Comments on: THE RECESSION ON MAIN STREET CONTINUES http://pragcap.com/the-recession-on-main-street-continues Sat, 26 May 2012 09:29:57 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: John Mc http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10684 John Mc Fri, 15 Jan 2010 04:37:03 +0000 http://pragcap.com/?p=15360#comment-10684 I doubt you are going to see the passing of the baton at any time this year. What evidence is there to suggest that's going to happen? Employment is still weak, and where people are employed, they are often at lower income levels (outside of Wall St. of course). My company took 40% paycuts a year and a half ago and we're all still thrilled to just be employed. I know that's anecdotal and no one should make forecasts via anecdote, but I think our situation is pretty widespread. The retail numbers out this morning underscore this. Corporations may have cost cut their way to profitability but that is not sustainable without growth in end user demand. Will end user demand increase when consumer credit is declining? Can you increase borrowing when consumers are deleveraging? Is the increase in commodity prices truly signaling a recovery? The last time that happened wasn't it the last hurrah before a near catastrophic deflationary collapse? There are trends at work here that are contradictory and unsustainable. If you are playing the "Don't fight the Fed" game, you're no doubt having a ball, but you should be very careful about making the assumption that you'll be smart enough or nimble enough to get out quickly when the music stops playing. I doubt you are going to see the passing of the baton at any time this year. What evidence is there to suggest that’s going to happen? Employment is still weak, and where people are employed, they are often at lower income levels (outside of Wall St. of course). My company took 40% paycuts a year and a half ago and we’re all still thrilled to just be employed. I know that’s anecdotal and no one should make forecasts via anecdote, but I think our situation is pretty widespread. The retail numbers out this morning underscore this.

Corporations may have cost cut their way to profitability but that is not sustainable without growth in end user demand. Will end user demand increase when consumer credit is declining? Can you increase borrowing when consumers are deleveraging? Is the increase in commodity prices truly signaling a recovery? The last time that happened wasn’t it the last hurrah before a near catastrophic deflationary collapse? There are trends at work here that are contradictory and unsustainable. If you are playing the “Don’t fight the Fed” game, you’re no doubt having a ball, but you should be very careful about making the assumption that you’ll be smart enough or nimble enough to get out quickly when the music stops playing.

]]> By: Iwenttoatoptenschool http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10668 Iwenttoatoptenschool Thu, 14 Jan 2010 21:38:13 +0000 http://pragcap.com/?p=15360#comment-10668 VCC- You don't get it. LTCM made a lot of money, from fees!! VCC- You don’t get it. LTCM made a lot of money, from fees!!

]]> By: boatman http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10660 boatman Thu, 14 Jan 2010 19:33:49 +0000 http://pragcap.com/?p=15360#comment-10660 the country voted for change and look what it got them. studying change by gun barrel, history tells me it's much worse.they are even bigger liars. it's basic human nature,we are in it for ourselves. its why capitalism works and socialism doesn't. it's why the left irks me more than the right does.the left tells us they're doing it for us.......liars even worse. the country voted for change and look what it got them.

studying change by gun barrel, history tells me it’s much worse.they are even bigger liars.

it’s basic human nature,we are in it for ourselves.

its why capitalism works and socialism doesn’t.

it’s why the left irks me more than the right does.the left tells us they’re doing it for us…….liars even worse.

]]> By: TPC http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10658 TPC Thu, 14 Jan 2010 18:24:16 +0000 http://pragcap.com/?p=15360#comment-10658 That's from a SocGen report. It's actually a few months old, but the data is essentially the same now as it was then. That’s from a SocGen report. It’s actually a few months old, but the data is essentially the same now as it was then.

]]> By: VCC http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10657 VCC Thu, 14 Jan 2010 18:02:57 +0000 http://pragcap.com/?p=15360#comment-10657 Great point, though I have to say LTCM was doomed from the start. I mean, when the whole premise of your shop begins with "The Markets Are Efficient", something bad is bound to happen to you. One question I have, can you elaborate on your source for Figure 1? The level of household debt is really intriguing and demonstrates how deleveraging has only begun. I'm curious to follow that number..it'd be great if we reverted to the mean in 2010, but I got a feeling it will take much longer to flush out all this excess. Great point, though I have to say LTCM was doomed from the start. I mean, when the whole premise of your shop begins with “The Markets Are Efficient”, something bad is bound to happen to you.

One question I have, can you elaborate on your source for Figure 1? The level of household debt is really intriguing and demonstrates how deleveraging has only begun. I’m curious to follow that number..it’d be great if we reverted to the mean in 2010, but I got a feeling it will take much longer to flush out all this excess.

]]> By: Slave http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10654 Slave Thu, 14 Jan 2010 17:30:14 +0000 http://pragcap.com/?p=15360#comment-10654 "...small businesses continue to struggle and consumers are still burdened with heavily indebted balance sheets." A debt slave is a bank slave. Small businesses and consumers are working so that the bankers can 'get paid'. I've had enough cake. CAN WE ALL, PLEASE, START A REVOLUTION!?!? “…small businesses continue to struggle and consumers are still burdened with heavily indebted balance sheets.”

A debt slave is a bank slave. Small businesses and consumers are working so that the bankers can ‘get paid’. I’ve had enough cake. CAN WE ALL, PLEASE, START A REVOLUTION!?!?

]]> By: TPC http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10651 TPC Thu, 14 Jan 2010 16:41:06 +0000 http://pragcap.com/?p=15360#comment-10651 Hadn't read that about Clarium. Thiel's a brilliant guy, but I hate the way he places big bets on one macro outcome. When he's wrong he's really wrong. That's essentially what LTCM did. No black swan protection in a portfolio like that.... Hadn’t read that about Clarium. Thiel’s a brilliant guy, but I hate the way he places big bets on one macro outcome. When he’s wrong he’s really wrong. That’s essentially what LTCM did. No black swan protection in a portfolio like that….

]]> By: VCC http://pragcap.com/the-recession-on-main-street-continues/comment-page-1#comment-10643 VCC Thu, 14 Jan 2010 15:07:02 +0000 http://pragcap.com/?p=15360#comment-10643 Great timing here given the dismal sales data out this morning. Not that disappointing news about the consumer will thwart the relentless melt-up higher. I just noticed that Clarium Capital lost 25% in 2009..safe to say Thiel wasn't net long..hope his investors stay with him a bit longer. Great timing here given the dismal sales data out this morning. Not that disappointing news about the consumer will thwart the relentless melt-up higher.

I just noticed that Clarium Capital lost 25% in 2009..safe to say Thiel wasn’t net long..hope his investors stay with him a bit longer.

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