Happy New Year! My Thoughts after Seeing “The Big Short…”

~By InsightAnalytical

Well, of course, the best time to release a movie about the 2007-8 economic crash is to release it during a holiday week at the same time the masses are being dished out “Star Wars”…again…

Being contrarian by nature, I made it over to see “The Big Short” which is based on the fantastic book of the same name by Michael Lewis.

Well, I went to the noon showing, this last day of 2015…the parking lot was full…of Star Wars fans, most likely.
I counted 20 people in for The Big Short. I was surprised there were that many…it’s only showing in one of the 3 movie complexes in town…seems it may be around for another week, but after that I bet it will be gone…

Of the 20, there were about 4 under the age of 60, probably in their 40’s/early 50’s.

Well, it was really gripping! It really was brilliantly done, esp. the asides with the “explanations.” I doubt, however, that many Selena Gomez fans will be in to see it, though.   I have to say the sleaze award goes to the guy based in New Jersey working for Merrill Lynch…figures.

After it ended I chatted with a woman who said they had lost $26 M in ethanol. Wants to get out the country (me, too!),  $300 for a visa to get out to Vietnam…or Cambodia ….or Thailand…Well, I cautioned her about a place like Vietnam being so dependent on China! Also, told her to watch “The Executioner” via MHzChoice (foreign TV series and one shot movies)….a Danish “movie” based on a true story…you will not want to go to Cambodia maybe after seeing the crap that goes on there. I also told her to read WallStreetWindow.com as well as Zero Hedge (but ignore most of the drek in the comments section…truly awful. I mean it…)
The truth is…with the global connectivity at this point, where is there anyplace “safe”??

She revealed that she had “insurance” in a safety deposit box…and I told her to get it out of that box in a bank!!!

When I got home I spotted the young man who works for Apple from home…he and his wife have just bought a house. I pulled over to say a final goodbye as he did his final move out of stuff….gave him the same info about a few sites that I gave to the woman at the movie and told him to save his money and learn what’s going on, not to keep all his retirement on one stock like Apple….exchanged phone numbers again and I gave him my email…told him I may not know all the answers, but I can figure out where to look most of the time…I’m sure I won’t hear from him again.

And then I came home. Hugged my dogs…and am checking my storage food for freshness…

***
Before going I was watching Bloomberg and the word SCARY came up twice from the anchors…the discussion has been about the 600,000 jobs gone from banking….. The site says 500,000 but they said 600,000 on air.
http://www.bloomberg.com/ne’sws/articles/2015-12-31/half-a-million-bank-jo…

They had a guy on talking about going into recession (for some reason I can’t find THAT video up on the site); the anchor brought up Marc Faber also forecasting that a day or so ago. Yesterday, I saw the mayor of Wilmington, DE talking about the loss of 1700 jobs from the DuPont-Dow deal…he was pretty grim….

Anyway, a couple of the people on air today looked pretty pale…and to hear the word ‘scary’ TWICE, no matter in what context…well, THAT was scary!!!

CNBC’s Fast Money is having a party at the moment…party hats, champagne, are they kidding me?? ….can’t even stand watching CNBC much anymore…Bloomberg seems a bit more “sober” but …where IS that video from the recession talker today??

Stay safe out there in the New Year….

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Pizza as an Economic Indicator: The Charts to Prove It…

~~By InsightAnalytical-GRL

Haven’t been posting lately because of family obligations….aging parents take lots of time…

However, I’ve been mulling over the investing scene in very brief spare moments.  It’s a process of re-education, after nearly 20 years of “buy and hold.”   No more of that. Oh, it’s OK to hold, but it’s time to learn how to take money off the table.  Being 20 years OLDER puts some urgency behind this effort.

Trying to understand technical analysis, learning about business cycles, you name it.  Then, trying to figure how that all actually fits in during a time when NOTHING is normal!

Of course, most of the official economic numbers are pure fiction, as is the story about how everything is “improving.” Even phony numbers can’t hide the truth, that the long-term picture is not rosy at all. Full time “spinners, ” however, have the story down pat and a lot of Americans are willing to believe it.  It’s an easier story to buy into if you’re in financial trouble.   HOPE, you know…

Locally, I’ve discovered an economic indicator that might apply to your neighborhood, too.

I’ve noticed a SEVERE drop-off in pizza deliveries! No kidding, before the economic mess hit, the Papa John’s, Dominos, and Pizza Hut drivers were in and out of here constantly, not only for dinner, but for lunch, too.  These day…nada.  Oh, last week there was one delivery I saw, to a house were new people were moving in. But, as for the regular trade?  It’s gone. Kaput. Zip.

If you want to get a view of how officialdom views the economic landscape these days, then take a gander at this stuff from the Council of Foreign Relations’ Center for Geoeconomic Studies.  They’ve issued  a nifty-keen treatise entitled…(drumroll)

Quarterly Update: The Recession in Historical Context (pdf file)

How does the current economic and financial downturn match up to past contractions? As before, this chart book provides a series of answers, plotting current indicators (in red) against the average of all post–World War II recessions (blue). To facilitate comparison, the data are centered on the beginning of the recession (marked by “0”). The dotted lines represent the most severe and the mildest experiences in past cycles. Because the current downturn is frequently compared to the Great Depression, the appendix plots the current recession against the 1930s.
Three things to look for in this update:
• Some economic indicators suggest a rapid return to economic growth. Manufacturing sentiment has breached 50, indicating an expansion, and is now nearly at its post-war recession average.
• The fiscal deterioration is unprecedented, but the stimulus that is in part driving the budget deficit has had some positive impact. The “Cash for Clunkers” program raised auto sales relative to the start of the recession to a normal level from well below its post-war minimum. This has helped clear auto inventories.
• Although financial market spreads have come down from unprecedented levels, they remain well above the average during recessions. And even though the rate of job losses has decreased, unemployment is still increasing. Even in the worst previous post-war recession, unemployment was improving by this point in the cycle. Difficult credit conditions and a challenging labor market could impede a sustainable recovery.

