% (widely considered to be full employment and also going the wrong way for recession).

Seb look at this chart.
http://www.safehaven.com/images/...ldin/ 9696_a.png
The problem now is that the MEW is gone.
solo | 03.20.08 - 1:55 pm | #

Sebastian'sWorld writes:
ForWhomTheTollBuilds writes:
Sebastian, you are, by far, the most skilled troll on the internets.

You've thought of ways to make use of logical fallicies that I had never dreamed of before.

Your servant
ForWhomTheTollBuilds | 03.20.08 - 1:19 pm | #



nope, there's one more talented than he.... you have to go to the yahoo message board..

kbodie777--nonstop 24/7 last 4 years...General motor's
Sebastian'sWorld | 03.20.08 - 1:56 pm | #

nades writes:
Serious question for anyone who has made it this far down the comments roll....

Does anyone know where I can find an updated graph of the mortgage resets value by months from now.

Heck I cant even explain what I'm looking for. I'm screwed when it comes to trying to type that in google....

I remember Ivy Zellman had the graph and then it became popular and everyone had one... (memory jogger if no one could understand what I'm looking for)
nades | 03.20.08 - 1:56 pm | #

nades writes:
TIA
nades | 03.20.08 - 1:57 pm | #

MarktoMarket writes:
Looking at the leading industry groups on the WSJ.....Mortgage Fin - +9.28(FNM and FRE top) and Home Construction - +6.25...? Excuse my ingnorance but with all the signs pointing where they are what gives? Cant be only short covering can it
MarktoMarket | 03.20.08 - 2:00 pm | #

JJL writes:
And finally Bernanke's rush to save home prices makes perfect sense:

Report: Bernanke's own home down 260K in value
http://latimesblogs.latimes.com/...t- bernanke.html

HAHA! Will Bernanke do the "walk away" or look for a principal reduction?
JJL | Homepage | 03.20.08 - 2:02 pm | #

wawawa writes:
Can someone help me to decipher this chart. Thanks.

http://bp2.blogger.com/_GMFF5jY6...arch18- 2008.jpg
wawawa | Homepage | 03.20.08 - 2:06 pm | #

Sebastian writes:
praetorian asked: "What, exactly, would it take for you to gentlemanly admit that you were wrong?"

Why am I the only one you're asking? And have you asked yourself?

An NBER declaration would be enough, but if people don't want to wait that long, 750,000 or so net job-losses from non-farm payrolls would be sufficient, I guess. A +6% unemployment rate would also work. A quarter or two of year-over-year quarterly real GDP growth below 1%.

A real recession can't hide behind minor technicalities of definition, it's got to *hurt* or it's no recession.

I'm sure that all my detractors will be equally gracious about admitting they were wrong, if it comes to that. Because I know them all to be gentlemen of good character.


Sebastian
Sebastian | 03.20.08 - 2:07 pm | #

NorkaWest writes:
nades:

try this for now.

http://www.youtube.com/watch?v=x...h? v=x1agUcvPcmQ

I'll look for the chart and source to which you are referring. I think it was a European IB.
NorkaWest | 03.20.08 - 2:08 pm | #

Peter writes:
I've been reading this blog fairly religiously over the past year or two, but I still don't understand this 'conjure' thing. MP - can you or someone explain the reference?
Peter | 03.20.08 - 2:09 pm | #

Anonymous writes:
Option expiration day
Anonymous | 03.20.08 - 2:11 pm | #

Heliben writes:
Nades,
I think it was a chart from Deutsche Bank, but haven't had any luck finding it so far.
Heliben | 03.20.08 - 2:11 pm | #

Optimistic Joe writes:
ECRI's methodology is sound. When they say we're in recession then it's simply the case. The question is if we'll get 2 quarters of negative growths (as in the official definition) or if we'll stick with just this quarter, qualifying for something between a mid-cycle downturn and a real recession.

O-Joe
Optimistic Joe | 03.20.08 - 2:13 pm | #

NorkaWest writes:
Nades: found it.

http://calculatedrisk.blogspot.c...eset- chart.html
NorkaWest | 03.20.08 - 2:13 pm | #

ashkan writes:
You just wonder where the Sebastions come from. Out of touch distraction. Arguing with contrarian cheerleaders is a waste of time. Insolvency of the financial system is the concern. There's misinformation, disinformation, solid technical analysis, the peanut gallery, etc. Every economics or finance blogs has trolls like Kudlow who say things aren't so bad. Look at the last nine months of optimistic speculations and pronouncements. All lies or inacurate or misleading. This bubble bust just keeps getting worse. Layoffs are happening. Devaluation of real estate. Price discovery of debt derivatives.
These are the topics worth analyzing and commenting on. Ignore unreasonable optimism. It's probably lost a lot of money for those exposed to this unwinding of toxic credit waste. Beware of economic snake oil salesman.
ashkan | 03.20.08 - 2:15 pm | #

KirkH writes:
CR, Tanta, please investigate a new comment system that allows for comment ratings. Things are deteriorating rapidly around here.

