The Armageddon Gang

Armageddon
Interesting article in Time magazine, The Armageddon Gang, looking at the uber Bearish crowd.

The piece starts out pretty skeptically, but eventually, acknowledges risks and issues usually ignored in family publications. Frequent BP guest Mike Panzner gets a lot of ink:

"There are those who fret that current troubles in real estate will lead to an economic slowdown, maybe a recession. Then there’s Peter Schiff. "Our standard of living is going to decline," the Connecticut stockbroker confidently declares. "There’s no way around it, and it has just started. . . "

Schiff owns Euro Pacific Capital, a smallish firm that specializes in moving clients’ money into nondollar assets like foreign stocks and bonds. Over the past couple of years, he has become a regular, hectoring presence on cable-TV business shows–on CNBC they call him "Dr. Doom." Now he has a book out, ominously titled Crash Proof: How to Profit from the Coming Economic Collapse.

It isn’t the only such cheery tome on shelves these days. In Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, trader Michael Panzner warns of an economic meltdown that will lead to Zimbabwe-style hyperinflation and possible martial law . . .

We have heard such pronouncements of impending doom before, of course . . . When I bring this record up with Panzner, he has a ready retort. "History didn’t begin in the postwar period," he says. "History didn’t begin 20 years ago." Living memory includes the Great Depression, begun in 1929 and stopped only by global war; stocks didn’t fully recover until 1954. The scary scenarios painted by Panzner and his ilk are not outside the realm of historical experience. What’s more, they’re all grounded in the incontrovertible truth that much of our economic growth of the past 25 years–and almost all the growth of the past five–has been funded by debt."

What makes Mike’s book more interesting than the typical doom and gloom tome is his politics: The four impending catastrophes he discusses are pulled equally from the playbook of the Left (Massive debt, unregulated derivatives) as well as the Right (Unfunded Pensions, Social Security and Medicare entitlement programs).

Remind me to introduce Mike to Larry Kudlow next week — despite the less than sunny views in the book (which is the antithesis of Larry’s perspectives), the concern with government  guarantees and entitlement programs are right up Kudlow’s alley . . .

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Source:
The Armageddon Gang
JUSTIN FOX
Time, Friday, Mar. 30, 2007
http://www.time.com/time/magazine/article/0,9171,1604936,00.html

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  1. SINGER commented on Mar 31

    Two thoughts:

    1) If someone has late stage cancer, is it possible they will survive? Yes.. Would it be “uber-bearish” to say they’re not gonna make it? No… It’s just assessing “reality”

    2) The whole bull/bear dichotomy rhetoric is greatly oversimplified…For example, we could realisticly have the Dow go to 30,000 NOMINALLY but have that gain wiped out in REAL TERMS by a devalued currency …See Wiemar Germany where the market went through the roof but you needed piles of paper money to buy a loaf of bread…

    On a side note, I’ve heard it said that one of the factors which contributed to the rampant anti-semitism in post WWI Germany was that as a result of their entrenched network of relationships internationally the German Jews had significant amounts of wealth in non-German investments which meant on a relative basis their wealth was preserved to a significantly greater degree than their German brethren hence the later reality where they faced animosity and ultimately wealth confiscation and genocide…

    Thus, directing a portion of one’s wealth to non-US assets would not seem to be a bad idea…After all if the world economy and US economy move along and we never have another currency meltdown or collapse of a great superpower(historically highly improbable) then those alternative non-US assets would still provide a nice return…

  2. KirkH commented on Mar 31

    The thing that really bothers me with this gang is the assumption that the wealth divide could be simply remedied by removing greed from the equation. The problem is that productivity no longer creates jobs like it used to. Moore’s law, standards, and open source are killing jobs faster than any greedy banker.

    I’m not saying there aren’t greedy bankers but the only revolution that would solve this problem would consist of farmers attacking ATMs with pitchforks so tellers can get their jobs back.

  3. Chief Tomahawk commented on Mar 31

    BR, don’t you think Nouriel Roubini’s enough for Larry already? Panzner might have Kudlow ready to hide under his desk…

  4. Rick Hanley commented on Mar 31

    KirkH, on the outside chance that you are sane, I’d offer that you may have meant out sourcing rather than ‘open source?’

    Depending on context, of which you may not live in, productivity is not exactly something that, in and of itself, is spoken of as creating jobs.

    If what I have said drives you over the edge, then I want to say that Paris Hilton made me say it.

