T Nation

Recession to Bottom in 2014

“The ratio, developed in 1969 by Nobel Prize-winning economist James Tobin, shows the Standard & Poor?s 500 Index is still too expensive relative to the cost of replacing assets, said Napier. While the 39 percent drop in the index this year pushed equity prices below replacement cost, history suggests the ratio must sink further as deflation sets in, he said. The S&P may plunge another 55 percent to 400 by 2014, Napier said.”

"The Q ratio on U.S. equities has dropped to 0.7 from a peak of 2.9 in 1999, and reaching 0.3 has always signaled the end of a bear market, said Napier, 44, the author of ?Anatomy of the Bear,? a study of how business cycles change course. The Q ratio for U.S. equities has fluctuated between 0.3 and 3 in the past 130 years.

When the gauge is more than one, it indicates the market is overvaluing company assets, while a Q ratio of less than one signifies shares are undervalued because it is cheaper to buy companies than to build them from the ground up.

Previous Bottoms

At the end of the four largest U.S. bear markets in 1921, 1932, 1949 and 1982, the Q ratio fell to 0.3 or lower, and history is likely to repeat, said Napier. From the 1982 trough, the S&P 500 grew more than 14-fold to the middle of 2000, when Napier says the last bull market ended."

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKlTQb6af0jc

Oh Jesus. More headhunter economics.

Your shit is hilarious.

[quote]FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

[/quote]

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

The world comes to an end in 2012 according to the Mayan calendar, so what does this matter?

[quote]Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

[/quote]
ya…turd boy.

[quote] yorik wrote:
The world comes to an end in 2012 according to the Mayan calendar, so what does this matter?
[/quote]

holy shit. I was thinking that while reading this also. However, my source is Nostradamus.

[quote]THE_CLAMP_DOWN wrote:
Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

ya…turd boy.

yorik wrote:
The world comes to an end in 2012 according to the Mayan calendar, so what does this matter?

holy shit. I was thinking that while reading this also. However, my source is Nostradamus.
[/quote]

I think that very few realize yet how deep this is going to be. When financials collapse, because of fractional reserve banking, the impact is 10 times of when an ordinary firm collapses. Loans come to a screeching halt and no one will borrow. Not good, when you have an economy based on ever increasing debt.

An old school IB that has an office on the same floor as me has a very funny saying,

“If you try to pick a bottom, all you’ll get is a smelly finger”

I’ll look for the signs in the market myself, as I’m more then capable of doing.

LR

[quote]London Runner wrote:
An old school IB that has an office on the same floor as me has a very funny saying,

“If you try to pick a bottom, all you’ll get is a smelly finger”

I’ll look for the signs in the market myself, as I’m more then capable of doing.

LR[/quote]

If you can beat the model created by a Nobel prize-winning economist, my hat is off to you, sir.

[quote]Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

[/quote]

We’ve found on numerous occasions that you are the idiot, dick breath.

Your understanding of both economic theory and policy is abysmal and I highly doubt you even understand the links you post beyond knee-jerk reactionism to key words that don’t really make sense to you when discussed in context.

Please, delve in to this article and give solid opinions based on economic fact. Start a discussion. Show, for once, you understand what you are playing chicken little with.

[quote]Headhunter wrote:
THE_CLAMP_DOWN wrote:
Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

ya…turd boy.

yorik wrote:
The world comes to an end in 2012 according to the Mayan calendar, so what does this matter?

holy shit. I was thinking that while reading this also. However, my source is Nostradamus.

I think that very few realize yet how deep this is going to be. When financials collapse, because of fractional reserve banking, the impact is 10 times of when an ordinary firm collapses. Loans come to a screeching halt and no one will borrow. Not good, when you have an economy based on ever increasing debt.

[/quote]

honestly. It sounds awesome. I get a war and a great depression. Lucky times we live in. Time to grow~

[quote]Headhunter wrote:
THE_CLAMP_DOWN wrote:
Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

ya…turd boy.

yorik wrote:
The world comes to an end in 2012 according to the Mayan calendar, so what does this matter?

holy shit. I was thinking that while reading this also. However, my source is Nostradamus.