Reddit probably has the best I've seen but TheHousingBubbleBlog also has a nice nesting system so it's easy to skip over the personal battles.
KirkH | Homepage | 03.20.08 - 2:15 pm | #

anonymous writes:
Sebastian, did you by any chance attend Oklahoma State University?
anonymous | 03.20.08 - 2:20 pm | #

Jim writes:
Recession OF CHOICE: ooohhhh that's goin' hurt Big Ben. Smack in the face. Couldn't diss him more than that. The Fed could have prevented it if it had acted sooner.

http://money.cnn.com/2008/03/20/ ...=rss_topstories
Jim | 03.20.08 - 2:21 pm | #

sam writes:
this is off topic but quite bizarre

http://www.cnn.com/2008/US/03/ 20...=rss_topstories
sam | 03.20.08 - 2:24 pm | #

Outsider writes:
CR - No date given by ECRI as to when they believe it started?

Our recession-sensitive business started showing signs of weakness around July, but December was a drop off the cliff month. So my guess would be somewhere between there, probably statistically in Nov-Dec.
Outsider | 03.20.08 - 2:25 pm | #

Jim writes:
Poor Americans may be dying in the streets with no health care, and others living under bridges with no homes, but dammit the Empire will go on and on and on. This empire is what keeps us going. It provides everything that we've got. I mean where would our economy be without our empire?

http://www.bloomberg.com/apps/ne..._bfA& refer=home

Empire first; America second.
Jim | 03.20.08 - 2:25 pm | #

ashkan writes:
If large banks are insolvent, the the Federal Reserve needs to be fired by Congress. This will never happen because of the power central banks have and the false hopes and illusions we have about central banking. So all of the talk will lead to more of the same. Cycles, bubbles, crashes, insolvency, bankruptcy, debt servitude, homelessness, hunger, etc.
We will go where the central banks take us because we are powerless over the government, the mass media, and the monetary system. If central banking takes us up to phoney prosperity and fictitious capital due to artificial stimulus, up we go. if the system(ponzi scheme) gets crashed through deregulation and non-regulation of predatory lending, shadow banking, worthless debt derivatives, etc...down we go. We go where we are taken. I don't care what the cheerleaders of insolvency say.
ashkan | 03.20.08 - 2:26 pm | #

FiveAcres writes:
Peter:

Conjure Bag is mp's imaginary friend: sort of like Edgar Bergen with Charlie McCarthy.
FiveAcres | 03.20.08 - 2:26 pm | #

michael schumacher writes:
we have our own Sebastian over at TBP...his name is Cinefoz...

They seem to share the same hopelessly optimistic stance on recovery that will be driven by home price appreciation.....this year.

And on that note......
"how high is the ted spread mama"

"2.1 and risin'"

for you man in black fans.

Ciao
MS
michael schumacher | 03.20.08 - 2:27 pm | #

Outsider writes:
Sort of. But a little more creepy.
Outsider | 03.20.08 - 2:27 pm | #

martha writes:
it would be great if first time buyers smart up and insist on tax abatements (say, no property taxes for 30 years) in order to buy.

that will compensate them for the run up in home prices, shifting the tax burden to current home owners that enjoyed the bubble.

what do you think?
martha | 03.20.08 - 2:29 pm | #

Dirk van Dijk writes:
Peter,
Conjure Bag is the alter ego of mp. As I understand it conjure's closest relative is cousin it from the Addams family. Conjure has been a very accurate forecaster of events in this downturn. He is fond of good cigars and sigle malt scotch and loves to feast on ponies and dog testicles. Now some unbelievers, may think that Conjure does not exist, that it is just a fictional convention that mp uses to make his own predictions. However that interpritation strips some of the fun and magic out of this site.
Dirk van Dijk | Homepage | 03.20.08 - 2:30 pm | #

--Andrew writes:
I'm not sure this is it (sorry for stepping in to the fray mp) but there's a reference to conjure bags here.

http://en.wikipedia.org/wiki/Mojo
--Andrew | 03.20.08 - 2:34 pm | #

Turbo writes:
In know I'm wasting my time here, but Sebastian, according to your way of reasoning, the economy in Japan 1990 - 2005 was just fine. I mean unemployment never went that high, outright periods of economic contraction were relatively brief, and net the economy did grow over that time frame. Never mind that that that your house/condo is still worth less than half what you paid for it, or your retirement portfolio is worth 1/3 of what it was worth in 1989. I agree that one needs to avoid panic and make good long-term decisions when it comes to investing, but the logical fallacies in your permabull fantasyland are truly stupifying.
Turbo | 03.20.08 - 2:35 pm | #

--Andrew writes:
OT - But did anyone notice these articles from Bloomberg? I'd say there's continued panic in the streets.