  5. ECONOMISTA NON GRATA commented on Mar 31

    Amusing, off Topic. However, very funny.

    Condos of the Living Dead

    “…Lifestyle is the way a person distinguishes himself or herself. It is the artistry of living. … Nationality and class have been replaced by lifestyle.” Don’t take my word for it. That’s coming from Ian Schrager, the Buddha of disco, the Confucius of the dirty weekend. Consider that statement: heritage, achievement, geography, and history are all passé. Over. What really matters is your thread count, your iPod menu, and the table they give you. Schrager sent me the glossy self-published book of his gnomic thoughts in a box of Plexiglas wonder, complete with two DVDs. He sent it to my home in Chelsea. Chelsea, London. This tome of gravid aperçus was a brochure—though “brochure” seems too mean a word—for a building at 40 Bond Street that is as yet unbuilt. Prices start at $3.35 million for a 1,269-square-foot one-bedroom.

    “This is what I did with my nightclubs and hotels and I intend to do with people’s homes.” Imagine that: coming home and finding a shrieking gay Cuban bouncer with a clipboard on the door; three peroxided trust-fund brats with added silicone bits, all talking at once, locked in the bathroom; and a family from Idaho in town to see The Producers asleep in your bedroom……”

    http://www.vanityfair.com/culture/features/2006/10/gill200610?printable=true&currentPage=all

    Best regards,

    Econolicious

  6. V L commented on Mar 31

    The fundamental principle of economics: if the US does not save, it will continue running deficits.

    America is trapped in the vicious self-destructing cycle of increasing consumption and dept (more and more borrowing with running larger and larger deficits in order to keep up with more and more increasing consumption).
    The only way to break up the cycle is through more savings => less consumption => decreased consumer spending => deep recession =>? maybe even a Japan-style depression.

    I do not know how else we can have more savings and less dept (less borrowing) and less of consumption without a recession. (Recessions force people to save more).

    It is either a recession now (recession => more savings => less of borrowing and spending => less debt => no exponentially growing deficits => strong foundation for future growth) or a complete economic collapse with hyperinflation later (borrow and spend => borrow and spend => borrow and spend => borrow and spend => borrow and spend => borrow and spend => economic collapse with hyperinflation)

  7. Winston Munn commented on Mar 31

    Yesterday’s market action shows how tenuous is the debt circumstance when the news of the slightest tightening of China trade caused a 100+ point plummet in 10 minutes or so.

  8. devilfutility commented on Mar 31

    So, does this book come recomended?

    I’d like to read a bit more about the uber bear case. I know some people who think Gold & Silver are THE assets of choice. I’m not one of them, but you can read all about this opinion here:

    http://silverstockreport.com/

    Anyhow, I myself happen to expect a recession in the next couple of years, but as far as the long term goes, I’m a hyper bull. I have quite a bit of confidence that the dreams of biotechnology and nanotechnology are going to be realized in my lifetime. I’m invested heavily in biotechnology right now. I consider myself a Kurzweilian. You can read all about this perspective here:

    http://www.kurzweilai.net

  9. Null commented on Mar 31

    Well it pays to be an uber Bear. Who would buy a book called: Financial Speedbump. Protecting your future from the coming four month correction?

  10. Barry Ritholtz commented on Mar 31

    I haven’t finished it yet, but what I saw I liked.

    Unfortunately, I am in the middle of 3 books — I need to just bang a few out in a row!

  11. John Thompson commented on Mar 31

    Maybe the world will let us just keep spending “fake” money cause we have nukes. Wait, that didn’t work with the Russians.

    Anyway, here’s an interesting “capitalist” thought by HOWSTUFFWORKS.com’s Marshall Brain.

    Guaranteed income for robots to spur new business to pay off debt with. It could really work, (but the 1% collecting interest don’t likee when we use greenbacks or Yankee scrip. I’m gonna gets in trouble like them shot presidents.)

    http://ieet.org/index.php/IEET/IEETblog/brain20070307/

  12. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  13. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  14. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  15. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  16. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  17. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  18. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  19. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  20. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  21. tj & the bear commented on Mar 31

    I’d like to read a bit more about the uber bear case.