I think that very few realize yet how deep this is going to be. When financials collapse, because of fractional reserve banking, the impact is 10 times of when an ordinary firm collapses. Loans come to a screeching halt and no one will borrow. Not good, when you have an economy based on ever increasing debt.

[/quote]

Fractional reserve banking is not as much a cause of this collapse as is mark-to-market accounting.

And the SEC is opposed to even so much as a suspension of that bullshit.

If it weren’t for mark-to-market, we would not have had the meltdown.

[quote]Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

[/quote]

You’re both idiots.

SERIOUSLY doubt this.

[quote]rainjack wrote:
Headhunter wrote:
THE_CLAMP_DOWN wrote:
Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

ya…turd boy.

yorik wrote:
The world comes to an end in 2012 according to the Mayan calendar, so what does this matter?

holy shit. I was thinking that while reading this also. However, my source is Nostradamus.

I think that very few realize yet how deep this is going to be. When financials collapse, because of fractional reserve banking, the impact is 10 times of when an ordinary firm collapses. Loans come to a screeching halt and no one will borrow. Not good, when you have an economy based on ever increasing debt.

Fractional reserve banking is not as much a cause of this collapse as is mark-to-market accounting.

And the SEC is opposed to even so much as a suspension of that bullshit.

If it weren’t for mark-to-market, we would not have had the meltdown.
[/quote]

Yes. It’s like we never learn. Mark-to-market accounting contributes heavily both to credit bubbles, which no one on Wall Street ever complains about because they are too busy raking in the cash, and credit busts, at which point, Something Must Be Done.

I think entirely suspending mark-to-market accounting would be pretty insane, but there are real problems with it that no one wants to address.

There is not a single situation I can think of in which mark-to-market should not be suspended, or even abolished.

[quote]beebuddy wrote:
Headhunter wrote:
FormerlyTexasGuy wrote:
Oh Jesus. More headhunter economics.

Your shit is hilarious.

You’re a fucking idiot. Go shit in someone else’s thread, turd boy.

You’re both idiots.[/quote]

Good debate skills, guys! Really!!

http://www.dinocrat.com/archives/2008/12/05/can-we-awaken-from-the-dreams-of-recent-years/

My own two cents is that this market has bottomed and we will see an uptick in mid to late 2009.

[quote]hedo wrote:
My own two cents is that this market has bottomed and we will see an uptick in mid to late 2009.[/quote]

Huh? Are you joking? People are just are just now starting to lose their jobs at a decent rate and you think we’re at the bottom and we’ll recover in late 2009? I’m not trying to be mean or argumentative but my reaction on the fly was “WTF is this guy retarded?”.

Winter is approaching or here for the US and with high prices for food and utilities coupled with decrease in wages and jobs you think we’ve bottomed? A lot of people will be struggling to just put food on the table let alone pay their gas bill and rent/mortgage. Since so many people have lost their homes the demand for rentals has increased meaning the price has gone up or at the very least stayed the same.

Several states (Great Lakes area) have already made it illegal for your gas to be turned off during the winter due to non-payment. Some states (Ohio for sure) are discussing a postponement of evictions during the winter months unless the evictee can prove they have a shelter or other place to live. So we have people trying to make a living (landlords, utility employees) that aren’t receiving the income they’re supposed to. So those of us that have jobs or aren’t deadbeats get to look forward to even higher gas prices and landlords being foreclosed on. Oh and we get more of those lovable, huggable welfare babies mmmmmmm mmmmmm tasty.

I’m not really even going to touch on the Fed Gov and Obama. My main belief is they’ll follow the track record which has been very unsatisfactory at best. On top of that even if their plans work, the first 2 years of a presidency are spent dealing with previous admin bullshit and the current admins influence isn’t usually felt until about the 1/2 way mark. This could be shorter since it’ll be a one party majority but I won’t hold my breath.

I’m not a super doom and gloom we are going back to the stone ages type of guy. I’m fairly middle of the road and don’t think it’ll be worse than the Great Depression. However, I do recognize that it could potentially be much worse and that people are just now starting to feel the pinch. Prediction: at the tip of the spear and I’m guessing it’s a Boar Spear at best and a Ballista at worst.