Treasuries' Scarcity Triggers Repo Market Trading Failures
http://www.bloomberg.com/apps/ne...a4eg& refer=home

Fed Bypasses Emergency-Loan Policy on Rate for Securities Firms
http://www.bloomberg.com/apps/ne...gD3Q& refer=home
--Andrew | 03.20.08 - 2:36 pm | #

bacon dreamz writes:
OT: a bunch of guys from CFC start a new mortgage company called "PennyMac":

http://pnmac.com/management.htm
bacon dreamz | 03.20.08 - 2:37 pm | #

Tank writes:
Holy Crap!!!! This just came from the NY FED regarding the TSLF:

"The first TSLF auction will be a loan of Treasury securities against Schedule 2 collateral rather than against the Schedule 1 collateral previously proposed. To facilitate the operational processes of the facility, the Federal Reserve has also expanded the list of eligible collateral for Schedule 2 to include agency collateralized-mortgage obligations (CMOs) and AAA/Aaa-rated commercial mortgage-backed securities (CMBS), in addition to the previously announced AAA/Aaa-rated private-label residential mortgage backed securities (RMBS) and OMO-eligible collateral."
Tank | 03.20.08 - 2:39 pm | #

ac writes:

Ok Kids - Riddle Me This...

Why is the market surging on more bad news...seriously

We'll if the hedgies are unwinding their positions in commodities, they have leverage up some other asset class. Maybe they'll try going back to stocks.

The hedge fund industry has to create bubbles to survive.

These hedge fund managers are going to keep creating bubbles until their lender cuts them off and the landlord throws them out of their offices and locks the doors.

ac | 03.20.08 - 2:40 pm | #

Tank writes:
TSLF Announcement: http://www.newyorkfed.org/newsev...8/ rp080320.html
Tank | 03.20.08 - 2:41 pm | #

Drew writes:
Martha, the only compensation I want (as a first-time buyer) for the runup in housing prices, is a significant DECLINE in those prices.

Government will get their money no matter what, no sense trying to bargain with 'em.
Drew | 03.20.08 - 2:41 pm | #

Sebastian writes:
anonymous said: "Sebastian, did you by any chance attend Oklahoma State University?"

Nope.


S.
Sebastian | 03.20.08 - 2:42 pm | #

cd writes:
cit-Neg
Philly-Neg
jobless-Neg
t-bills-Neg
Stocks-Pos..
I'm convinced..They are holding the line on the market...Shorts are being forced to be long..

Kind of like the spam I get every 5 minutes stating a penis extension is what you need..
cd | 03.20.08 - 2:43 pm | #

Rob Dawg writes:
Conjure Bag is mp's imaginary friend: sort of like Edgar Bergen with Charlie McCarthy.
FiveAcres

Some of you are just jealous that the little voices are only talking to us.

Note to all; please don't feed the troll.

CR; my sympathies with this intractable problem.

On topic. I called the top of the housing bubble Oct 6th, 2005 shortly after breakfast when my biweekly housekeeper announced in halting English that she had bought a house. It makes perfect sense then to use Oct 6th, 2007 as a reasonable start of the recession. Two weeks previous the Fed kicked off with a 50bp cut. It is also near the start of the Federal FY that was forced to acknowledge larger deficits. Good as any start date.
Rob Dawg | Homepage | 03.20.08 - 2:44 pm | #

Kirk Spencer writes:
Sebastian, wanting a YOY quarterly GDP decline of 1% is quite a demand for proof.

For example, the 2001 recession (March 2001 - November 2001) had quarterly YOY returns of +2%, +1%, and +0%.

Or there's the 1990-91 recession, which started in July. We saw negative 1% in QI-1991 - the third quarter of the recession. The first quarter of the recession - III-1990 - had a quarterly YOY real GDP of +2%.

In the 1981-1982 recession, the opening quarter of the official recession had a +4% yoy change in its first quarterly real gdp. We hit our first negative YOY in the third quarter of that recession - QI-1982.

