Jim Grant: “From Bear to Bull” – WSJ 9/19/09

[Arraya]

This is what so many of us have been complaining about. They are going to destroy the currency in order to “save” the housing/mortgage market. I’m not convinced this is a good thing.

That about sums it up. Keeping home prices high is becoming incredibly expensive and a fools errand.

It’s pretty obvious at this point the reason to keep home prices high is to maintain the solvency of the whole western banking system. Which they appear to be failing monumentally as the real economy continues to deflate via employment and wages, which make the whole experiment even more unlikely to work.

Time is almost up on this game.

[davelj]

[quote=temeculaguy]I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj[/quote]

I believe I’ve said this before here at the Pigg, but in my view Grant’s Interest Rate Observer is one of a very small handful of must-read financial publications on the planet. Jim Grant may well be the most knowledgeable financial historian in the world. He’s a rock of sanity in a sea of shit. And his writing style is fantastic. Here’s the link to GIRO (a bargain at $800/year):

http://grantspub.com/about/

P.S. I know Rich is a subscriber.

[davelj]

[quote=temeculaguy]I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj[/quote]

I believe I’ve said this before here at the Pigg, but in my view Grant’s Interest Rate Observer is one of a very small handful of must-read financial publications on the planet. Jim Grant may well be the most knowledgeable financial historian in the world. He’s a rock of sanity in a sea of shit. And his writing style is fantastic. Here’s the link to GIRO (a bargain at $800/year):

http://grantspub.com/about/

P.S. I know Rich is a subscriber.

[davelj]

[quote=temeculaguy]I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj[/quote]

I believe I’ve said this before here at the Pigg, but in my view Grant’s Interest Rate Observer is one of a very small handful of must-read financial publications on the planet. Jim Grant may well be the most knowledgeable financial historian in the world. He’s a rock of sanity in a sea of shit. And his writing style is fantastic. Here’s the link to GIRO (a bargain at $800/year):

http://grantspub.com/about/

P.S. I know Rich is a subscriber.

[davelj]

[quote=temeculaguy]I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj[/quote]

I believe I’ve said this before here at the Pigg, but in my view Grant’s Interest Rate Observer is one of a very small handful of must-read financial publications on the planet. Jim Grant may well be the most knowledgeable financial historian in the world. He’s a rock of sanity in a sea of shit. And his writing style is fantastic. Here’s the link to GIRO (a bargain at $800/year):

http://grantspub.com/about/

P.S. I know Rich is a subscriber.

[davelj]

[quote=temeculaguy]I have to admit, I had never read Jim Grant or made a mental note of him if I had. Thanks for posting it, right or wrong, I really like his writing style. Authors of that quality are rare in such dry subjects, the blend of history, historical references, philosiphy of balance, the guy writes like a Taoist, I loved it. Thanks davelj[/quote]

I believe I’ve said this before here at the Pigg, but in my view Grant’s Interest Rate Observer is one of a very small handful of must-read financial publications on the planet. Jim Grant may well be the most knowledgeable financial historian in the world. He’s a rock of sanity in a sea of shit. And his writing style is fantastic. Here’s the link to GIRO (a bargain at $800/year):

http://grantspub.com/about/

P.S. I know Rich is a subscriber.

[davelj]

[quote=EconProf]Jim Grant has a long and envied reputation of being right.[/quote]

Actually, I’d argue that Jim Grant has “a long and envied reputation of being a great writer and a great thinker.” I don’t think many folks would argue he’s been “right” from a timing perspective very often – that includes himself, by the way, as he’s a very self-deprecating guy. For example, he wrote a bullish article on AIG about two years back as its stock was coming down that’s obviously turned out to be a black eye. Having said that… he has a great sense of history and of monetary policy and I think he’s generally right… eventually. So, I kind of ignore his short-term prognostications and focus on his long-term forecasts which tend to have some value. He’s been generically bearish on credit for about 20 years now. So, he was only about 18 years early. But I still love his insights and writing.

[quote=EconProf]His lengthy article is detailed and persuasive. [/quote]

I actually found the article to be somewhat persuasive, but short on detail. It would not surprise me to see a short period – maybe a couple of quarters or a year – where we see a sharp rebound in real GDP. But, the long-term problem – too much debt – is going to take a LONG time repair.

As you know, EconProf, GDP=C+I+G+netX. As we’re paying down the mountain of debt we’ve got, C & I must, by mathematical definition, suffer. And eventually G will suffer too. And given the state of the rest of the world, it’s hard to see net exports helping out a lot. So, yeah, while we could conceivably see a few quarters or a year of 3%-5% real GDP growth as part of a reflexive economic rebound, the next decade doesn’t look very good. I’ll be very surprised if we see greater than about 1% real GDP growth over the period. The math behind resolving our debt issues is just too daunting.

