ROBERT SHILLER: “DOUBLE DIP MAY BE IMMINENT”

While Bernanke continues to deny the potential of an economic downturn and tries to convince the market that he can save the economy with his impotent monetary policy, reliable and trustworthy economists like Robert Shiller say the Fed is out of bullets and the risk of a double dip is “imminent”:

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • kwon zang

    Bernanke continues to run with the fanatsy of keeping this mess alive. How many more times will he hook up the electrodes to jump the markets into activity?

  • Captain America

    How about Shiller for Fed chief. Now that’s a guy I could get behind.

  • http://MercenaryTrader.com Mike McDermott

    So is the goal to inflate another bubble in a new asset class? Is that what we need in order to classify the economy as “recovering?”

    At Mercenary Trader we’re loaded for bear with exposure to precious metals and a nice short position in consumer retail.

    The market may like the words, but the long-term consequences are anything but soothing.

  • mj

    TPC:

    I have a question for you regarding the bond market and how further QE and/or an attempt to induce inflation would affect it. My view is that any action by the Fed which would create inflation would have a negative effect on the bond market, thereby causing a huge wealth loss for pension funds, etc. and this is a factor that will limit Bernanke’s QE actions. Does this make sense to you or am I off base ?

    Thanks

  • http://www.pragcap.com TPC

    He’s certainly a guy I could feel confident in.

  • http://www.pragcap.com TPC

    Hi Mj,

    Have you read this? http://pragcap.com/quantitative-easing-the-greatest-monetary-non-event

    Near-term we’re dicey here. I don’t deny that bonds look overextended in the short-term, but ultimately I do not believe there is a bubble and I certainly do not believe that QE will be inflationary.

  • Sandals

    OK – he makes a couple good points but have a real problem with this guys for several reasons:

    This is the same genuis who gave Obama an A- for his economic plan in April 2009. When those plans were clearly misguided and focused on bigger Government (18% of economy) rather than the higher potential impact that could have been realized in the private sector – especially small business which represented a much larger 68% of our economy.

    This is the same guy that believes the $800 billion plus stimulus plan – that was massively focused on consumption rather than on real infrastructure was – “A” OK.

    The same guy that thought the focus on trying to get Americans to go further into consumption debt, even though they were already at a record 130% debt to income ratio was only “slightly problematic”

    Also, the same guy that was Ok with Giethner reinforcing the concept of “too big to fail” rather than implenting ways to eleviate the systemic burden and monopolistic presence of these institutions. And lastly this is the same guy who thought bailing out big auto was “more good than bad.”

    The only thing he really got right was the housing bubble – and pardon the obvious but that really wasn’t a tough call – yet he’s treated like a wise sage in the media. Isn’t it great being an Ivy League elite – even though your usually wrong everyone in the media thinks you’re soooo impressive.

  • mj

    TPC:

    Thanks for your response. I previously read your QE post and am in agreement with it. Let me take out the QE part and restrict my question to the inflation part. Is an increase in inflation negative for the bond market, since presumably this would increase interest rates thereby reducing the market value of existing bonds ? It seems to me the Fed is in a corner with ZIRP. If they increase rates the bond market will take a hit and if inflation expectations are created, even if unjustified, this might be restricting their application of further QE. Does this make sense ? Do you think the Fed cares if the bond market takes a hit ?

  • joe

    Let me see if I get this right. This guy things business leaders are wrong in projecting out into the future with graphs and numbers etc. But yet he projects out what the economy is going to do and thinks we should hire an additional person for each classroom because the economy is going to stink in the future. The guy is an idiot in my opinion.

  • John Mc

    I don’t like that the only ideas he articulated were the creation of more public sector jobs, i.e. the teacher’s aide concept and additional hiring by state and local governments. In NJ, where I live, the only job creation we’ve seen in the last 10 years has been government jobs, and it hasn’t led to anything sustainable outside of the need for ever increasing taxes on the private sector to pay for them. Surely he can come up with better ideas than that?

  • John Mc

    TPC — Can we get rid of the PSW shill?