That, sir, is 3 for 3 of the preceding three recessions. As I told you the LAST time we went through this, YOY is a LOUSY test for the start of a recession.

Your tests are late coincident. We'll see them, if we're in a recession, in about 3-6 more months.
Kirk Spencer | 03.20.08 - 2:46 pm | #

Kicker writes:
Repost of an earlier article on repos and money market funds:

http://www.kiplinger.com/ columns...alance0319.html

Not sure we're talking about the same thing, but a lot of money market funds consist of a big chunk of repos from the big investment banks and primary dealers.

I'm guessing a repo failure would mean that the MM fund had delivered the cash but never was delivered the securities backing it. That would mean that if the counterparty went under they MM fund would have to line up with other unsecured creditors?

Just to keep all those who are holding Treasury MM funds, they hold mostly repos.
Kicker | 03.20.08 - 2:47 pm | #

Turbo writes:
Financials are up size today. Apparantly the next failure of a large financial institution will be meaningless because it's already priced into financial stocks. I heard that on CNBC, so it has to be true.
Turbo | 03.20.08 - 2:48 pm | #

Anonymous writes:
Tank-

AllenM: "Someday this wars gonna end"
FED: "No, it ain't"
Anonymous | 03.20.08 - 2:48 pm | #

JJL writes:
WOW! Those TSLF requirements are not as far from my joke type qualifications from the other day:

From Bloomberg:
!For Immediate Release!
Federal Reserve Rejects Certain Assets for Use in the TSLF

The Federal Reserve has issued guidelines on the types and quality of assets that can be exchanged at the months end TSLF. To answer repeated queries from participating banks, the following is a list of non qualifying assets:

-Horses with horns glued to their head (not a true unicorn; true unicorns ARE accepted)
-Charmin toilet paper, unscented only
-Enron preffered stock certificates
-Pet Rocks
-Cabbage patch kids
-Ishtar special edition DVD's
-E.T. the Extraterrestrial Atari 2600 video game cartridges
-Free tanning Booth vouchers (we mean it Mr. Mozillo!)

Please contact your local Federal Reserve Branch bank for more information.
JJL | Homepage | 03.20.08 - 2:48 pm | #

Sebastian writes:
Turbo said: "In know I'm wasting my time here, but Sebastian, according to your way of reasoning, the economy in Japan 1990 - 2005 was just fine."

I believe if dryfly were here, he would say "the U.S. isn't Japan." I've never analyzed the Japanese economy and its responses to economic indicators, monetary policy, etc., only the U.S.

For all I know, the major indicators for the Japanese economy accurately forecast their real estate bubble and their terrible multi-year stock performance.


S.
Sebastian | 03.20.08 - 2:50 pm | #

girlbear writes:
OT
Fannie and Freddie just got their capital requirements lessened.........the bailouts continue!
girlbear | 03.20.08 - 2:50 pm | #

OriginalFrank writes:
Geoff writes:
Sebastian is out riding your pony, and after he breaks its leg, he's going to shoot it, just to spite you.
Geoff | 03.20.08 - 1:23 pm | #

And then point out that there is only one small bullet hole in the body, so it is actually quite all right and will be carrying you around again shortly.
OriginalFrank | 03.20.08 - 2:51 pm | #

dude writes:
And now for more entertainment...

Sebastian, will you sing us your version of, from the musical, "Cinderella",
"In my own little corner, in my own little room"?
I think it would be a fitting song right about now, yes?
dude | 03.20.08 - 2:52 pm | #

Anonymous writes:
Sebastian

"Why are you so foolishly sensitive when somebody is telling you the truth?"
-Nation of Islam leader Louis Farrakhan
Anonymous | 03.20.08 - 2:55 pm | #

thoth writes:
Unambiguously in recession.

Everything about money is ambiguous, bubbas.

Why do we listen to these chaffspouters?
thoth | 03.20.08 - 2:56 pm | #

Client #9 writes:
Sebastian: the danger signal is not when the yield curve inverts, it is when it shift back to a positively-sloped curve (~11 months ago)
Client #9 | 03.20.08 - 2:56 pm | #

johnny m writes:
I truly disagree with those calling Sebastian a troll. Although I often disagree with him, he brings a welcome contrarian viewpoint, usually supported with some data.

But I would then put a question to Sebastian. Isn't it possible that we've now entered a period in which we test the predictive power of the Wright Model B? I know you cite other indicators, but that seems to be the strong one for you. I would say that I agree with Roubini on one of his main points. The so-called "Bretton Woods II" consensus now appears to be coming apart, and that may be a factor in casting doubt on predictive models created in the post-1970 period. But even prior to that, Minsky's famous instability thesis predicted just this kind of "ponzi" economy. Surely you cannot dispute the fact that the rank speculation of the last few years has fully distorted the ability to make fully declarative statements about the economy. Hence the counterparty risk I keep reading about.
johnny m | 03.20.08 - 2:57 pm | #

JJL writes:
Sebastian,
Do not try and bend the spoon, that is impossible. Only try and see the truth.