[davelj]

[quote=EconProf]Jim Grant has a long and envied reputation of being right.[/quote]

Actually, I’d argue that Jim Grant has “a long and envied reputation of being a great writer and a great thinker.” I don’t think many folks would argue he’s been “right” from a timing perspective very often – that includes himself, by the way, as he’s a very self-deprecating guy. For example, he wrote a bullish article on AIG about two years back as its stock was coming down that’s obviously turned out to be a black eye. Having said that… he has a great sense of history and of monetary policy and I think he’s generally right… eventually. So, I kind of ignore his short-term prognostications and focus on his long-term forecasts which tend to have some value. He’s been generically bearish on credit for about 20 years now. So, he was only about 18 years early. But I still love his insights and writing.

[quote=EconProf]His lengthy article is detailed and persuasive. [/quote]

I actually found the article to be somewhat persuasive, but short on detail. It would not surprise me to see a short period – maybe a couple of quarters or a year – where we see a sharp rebound in real GDP. But, the long-term problem – too much debt – is going to take a LONG time repair.

As you know, EconProf, GDP=C+I+G+netX. As we’re paying down the mountain of debt we’ve got, C & I must, by mathematical definition, suffer. And eventually G will suffer too. And given the state of the rest of the world, it’s hard to see net exports helping out a lot. So, yeah, while we could conceivably see a few quarters or a year of 3%-5% real GDP growth as part of a reflexive economic rebound, the next decade doesn’t look very good. I’ll be very surprised if we see greater than about 1% real GDP growth over the period. The math behind resolving our debt issues is just too daunting.

[davelj]

[quote=EconProf]Jim Grant has a long and envied reputation of being right.[/quote]

Actually, I’d argue that Jim Grant has “a long and envied reputation of being a great writer and a great thinker.” I don’t think many folks would argue he’s been “right” from a timing perspective very often – that includes himself, by the way, as he’s a very self-deprecating guy. For example, he wrote a bullish article on AIG about two years back as its stock was coming down that’s obviously turned out to be a black eye. Having said that… he has a great sense of history and of monetary policy and I think he’s generally right… eventually. So, I kind of ignore his short-term prognostications and focus on his long-term forecasts which tend to have some value. He’s been generically bearish on credit for about 20 years now. So, he was only about 18 years early. But I still love his insights and writing.

[quote=EconProf]His lengthy article is detailed and persuasive. [/quote]

I actually found the article to be somewhat persuasive, but short on detail. It would not surprise me to see a short period – maybe a couple of quarters or a year – where we see a sharp rebound in real GDP. But, the long-term problem – too much debt – is going to take a LONG time repair.

As you know, EconProf, GDP=C+I+G+netX. As we’re paying down the mountain of debt we’ve got, C & I must, by mathematical definition, suffer. And eventually G will suffer too. And given the state of the rest of the world, it’s hard to see net exports helping out a lot. So, yeah, while we could conceivably see a few quarters or a year of 3%-5% real GDP growth as part of a reflexive economic rebound, the next decade doesn’t look very good. I’ll be very surprised if we see greater than about 1% real GDP growth over the period. The math behind resolving our debt issues is just too daunting.

[davelj]

[quote=EconProf]Jim Grant has a long and envied reputation of being right.[/quote]

Actually, I’d argue that Jim Grant has “a long and envied reputation of being a great writer and a great thinker.” I don’t think many folks would argue he’s been “right” from a timing perspective very often – that includes himself, by the way, as he’s a very self-deprecating guy. For example, he wrote a bullish article on AIG about two years back as its stock was coming down that’s obviously turned out to be a black eye. Having said that… he has a great sense of history and of monetary policy and I think he’s generally right… eventually. So, I kind of ignore his short-term prognostications and focus on his long-term forecasts which tend to have some value. He’s been generically bearish on credit for about 20 years now. So, he was only about 18 years early. But I still love his insights and writing.

[quote=EconProf]His lengthy article is detailed and persuasive. [/quote]

I actually found the article to be somewhat persuasive, but short on detail. It would not surprise me to see a short period – maybe a couple of quarters or a year – where we see a sharp rebound in real GDP. But, the long-term problem – too much debt – is going to take a LONG time repair.

As you know, EconProf, GDP=C+I+G+netX. As we’re paying down the mountain of debt we’ve got, C & I must, by mathematical definition, suffer. And eventually G will suffer too. And given the state of the rest of the world, it’s hard to see net exports helping out a lot. So, yeah, while we could conceivably see a few quarters or a year of 3%-5% real GDP growth as part of a reflexive economic rebound, the next decade doesn’t look very good. I’ll be very surprised if we see greater than about 1% real GDP growth over the period. The math behind resolving our debt issues is just too daunting.

[davelj]

[quote=EconProf]Jim Grant has a long and envied reputation of being right.[/quote]

Actually, I’d argue that Jim Grant has “a long and envied reputation of being a great writer and a great thinker.” I don’t think many folks would argue he’s been “right” from a timing perspective very often – that includes himself, by the way, as he’s a very self-deprecating guy. For example, he wrote a bullish article on AIG about two years back as its stock was coming down that’s obviously turned out to be a black eye. Having said that… he has a great sense of history and of monetary policy and I think he’s generally right… eventually. So, I kind of ignore his short-term prognostications and focus on his long-term forecasts which tend to have some value. He’s been generically bearish on credit for about 20 years now. So, he was only about 18 years early. But I still love his insights and writing.