Note: Didn’t even read your link because if it supports your viewpoints I know it has to be a waste of time. If in late 2009 it has truly improved I’ll buy you a tub of Grow! or video tape myself eating this post after I print it off…your choice.

[quote]GhorigTheBeefy wrote:
hedo wrote:

My own two cents is that this market has bottomed and we will see an uptick in mid to late 2009.

Huh? Are you joking? People are just are just now starting to lose their jobs at a decent rate and you think we’re at the bottom and we’ll recover in late 2009? I’m not trying to be mean or argumentative but my reaction on the fly was “WTF is this guy retarded?”.

Winter is approaching or here for the US and with high prices for food and utilities coupled with decrease in wages and jobs you think we’ve bottomed? A lot of people will be struggling to just put food on the table let alone pay their gas bill and rent/mortgage. Since so many people have lost their homes the demand for rentals has increased meaning the price has gone up or at the very least stayed the same.

Several states (Great Lakes area) have already made it illegal for your gas to be turned off during the winter due to non-payment. Some states (Ohio for sure) are discussing a postponement of evictions during the winter months unless the evictee can prove they have a shelter or other place to live. So we have people trying to make a living (landlords, utility employees) that aren’t receiving the income they’re supposed to. So those of us that have jobs or aren’t deadbeats get to look forward to even higher gas prices and landlords being foreclosed on. Oh and we get more of those lovable, huggable welfare babies mmmmmmm mmmmmm tasty.

I’m not really even going to touch on the Fed Gov and Obama. My main belief is they’ll follow the track record which has been very unsatisfactory at best. On top of that even if their plans work, the first 2 years of a presidency are spent dealing with previous admin bullshit and the current admins influence isn’t usually felt until about the 1/2 way mark. This could be shorter since it’ll be a one party majority but I won’t hold my breath.

I’m not a super doom and gloom we are going back to the stone ages type of guy. I’m fairly middle of the road and don’t think it’ll be worse than the Great Depression. However, I do recognize that it could potentially be much worse and that people are just now starting to feel the pinch. Prediction: at the tip of the spear and I’m guessing it’s a Boar Spear at best and a Ballista at worst.

Note: Didn’t even read your link because if it supports your viewpoints I know it has to be a waste of time. If in late 2009 it has truly improved I’ll buy you a tub of Grow or video tape myself eating this post after I print it off…your choice.

[/quote]

Actually the link was about how people have grown fat on how easy things are and lost perspective on how things work. Perhaps you should bother yourself…maybe it will expand your perspective. Understanding oposing viewpoints isn’t the worst thing in the world. I think the economy will pull out of the doldrums before most do.

Positive points to consider:

  1. Obama tax plans will be delayed.
  2. Increased government spending on infastructure.
  3. Capital availability and liquidity will increase. They
    upside down now. This will right itself.
  4. Capital goods manufacturers forced to become more
    competitive.
  5. Silly Global Warming policies will be delayed.
  6. Lower cost of oil will have a ripple effect.
  7. The cycle will correct itself if history is any
    guide the expansion will be enormous following a
    deep correction.

Your entitled to your opinion. Be happy to take the Grow! I use the low carb stuff by the way.

It’s a prediction. Keep in mind all predictions are usually wrong to some degree. The recession beagan in late 2007. They typically run 12-18 months. I see this one ending in 2009. If you think this is the mother of all recessions it may run a bit longer…but I doubt it. Anecdotal evidence is not the best indicator of economic health.

On these very pages it has been forecast that oil would hit $250/bbl + by year end. This recession was also forecast by the esteemed band of T-Nation economists to start every month for the past two years and that returning to the gold standard or buying silver was our only hope of economic survival.

I’ve been thru a lot of business cycles. This one is bad. Not as bad as the late Carter years but still a nasty one.
It will end. It will not last for ever and it’s never as bad as people think it is. Could I be wrong…sure. I’m not usally wrong by that much however.

Honestly, there probably needs to be a new Bretton Woods with China included. Time to reset our funny money and roll with it for another 50+ years, hopefully.