There is no spoon.
JJL | Homepage | 03.20.08 - 2:59 pm | #

Red Pill writes:
Tank writes:
TSLF Announcement: http://www.newyorkfed.org/newsev...8/ rp080320.html
Tank | 03.20.08 - 2:41 pm | #

Damn. Just damn. I know there is going to be a bailout of some sort but I was hoping it wouldn't be too huge. This is pointing in he direction if a huge taxpayer funded bailout. And it will be ultimately for naught.

The only thing keeping this mess from deteriorating very quickly is the general ignorance of the population regarding financial and economic matters. But more and more people are getting pissed enough to say some pretty blunt things in the media.

tick, tick, tick. . .
Red Pill | 03.20.08 - 2:59 pm | #

Anonymous writes:
Financials celebrating buy using our money to buy each others' stocks
Anonymous | 03.20.08 - 3:02 pm | #

Drew writes:
Now going long on canned food...
Drew | 03.20.08 - 3:02 pm | #

Kicker writes:
I believe if dryfly were here, he would say "the U.S. isn't Japan."

- Equity bubble, check
- Real estate bubble, check
- Bubbles peak 40 years after peak in births, check
- Decades of easy credit, check
- Insolvent banks, check
- Central banks taking rates to zero, check

Nope, nothing like Japan. They had households savings and an export based economy to help cushion the blow.
Kicker | 03.20.08 - 3:03 pm | #

VennData writes:
Well... the ERCI initially went in to look for Weapons of mass destruction, but have suddenly found this.
VennData | 03.20.08 - 3:03 pm | #

Anonymous writes:
"johnny m writes:
I truly disagree with those calling Sebastian a troll. Although I often disagree with him, he brings a welcome contrarian viewpoint, usually supported with some data"

Then please start a blog with him and get the hell out of here.

Please.
Anonymous | 03.20.08 - 3:03 pm | #

squeezed writes:
ECRI's methodology is sound. When they say we're in recession then it's simply the case. The question is if we'll get 2 quarters of negative growths (as in the official definition) or if we'll stick with just this quarter, qualifying for something between a mid-cycle downturn and a real recession.

OJ are you going over to the dark side?



Conjure bag is big mojo. Doubt him at your peril! Mp confirmed that he is also a relative of Maximon.
squeezed | 03.20.08 - 3:03 pm | #

Anonymous writes:
"Financials celebrating buy using our money to buy each others' stocks
Anonymous"

No, that was yesterday. Every index fund manager was forced to buy VISA at inflated market prices. That was pure juice for the banks. Yes, they stole your money. No, you won't see it back again, ever.
Anonymous | 03.20.08 - 3:05 pm | #

Turbo writes:
Sebastian, claiming ingnorance doesn't excuse your poor analysis. The US isn't Japan, but do falling equity values, falling property values and growing paralysis in the financial system, coupled with a stagnant to recessionary economy, sound familiar? Oh, and unemployment never got above 5%, but things were so good there they refer to it as the lost decade. Cherry picking and only partially answering only makes you look more foolish and ignorant.
Turbo | 03.20.08 - 3:06 pm | #

scotty in the heather writes:
Re: Civil War Economics & Bernanke Distribution Correlations

My new thesis, here, on-the-fly has to do with generational mis-interpretations of outdated models. In the case of The Fed, circa 2008, I wonder if the interpretation of The great depression and modeling is complicated by the fact that the disparity between currency and commodity hedging of 1929 is not related to treasury yield and dollar values in 2008. Put another way, using The Great Depression as a default parameter is like using a single common sink sponge to mop up the water in a tsunami; the sponge has relative meaning, but the dynamics of the tsunami are so out of proportion, that the sponge is meaningless in regard to any comparative values.

In a nutshell, Bernanke can study deflation in terms of an event 80 years ago, but it has no basis for reality in our derivative chaos today, thus his current models and theories which take into account irrelevant correlations -- only add to the confusion, and hence add chaos to solutions.

I'm fond of quoting Einstein, when he suggested that "you can't solve a problem on the same level from which it was created".

Amen.2a
scotty in the heather | 03.20.08 - 3:06 pm | #

Sebastian writes:
Kirk Spencer said: "That, sir, is 3 for 3 of the preceding three recessions. As I told you the LAST time we went through this, YOY is a LOUSY test for the start of a recession."