[quote=EconProf]His lengthy article is detailed and persuasive. [/quote]

I actually found the article to be somewhat persuasive, but short on detail. It would not surprise me to see a short period – maybe a couple of quarters or a year – where we see a sharp rebound in real GDP. But, the long-term problem – too much debt – is going to take a LONG time repair.

As you know, EconProf, GDP=C+I+G+netX. As we’re paying down the mountain of debt we’ve got, C & I must, by mathematical definition, suffer. And eventually G will suffer too. And given the state of the rest of the world, it’s hard to see net exports helping out a lot. So, yeah, while we could conceivably see a few quarters or a year of 3%-5% real GDP growth as part of a reflexive economic rebound, the next decade doesn’t look very good. I’ll be very surprised if we see greater than about 1% real GDP growth over the period. The math behind resolving our debt issues is just too daunting.

[4plexowner]

Jim Grant: Ringing the Bell at the Top?
http://www.ritholtz.com/blog/2009/09/jim-grant-ringing-the-bell-at-the-top/

Barry Ritholtz’s commentary on Jim Grant’s missive:

“Unfortunately, his rationale is weak, if not totally wrong. For the most part, his argument rests on the premise that, historically at least, strong recoveries have followed severe contractions.

Aside from discounting the fact that there are aspects to the current unraveling that are historically unique and extraordinarily unsettling (e.g., total credit market debt relative to gross domestic product is well beyond anything this country has ever witnessed), Mr. Grant makes a number of curious assertions.

For one thing, he assumes that the current downturn is near its nadir, instead of a temporary floor built on a massive stimulus injection and a knee-jerk bout of inventory restocking. ”

…

“As I’m sure Mr. Grant is aware, Professors Carmen M. Reinhart and Kenneth S. Rogoff have published a research paper, “The Aftermath of Financial Crises,” based on data going back more than a century, which concluded that post-crisis downturns tend to be “protracted affairs.””

[4plexowner]

Jim Grant: Ringing the Bell at the Top?
http://www.ritholtz.com/blog/2009/09/jim-grant-ringing-the-bell-at-the-top/

Barry Ritholtz’s commentary on Jim Grant’s missive:

“Unfortunately, his rationale is weak, if not totally wrong. For the most part, his argument rests on the premise that, historically at least, strong recoveries have followed severe contractions.

Aside from discounting the fact that there are aspects to the current unraveling that are historically unique and extraordinarily unsettling (e.g., total credit market debt relative to gross domestic product is well beyond anything this country has ever witnessed), Mr. Grant makes a number of curious assertions.

For one thing, he assumes that the current downturn is near its nadir, instead of a temporary floor built on a massive stimulus injection and a knee-jerk bout of inventory restocking. ”

…

“As I’m sure Mr. Grant is aware, Professors Carmen M. Reinhart and Kenneth S. Rogoff have published a research paper, “The Aftermath of Financial Crises,” based on data going back more than a century, which concluded that post-crisis downturns tend to be “protracted affairs.””

[4plexowner]

Jim Grant: Ringing the Bell at the Top?
http://www.ritholtz.com/blog/2009/09/jim-grant-ringing-the-bell-at-the-top/

Barry Ritholtz’s commentary on Jim Grant’s missive:

“Unfortunately, his rationale is weak, if not totally wrong. For the most part, his argument rests on the premise that, historically at least, strong recoveries have followed severe contractions.

Aside from discounting the fact that there are aspects to the current unraveling that are historically unique and extraordinarily unsettling (e.g., total credit market debt relative to gross domestic product is well beyond anything this country has ever witnessed), Mr. Grant makes a number of curious assertions.

For one thing, he assumes that the current downturn is near its nadir, instead of a temporary floor built on a massive stimulus injection and a knee-jerk bout of inventory restocking. ”

…

“As I’m sure Mr. Grant is aware, Professors Carmen M. Reinhart and Kenneth S. Rogoff have published a research paper, “The Aftermath of Financial Crises,” based on data going back more than a century, which concluded that post-crisis downturns tend to be “protracted affairs.””

[4plexowner]

Jim Grant: Ringing the Bell at the Top?
http://www.ritholtz.com/blog/2009/09/jim-grant-ringing-the-bell-at-the-top/

Barry Ritholtz’s commentary on Jim Grant’s missive:

“Unfortunately, his rationale is weak, if not totally wrong. For the most part, his argument rests on the premise that, historically at least, strong recoveries have followed severe contractions.

Aside from discounting the fact that there are aspects to the current unraveling that are historically unique and extraordinarily unsettling (e.g., total credit market debt relative to gross domestic product is well beyond anything this country has ever witnessed), Mr. Grant makes a number of curious assertions.

For one thing, he assumes that the current downturn is near its nadir, instead of a temporary floor built on a massive stimulus injection and a knee-jerk bout of inventory restocking. ”

…

“As I’m sure Mr. Grant is aware, Professors Carmen M. Reinhart and Kenneth S. Rogoff have published a research paper, “The Aftermath of Financial Crises,” based on data going back more than a century, which concluded that post-crisis downturns tend to be “protracted affairs.””

[Author]

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