Monday, September 21, 2009

Another Reader Revealed ...

Perusing the Wall Street Journal weekend paper edition on Sunday morning, I was shocked to see that multi-decadal bear as author of a bullish article. James Grant, editor of Grant's Interest Rate Observer and noted bear since the 1980s, is looking for a surprisingly vigorous economic recovery.

***Selected Quotes Begin***
"As if they really knew, leading economists predict that recovery from our Great Recession will be plodding, gray and jobless. But they don't know, and can't. The future is unfathomable.

"Not famously a glass half-full kind of fellow, I am about to propose that the recovery will be a bit of a barn burner. Not that I can really know, either, the future being what it is. However, though I can't predict, I can guess. No, not "guess." Let us say infer.

"The very best investors don't even try to forecast the future. Rather, they seize such opportunities as the present affords them. ...

"Americans are blessedly out of practice at bearing up under economic adversity. Individuals take their knocks, always, as do companies and communities. But it has been a generation since a business cycle downturn exacted the collective pain that this one has done. Knocked for a loop, we forget a truism. With regard to the recession that precedes the recovery, worse is subsequently better. The deeper the slump, the zippier the recovery. To quote a dissenter from the forecasting consensus, Michael T. Darda, chief economist of MKM Partners, Greenwich, Conn.: "[T]he most important determinant of the strength of an economy recovery is the depth of the downturn that preceded it. There are no exceptions to this rule, including the 1929-1939 period. ...

"To the English economist Arthur C. Pigou is credited a bon mot that exactly frames the issue. "The error of optimism dies in the crisis, but in dying it gives birth to an error of pessimism. This new error is born not an infant, but a giant." ...

"I promised to be bullish , and I am (for once)—bullish on the prospects for unscripted strength in business activity. So, too, is the Economic Cycle Research Institute, New York, which was founded by the late Geoffrey Moore and can trace its intellectual heritage back to the great business-cycle theorist Wesley C. Mitchell. The institute's long leading index of the U.S. economy, along with supporting sub-indices, are making 26-year highs and point to the strongest bounce-back since 1983. A second nonconformist, the previously cited Mr. Darda, notes that the last time a recession ravaged the labor market as badly as this one has, the years were 1957-58 —after which, payrolls climbed by a hefty 4.5% in the first year of an ensuing 24-month expansion. Which is not to say, he cautions, that growth this time will match that pace, only that growth is likely to surprise by its strength, not weakness.

"And that is my case, too. The world is positioned for disappointment. But, in economic and financial matters, the world rarely gets what it expects. Pigou had humanity's number. The "error of pessimism" is born the size of a full-grown man—the size of the average adult economist, for example. "
***End of Selective Quotes***

It's nice to have a silent reader pick up my thinking and add to it with his own research.


The environmental crypto-fascists have discovered the secret to meeting carbon limits: poverty. Watch out, common man, you and your relative prosperity are the target.

From the FT: "The recession has resulted in an unparalleled fall in greenhouse gas emissions, providing a “unique opportunity” to move the world away from high-carbon growth, an International Energy Agency study has found. "

By increasing poverty and lowering GDP, carbon limits can be reached. What a wonderful admission ! The battle of Man vs. The New Pagan Religion is on.

Word of the Day

"Proselytize" - verb [$10]; an oldie from the card file
Proselytize means to convert to a belief, life style, religion, etc.; to recruit
Sentence: As I daily proselytize my populist libertarianism and economic thinking in this blog, one of the joys is to see prominent writers accept and go on to propagate my ideas. Welcome, James Grant to the bunker !

La Parola della Settimana

"Benvenuto" - interjection (singular); "Benvenuti" - plural
Benvenuto! means welcome! Addressing more than one person, use Benvenuti!
La Frase: Benvenuto, James Grant, al Fortino.
Sentence: Welcome, James Grant, to the Bunker.


Bud said...

good morning Bman !!

jim grant ?? are you f'ng serious ??? if he reads this shud change the blog address...........he an academic / journalist / writer aka pompous opiner

Verstehen Sie mich, Punker ?

Bud said...

meredith whitney says Bman's optimism on the economy is 'falsely held'

'core funfys ahave not improved and are not improving'

yeah yeah yeah......i know Bman.......she just serving her beefer masters...........the question is........are all her masters short ?? her beefer masters never go long ??? are these 1-way beefers ??? huh ????

what a bunch of thumping tosh

mfl59 said...

The common man is hurting Bunkerman....he is hurting badly...while men in ivory towers declare the recession over becuase of a few spurious ($10) indicators and nonsensical calculations....go tell the common man the recession is over....but be prepared to get smacked...

Bunkerman said...

oh, people used to send me Grant's columns and thinking all the time ... when he disagreed.

Now he agrees with me.

I'm declaring victory.

Bunkerman said...

Molotova ... sheesh.

"Sell JPM at $20"

Has she admitted error yet ?

The rest of teh world seems to be doing OK ... US will be dragged along.

Core fundies ... sheesh, what a fool.

Costs have been cut, so "when" revs return, profits will blow up estimates.

core fundies are much better ... exec pay being cut helps, too.

Bunkerman said...

Saying the recession is over is not saying happy days are here again.

when dropping, maximal pain is at the bottom.

mfl59 said...

Lets not confuse the real economy with a dead cat bounce in the stock market....

Bunkerman said...

Garnt, and last week Ken Fisher, were making their arguments about the real economy.

Why should it not rebound ?

Nothing new needs to be learned ... nothing built ... except housing, little was wasted.

Bud said...


nailed it !!!! looks like 90 that also a blip hit Bman...........on a 2 dollar stock ????

danke vielmals jim !!!!!!!!!!!!!!

Spin-em said...


nailed it !!!! looks like 90 cents..........

DPTR -1.50 shut up with your BS already

nooooo..I sold Friday


Bunkerman said...

going to MR range this PM ... more M1 Thompson + Uzi fun.

Gotta be prepared, strong ...

Bunkerman said...

oops MG range

Spin-em said...

2020..highest 5 of grads.......good luck with that...

put an education tax on video games

Spin-em said...


Bud said...

gotta be prepared for what Bman ??

we avoided armageddon.....happy days are here again (or coming shortly......S and p 1200 sounds like a good time to me)

....or is the guy from friday gonna launch a preemptive strike ???

Bunkerman said...

civil strife, etc.

uh oh ... Bud making a 1200 call ?

that's not a good omen.

Spin-em said...

who the hell cares what rush limbaugh thinks?

Obama boys sure obsessed with what he thinks....bring him up all the time....code..a rally cry for dem troops..pffttt

their obsessed......obsessed with breasts

mfl59 said...

ummm...i thought rush's analysis of donovan mcnabb was spot on....lmaoooooooooooooooooo

die eagles die!!!

Spin-em said...

looool....JETS look good..too bad Sal Bass cant claim em as his team as he dropped em in tough times WAAA...WAAAA....WAAAA(price is right sound effect)

PATS look like shit...SUCK IT CHIEFY

Spin-em said...

that timeout rule is total BS...right before the snap...lmaooooooo

Bunkerman said...

superb, as usual. Tight patterns. Firm control.