Numerous false signals cause large cumulative losses and errors, which is why I calculate using year-over-year methodology.

Just because *you* can't make it work doesn't mean *I* can't, when I'm using it in concert with other independent indicators that confirm/deny the signals, along with my understanding of Fed activity and business cycles.

As I said before, if I'm wrong, we'll all know soon enough. And if I'm right, people will find another way for me to be wrong.:)


Sebastian
Sebastian | 03.20.08 - 3:07 pm | #

scotty in the heather writes:
Economics Jokes

http://www.nd.edu/~jstiver/jokes.htm

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?
scotty in the heather | 03.20.08 - 3:11 pm | #

Sebastian writes:
Turbo said: "Sebastian, claiming ignorance doesn't excuse your poor analysis."

Ignorance of the Japanese economy and its measures are just about the best excuse for not understanding it that I can think of.:)

What would be *truly* deceptive would be for a poster to imply that he understood the U.S. economy based on a poor understanding of the Japanese economy.


S.
Sebastian | 03.20.08 - 3:13 pm | #

Optimistic Joe writes:
Do I need to state that the stock market will still rise sharply while commodities will cecline the sharpest in this decade? So, if we get a fully blown recession to begin with, it will be very short.

I'll think about buying SLV again below 9-10$ and am currently very comfortable being short.

O-Joe
Optimistic Joe | 03.20.08 - 3:13 pm | #

nades writes:
All, thanks....
nades | 03.20.08 - 3:16 pm | #

Turbo writes:
Sebastian, that may be the dumbest economic pronouncement I've ever heard a semi-informed person make. Do yourself a favor and put what money you have into a blind trust and consider a career in politics, where authoritative economic ignorance is beneficial.
Turbo | 03.20.08 - 3:22 pm | #

scotty in the heather writes:
Re: Do I need to state that the stock market will still rise sharply

No, because that is based on an opinion supporting the increase of volatility related to lower yields, which is related to short term yields crashing in a panic, while a few daytraders pump up a stock market based on thin air.
scotty in the heather | 03.20.08 - 3:23 pm | #

dav writes:
Sebastian, the one piece of data that you mention often is the jobs number. You stated above that 750k non-farm job losses may convince you, but that the unemployment rate is still low.

Given that the recent economic downturn is centered on the housing bubble, where do construction, realtor and broker jobs fit in? If I understand the numbers correctly, non-salaried jobs like these aren't included in the official "payroll" numbers. Aren't there a significant number of these jobs which have disappeared? Unfortunately, I don't know of a decent source to find out what the reality is.
dav | 03.20.08 - 3:25 pm | #

Sebastian writes:
Turbo said: "Do yourself a favor and put what money you have into a blind trust and consider a career in politics, where authoritative economic ignorance is beneficial."

My friend, let me ask you this: If you needed heart surgery, would you want a heart surgeon or a brain surgeon to do the operation?

Would the heart surgeon be incompetent to do the operation because he wasn't a brain surgeon?

Because that's sort of the argument you're making, that since I'm unfamiliar with a foreign country I'm equally unfamiliar with my own.


S.
Sebastian | 03.20.08 - 3:28 pm | #

Hit the Bid writes:
I just puked up a bunch of SKF all over my new shoes. Ouch.

If only I'd held out and started buying at these levels, that perhaps could have worked out better.

Damn future...so unpredictable.
Hit the Bid | 03.20.08 - 3:34 pm | #

Sebastian writes:
dav said: "Given that the recent economic downturn is centered on the housing bubble, where do construction, realtor and broker jobs fit in? If I understand the numbers correctly, non-salaried jobs like these aren't included in the official "payroll" numbers."

Doesn't matter to me, I'm talking about losses in the official numbers. In a real recession, the problems are too big to hide, and even the official job-losses will be large.

Here's a link that will allow you to get a breakdown of jobs by industry sector.

http://www.bls.gov/webapps/legac...cy/ cesbtab1.htm


Sebastian
Sebastian | 03.20.08 - 3:37 pm | #

RE writes:
Why do people engage this truly ignorant fellow constantly in conversation. Seb is simply out for attention and far out of his depth. He brings no cogent points and with few exceptions the only people that like him are those who just joint recently and don't have a clue themselves.