The charts are fascinating…here’s the first one (sorry it’s so small):

• The year-over-year fall in real gross domestic product (GDP) is the worst in the postwar period.

image

(Recessions start at “0” and baseline numbers indicate the number of months out from the start…in these charts, “12, 16, 10, 24” represents 2009.)

There are loads more fascinating charts which tell the tale and belie any talk of  “positives”…

It’s worth a visit to the CFR site, because it has lots of data floating around that’s interesting and discussion of current foreign affairs and global economics.  It’s like going into the belly of the beast, but it’s not all kissing up to our current leader, either.  So, pick your way around and you can find some interesting nuggets.

I have to wonder if, while these think-tankers are churning out their reports, they’re sending out for pizza as often as they have in the past…

***

PS: Check out the section of the blogroll titled Economic News/Analysis/Contrarian Blogs on the right which lists various economic blogs and resources if you want an ongoing dose of reality…

CNBC (Among Others) Caught in the Act “Reporting” Nouriel Roubini’s Comments on the Economy…He Responds

~~By InsightAnalytical-GRL

Yesterday morning (Thursday, July 16), I tuned into CNBC with my usual jaded eyes and ears and was amply rewarded by the total misrepresentation of Nouriel Roubini’s comments on the economy.

The talking heads were almost giddy as the “news” flashed across the bottom of the screen almost non-stop:

“Roubini says the worst is if over for the financial (sector) and the economy.”(sic)

The  talking heads opined that the gains in the market were because of this comment.

Something didn’t sound right, not right at all. I had just seen a video of a Bloomberg panel featuring Roubin and Robert Shiller (who forecasts the housing market, among other things).  The panel discussion was on July 9. Here’s the story with the video which is up at Roubini’s RGE Monitor site,under the title “Roubini Says U.S. Recession Will Last Six More Months.”  Roubini also said that whatever recovery occurs will be “shallow.”  And, he added more grim analysis of the economy and our present state of affairs as the discussion progressed.

So, now it seems that Roubini has issued a statement to counter the reporting of his views:

Roubini: Views on Economy Unchanged Despite Reports

Published: Thursday, 16 Jul 2009 | 5:51 PM ET

By: CNBC.com

Nouriel Roubini, the economist whose dire forecasts earned him the nickname “Doctor Doom,” said after markets closed Thursday that earlier reports claiming he sees an end to the recession this year were “taken out of context.”

Nouriel Roubini

cnbc.com


“It has been widely reported today that I have stated that the recession will be over ‘this year’ and that I have ‘improved’ my economic outlook,” Roubini said in a prepared statement. “Despite those reports … my views expressed today are no different than the views I have expressed previously. If anything my views were taken out of context.”

Several business news outlets, picking up on a report initially from Reuters, earlier Thursday cited Roubini as saying that the worst of the economic financial crisis may be over.

(MORE)

Yeah, “several business news outlets” means YOU, CNBC!

Roubini’s unfiltered statement is up now at his site.

Roubini Statement on the U.S. Economic Outlook

Nouriel Roubini | Jul 16, 2009

“It has been widely reported today that I have stated that the recession will be over ‘this year’ and that I have ‘improved’ my economic outlook. Despite those reports – however – my views expressed today are no different than the views I have expressed previously. If anything my views were taken out of context.

“I have said on numerous occasions that the recession would last roughly 24 months. Therefore, we are 19months into that recession. If, as I predicted, the recession is over by year end, it will have lasted 24 months with a recovery only beginning in 2010.  Simply put I am not forecasting economic growth before year’s end.

“Indeed, last year I argued that this will be a long and deep and protracted U-shaped recession that would last 24 months. Meanwhile, the consensus argued that this would be a short and shallow V-shaped 8 months long recession (like those in 1990-91 and 2001). That debate is over today as we are in the 19th month of a severe recession; so the V is out the window and we are in a deep U-shaped recession. If that recession were to be over by year end – as I have consistently predicted – it would have lasted 24 months and thus been three times longer than the previous two and five times deeper – in terms of cumulative GDP contraction – than the previous two. So, there is nothing new in my remarks today about the recession being over at the end of this year.

And then he gets to the real core issue:

“Also, as I fleshed out in detail in recent remarks the labor market is still very weak. I predict a peak unemployment rate of close to 11% in 2010. Such a large unemployment rate will have negative effects on labor income and consumption growth; will postpone the bottoming out of the housing sector; will lead to larger defaults and losses on bank loans (residential and commercial mortgages, credit cards, auto loans, leveraged loans); will increase the size of the budget deficit (even before any additional stimulus is implemented); and will increase protectionist pressures.

“So, yes there is light at the end of the tunnel for the US and the global economy. But as I have consistently argued, the recession will continue through the end of the year, and the recovery will be weak and at risk of a double-dip, as the challenge of getting right the timing and size of the exit strategy for monetary and fiscal policy easing will be daunting.

That sounds a whole lot less open and shut than the message being broadcast by CNBC, doesn’t it?