Fashion Valley packed last night

[powayseller]

I didn’t say I believe S&P will drop to 600. I think a 30% drop from the peak is realistic.

[nla]

PS: Yes you did, here’s what you wrote when AN asked you if you truly believe that S&P will drop to 600:

“… I truly believe this, so I put my money where my mouth is…”

Unless I’m reading it wrong.

[powayseller]

I believe the S&P500 will drop heading into the recession. I think based on past drops, I’ll go with Roubini’s call on the 28.5% drop. I’m not sure if it can go as low as 600 by next summer. But since I believe it will drop, I bought an inverse fund, but too soon. Market timing is notoriously problematic for me.

[qcomer]

Poway,
If market timing has been difficut for you (and trust me it is difficult for everyone), why don’t you keep your big picture cautious look intact but let the market deide when it turns for itself. Do so by putting automatic stops in your investments. BTW, I believe a market decline of close to 20% atmost. That should be able to remove the speculation out of markets.

[powayseller]

Check out this link from the bubble bloggers on the right. A great interview about a fund manager’s outlook for recession, and how he is positioning himself. He also says oil and commodity prices drop in every recession. So I was wrong about oil going to $100 in the near term. He cites lower demand in this economic slowdown is causing the oil price to drop, just as it dropped in 2000 recession.

[an]

Q3 06 revised GDP shows auto sales went up 9+%. So I guess we’re not heading for a recession anymore.

[nla]

“To me, the recession for next quarter is a sure thing.”
– powayseller 11/22/2006

[powayseller]

If Q4 GDP is close to 0% as Roubini now predicts, then I will be close in my recession call. Actually, at the beginning of the year, I thought we would be in a recession by fall. Now it looks like it will be late 06 or early 07. Barry Ritholtz just blogged about ATA (trucking indicator)…

[an]

If recession occur in Q1 07, then the correlation between auto industry and recession you were pointing out earlier is wrong since Q3 06, auto industry increased over 9%.

[powayseller]

asianautica, the auto sales doesn’t come from GDP data, but from the Commerce Department. The signs for a recession are all here: declining auto sales, declining new home starts, inverted yield curve. GDP growth is slowing, whether 1.6% or 2.2%, it is definitely getting less every quarter.

“The indicators suggests a recession is either ‘under way or set to begin within a few months.’ ”

It never warned of a recession that did not occur, since it started in 1968.

So yo think that this is the first time in 6 decades that the 3 recession indicators are wrong?

Barry Ritholtz, quoting Floyd Norris of NYT:

“The rule — unveiled here for the first time — is that if the figure is down 2 percent or more, a recession is either under way or set to begin within a few months. The figure fell to a negative 2.4 percent when June sales figures were released last week by the Census Bureau.

If things are miserable for America’s new-car dealers, can a recession be averted? History says it cannot and suggests a downturn may have already begun.

The available data go back to 1968, a period in which the American economy has recorded six recessions. The “dealer doldrums indicator,” as we will call it, called five of them, missing the 1981-82 recession only because it was not persuaded that the 1980 downturn had ever ended. It has never warned of a recession that did not occur.”

[powayseller]

AN, Dean Baker just published Recession Looms for the U.S. Economy in 2007.

I’d be interested in your thoughts on this – what do you disagree with?

[Author]

Posts