BYRON WIEN: ECONOMY HAS DISAPPOINTED
Byron Wien’s outlook and predictions are always interesting, but I found this interview to be particularly enlightening. Not because Wien prognosticates about the markets, but talks about where he has been right AND where he has been wrong. Wien admits that the economy has been much weaker than he suspected and that the sustainability of corporate earnings is highly suspect. He eats a bit of crow and discusses where his outlook has disappointed. It’s a nice change of pace for Wall Street analysts – too many of whom make broadly incorrect predictions and are never held to task. Luckily for Wien, his prediction of a flat stock market in 2010 is looking pretty good so even while he admits to missing some of the macro factors he’s also gotten many things correct. It would be nice to see more of this rational thinking and accountability on Wall Street:
Source: CNBC
Joe CNBC has always backed business irregardless of behavior and irregardless of the impact of the worker. Joe CNBC’s business philosophy is exactly why this nations cash flow generated by taxation is not unable to sustain it’s – cash flow on its liabilities.
Joe’s thinking is based on all the flawed economic models that say firms always try to maximize profits. As we’re finding out now, there are times (like times of high debt) when firms are actually more concerned with paying down debts, cutting the fat, and just surviving. Just look at the whole US banking sector.
He isn’t saying that firms always try to maximize profits. He is just saying that our economic system is based on the effort of corporations and individuals to make a profit, and that Obama should recognize that. He isn’t saying that there shouldn’t be regulation or oversight. The housing and mortgage mess we are in is a failure of (1) the regulators – Congress in particular, but Clinton and Bush also played roles – in the incentives they provided in the origination of loans through FNMA and Fannie Mac, (2) the Fed, in keeping interest rates too low for too long, (3) the rating agencies such as Moody’s and S&P, and (4) the banks that were securitizing the trash loans (with the help of the government) and selling the securities to investors.
The first two of those four are government entities, and the third (the rating agencies) only have power because of the intervention of government in the market. I disagree with a lot what Joe says (on the rare occasions when I watch CNBC) but I think he is right here. I think you are reading to much into what he is saying when you say he is saying that firms always try to maximize profits. He did not say that at all. Our economic system (capitalism, the worst in the world, except for all the others, to paraphrase Churchill) is based on people trying to make a profit, and unfortunately Obama doesn’t seem to realize that.
Mr. Wien is what is known as a useful id***. He can’t even recognize that Obama has tried to nationalize every industry he has come in contact with. That alone makes Wien dangerous because of his position within the finance community. The fact that he could not even perform basic math ( or read the work of those who have , like Consumer Metrics) marks him as borderline incompetent. At least two months ago it was obvious from the articles on this site alone that Qtr 2 GDP was going to be on the order of 1-1.5 after final revisions. The very week that BLS put out the 2.4 print, GS had already revised it down to 1.7 in their opinion.
Too bad Milton Friedman isn’t around, and couldn’t participate in this conversation with Wien, Quintanilla, and Kernen, but in an interview with Phil Donahue, decades ago, it seems like he was. 2 1/2 minutes.
http://www.youtube.com/watch?v=RWsx1X8PV_A
Wien is one of these guys whose job it is to go around to CNBC, Bloomberg, WSJ and investment conferences and pontificate – making it seem like there is some real important macro research going on at these firms and generating some action for the brokerage side of the business.
I’m sure the big swinging dick traders at whichever firm Wien happens to be with regard the guy as a complete joke and fade everything he says.
My guess is the heads of the big Wall Street firms gather round the bar at Shinnecock once a year and draw straws as to who will employ Wien as their “market strategist”.
Barton Biggs probably falls into the same category. These guys may work at hedge funds or IBs, but I guarantee you that they are not allowed anywhere near the actual trading desks. They probably don’t even know what floor they’re on.
he is on the buy-side…