Ignore him, finally, and then we can have a much more productive conversation.
RE | 03.20.08 - 3:41 pm | #

Turbo writes:
Sebastian - forget the twisted analogies - you're dismissing a similar set of economic circumstances just because it happened in another country, and claiming that it therefore has no relevance. You're also denying the possibility that the economy is contracting, even though almost all economic indicators point to that conclusion. Denial is not a sound investment strategy. The last time I had an extended discourse with you I explicitly warned you that NEW was a terrible investment. Clearly I was wasting my time then, as I am now.
Turbo | 03.20.08 - 3:42 pm | #

Turbo writes:
RE - totally agree. Last time I get sucked into that black hole.
Turbo | 03.20.08 - 3:44 pm | #

Kirk Spencer writes:
um. You gave a test for "in a recession". I ran your test, as stated, against past recessions. The test failed to show the start of a recession.

And now there's a mysterious way to make it work by incorporating other information, which is why my attempt to use your test failed.

OK. I'm done.
Kirk Spencer | 03.20.08 - 3:47 pm | #

probert writes:
What's NEW? Is that a stock? I'm putting it in my stock ticker but it's not giving anything...
probert | 03.20.08 - 3:54 pm | #

Missed Information writes:
major trollhouse up there, couldn't finish reading the comments.

Once community grows above certain threshold, login system needs to be implemented, with ignore switches.
Missed Information | Homepage | 03.20.08 - 3:57 pm | #

Sebastian writes:
Turbo said: "Sebastian - forget the twisted analogies - you're dismissing a similar set of economic circumstances just because it happened in another country, and claiming that it therefore has no relevance."

Claiming that I don't know or pretend to know or understand what the relevance is. Not the same thing.

You're pretending to know what the relevance is, when you don't. Different countries, different corporate/social cultures, different tax structures, different central bank policies. For all I know (and all you know) a healthy unemployment rate for Japan is completely different than a healthy unemployment rate in the U.S., Germany, Sweden, etc.

I don't understand why I'm so threatening to you. My position is that millions of Americans *aren't* going to lose their jobs and/or their homes. Surely that's a good thing.


Sebastian
Sebastian | 03.20.08 - 4:03 pm | #

sam writes:
http://www.businesscycle.com/new...ews/press/1478/
sam | 03.20.08 - 4:07 pm | #

sam writes:
dow up 266. And, I thought we were in a recession. All is safe
sam | 03.20.08 - 4:08 pm | #

Sebastian writes:
Kirk Spencer said: "You gave a test for "in a recession". I ran your test, as stated, against past recessions. The test failed to show the start of a recession."

Sorry, major misunderstanding on my part, and that's my fault.

You were asking for conditions at the *beginning* of recessions, but that was in response to a previous post when I was referring to *being in* recession, when another poster asked under what conditions I would admit I was wrong.

Sincere apologies, I was not trying to be deliberately obtuse or evasive with you.


Sincerely,

Sebastian
Sebastian | 03.20.08 - 4:09 pm | #

probert writes:
Guys, just DROP IT

Sebsatian, if the NBER does not declare recession and GDP growth picks back up again, I will be the first one to congratulate you. I will send CR a photoshop image, some sort of electronic collage/postcard. I swear to stand by this promise. It will hail you as having been right, and it will post quotations from people who criticized you, like Turbo is doing now, exposing their foolishness, with their names attached. This will be your trophy for everyone to see.

However, if the NBER *does* declare recession, you're gonna be a man (if you in fact have a penis with two balls) and behave the right way.

Now let us wait for NBER.

The End.
probert | 03.20.08 - 4:10 pm | #

tg writes:
I'll think about buying SLV again below 9-10$ and am currently very comfortable being short.


wow you may be right but I will be on the other side. Good luck
tg | 03.20.08 - 4:17 pm | #

Windowdog writes:
Does ECRI actually do anything other than call recessions? I mean I'm sure they do but you only hear about them about once or twice a decade it seems. Who gave them this job anyways?
Windowdog | 03.20.08 - 4:24 pm | #

Sebastian writes:
probert said: "However, if the NBER *does* declare recession, you're gonna be a man...and behave the right way."

As I've already promised to do, at least twice before.

However, the problem is the same as it often is here: Personality (who's right?) instead of substance (what's next, and what do we do about it?).

If the U.S. economy is indeed headed for recession, we're looking at several hundred thousand net job-losses off of non-farm payrolls. Depending on the severity of the recession that number could run into the millions.

Anyone who thinks housing is in trouble now is truly clueless as to what trouble really is if that's where we're headed, never mind vastly underestimating the total fall-out.

So, as you can see, this is not just a silly-ass game for me just because some posters would prefer to keep it on that level.


Sebastian
Sebastian | 03.20.08 - 4:28 pm | #

Quincy k writes:
Why do people continue to respond to this Sebastian character?

He probably still thinks the Patriots won the Superbowl.
Quincy k | 03.20.08 - 4:31 pm | #

Turbo writes:
Sebastian - Clearly I'm not threatened by you - I'm not even that bearish, yet I can't help but find your postings borderline moronic. Best of luck to you.
Turbo | 03.20.08 - 4:33 pm | #

Sebastian writes:
Turbo said: "Sebastian - Clearly I'm not threatened by you - I'm not even that bearish, yet I can't help but find your postings borderline moronic."

Well, that's a pity, because I don't find your postings moronic (not fixable), just uninformed (fixable).

Best of luck to you, as well.


Sincerely,

Sebastian
Sebastian | 03.20.08 - 4:40 pm | #

Fair Economist writes:
Stocks are up because they are the only reasonable long-term investment at the moment. Commodities are in a bubble. Real estate is a bursting bubble. Bonds have ridiculously low interest rates even if you ignore the considerable inflation risk. Even cash has inflationary depreciation, with, again, substantial risk.

Stocks, OTOH, with a PE around historical averages, are a good long-term buy. Long-term, they will be worth about what they are now. So money flees there and drives up prices.
Fair Economist | 03.20.08 - 4:45 pm | #

m writes:
THE CREDIT CRUNCH IS OVER! WE ARE ALL IDIOTS!

4:31 Regular discount window borrowing rises to $120 billion
4:31 Bear Stearns borrows daily average of $5.5B from Fed
4:31 Investment banks borrow daily average of $13.4B from Fed
4:31 Investment banks borrow $28.8 billion from Fed on Wednesday
m | 03.20.08 - 4:49 pm | #

Turbo writes:
Oh Sebastian, I guess we can go on trading barbs until I give up and let you get the last one in, but if you honestly think my posts are uninformed, you really need to seriously sit back an examine your frame of reference.
Turbo | 03.20.08 - 4:51 pm | #

Scott writes:
"Options Expiration Day" - thanks to all who responded.
Scott | 03.20.08 - 4:51 pm | #

Fair Economist writes:
Checking up on that discount window news, I ran across this Newspeak doozy:

Morgan Stanley and Goldman Sachs Group Inc. said yesterday that they borrowed to ``test'' the new lending facility, while Lehman Brothers Holdings Inc.'s financial chief said the company was using the facility to ``show some leadership.''

Kind of like leading the rest of the soldiers into an "unanticipated strategic withdrawal", eh? And what, exactly is being "tested"? Whether they can survive a cash crunch using it? Can't help but wonder whether that's a field test.

Oh, and *I* remembered to put in the link. :-P
Fair Economist | 03.20.08 - 5:10 pm | #

GSM writes:
Sebastian is a figment of his own imagination. Far too much comment is given over to that stupid trolling and I agree with other comments that the quality of discourse could be far better than its current flippant level.

An excellent blog but unfortunately too many childish commenters.
GSM | 03.20.08 - 5:30 pm | #

m writes:
the new subprime mess with a different name. here we go again.

http://www.housingwire.com/2008/...ing-18-percent/
m | 03.20.08 - 5:36 pm | #

Mr. Bail Out writes:
Sebastian is one of those guys who won't admit there is a slowdown before there's a depression, so give him a break. Who cares. This thing is going to get worse before it gets better. The flu is next hitting Europe and Japan and that's when it starts to get interesting. Japan doesn't have a real estate bubble, or actually the old one still deflating, but Europe, oh that Europe what a bunch of nice bubbles and those strong currencies hitting the exports..
Mr. Bail Out | 03.20.08 - 7:55 pm | #

BrantW writes:
Seb,

Note that if the government had not fudged the BLS method for computing CPI, we would have been in recession for quite a while now.

What was the GDP deflator used for 4Q 07.....8%.

Do you really believe that inflatoin was .8% in 4Q 07?

You can say 'you know what you know...." But in reality, what you are saying is "based on the numbers that the government publishes....which I believe in my heart are true and honest, I know what I know".

In most of our opinions...that makes you a sucker for being taken in by such blatant lies.
BrantW | 03.20.08 - 9:48 pm | #

Owen B. writes:
the crux of ecri's dilema in being "late to the recession call party" as someone put it seems to be that they held out hope that policy makers would move quicker given the data last year. that may have been naive on their part, but they were in a pickle -- what if all the stimulus that has recently been enacted happened earlier?
Owen B. | 03.21.08 - 6:33 am | #

Owen B. writes:
link to ecri's January '08 analysis AGAINST recession... http://kirklindstrom.blogspot.co...-window- of.html
Owen B. | 03.21.08 - 6:38 am | #