    There’s a lot out there, and (unfortunately) they know their stuff. Between the better books and blogs, I’m convinced we’re headed for a depression. That said, I also believe America will come out of it better and stronger. It may just take a decade or so to come out…

  22. Samuel commented on Mar 31

    I believe we are headed for a severe downturn for basically one reason: The debt bubble. The debt bubble just keeps getting bigger and bigger. Largest debt to GDP ratio since the Great Depression. How can anyone be a long term investor with this albatross not having been resolved?

  23. John Thompson commented on Mar 31

    Okay Samuel, we must be WESTSIEEDE, ’cause we’re still bloggin’.
    And kind of wonderin’, where did you get the Great Depression debt info. Our Grandforebears weren’t even allowed to amass debt in the national budget until after WW2.

    This new 7 or 9 trillion national debt is a new phenomenon. And it’s what 3 trillion this year alone! I can see why Petersen said it will be 73 trillion in 19 years.

    So read the robot suggestion. We have no industry man. Sollutions have to come from industrious/sustainable sources (wonder if robots can be green – DOPE!)

  24. John Thompson commented on Mar 31

    To KirkH, You have it exactly right. We will have robot bank tellers AND chef bot/sex bots. There WILL BE NO stinkin’ jobs (hardly).

    So, read HOW STUFFWORKS.com’s Marshall Brain article on GUARANTEED INCOME to BUY ROBOTS

    http://ieet.org/index.php/IEET/IEETblog/brain20070307/

    Besides, this doomsday stuff reminds me of the 2nd coming. And I don’t believe it. If the ultra rich (who secretly do have 1/2 or more of worlds wealt in few hands) wanted to break the US again like the GREAT DEPRESSION, they couldn’t collect on our debt. But, they will and are making us broke again to cut our consumption to save the EARTH.

    So, we need robots.
    http://ieet.org/index.php/IEET/IEETblog/brain20070307/

  25. brion commented on Apr 1

    hey Eclectic (you nut!)
    Is that $25k robot bonanza pre-tax?

  26. DavidB commented on Apr 1

    I’ve studied the financial markets for over 15 years. Being the slightly paranoid type I was sucked into believing the uber bear camp early so I have always kept an eye on them and their pronouncements in case anything blew up. Knowing they were more than willing to scream while Wall Street and the government were more inclined to sweep things under the rug It was prudent to keep an eye on both sides of the financial aisle

    The problem is that they have predicted 15 depressions 15 years in a row and none of them have come to pass! This is all the while that these guys have gotten stinking rich off the fears of the average man by selling them books, web site advertising and investment vehicles that have stymied the financial growth of these poor saps. I don’t know which is worse, that they can look themselves in the mirror every day selling the wrong investment advice year after year or that people keep going back to them in droves year after year!

    The only good to come out of that industry is a huge cross section of people have been educated on the corrupt political and banking systems and that those people have actually been very wise to get completely out of debt. Otherwise I’m not sure the true function of the perma uberbears can be justified, glorified or excused

    I hope I didn’t step on any uber bear toes. If I did I guess it’s just back at ya for all those years of questionable advice

  27. Nova Law commented on Apr 1

    Isn’t this book a reprint of the best-selling book “The Great Depression of 1990 – Why It’s Got To Happen and How To Protect Yourself” by Ravi Batra?

    Or perhaps it is an update of that prescient classic from Howard Ruff “Famine and Survival in America, 1976?”

    Or maybe it’s by the same author as “The Crash of 79”, Paul Erdman?

    Armageddon has been coming ever since the beginning of time. We’re closer to the end of the world now than we ever have been. Time to PANIC! (And also time sell books to naive suckers who believe this rotgut.)

  28. TaZ commented on Apr 2

    Well, I guess the debt will keep runnin’ as long as the bond holders are giving us rope, but between 2012 & 2020 1 in 5 Amerikanos will be looking to claim SSI/MediCare benies, so perhaps the ultra-bears may have some cause to hope…

    Between that and the housing problemo/dollar crisis, I think that things may indeed get “interesting” ;-)

    Then again the total gov’t. expenditures are only 38% of GDP, so we’ve got a bit to go before we’re upside-down!

    Got Ag or Au?

  29. pre-coffee commented on Apr 2

    I think this whole country is becoming nothing more than a desperate housewife. An entire generation of purpose-less beings with no goals in life other than to consume and be self-absorbed, whining, pansies with a super-sized serving of false-entitlement on the side. The debt bubble is symoblic of our own disconnect with reality. I place all of the blame squarely on Ryan Seacrest.

  30. Eclectic commented on Apr 3

    I’ve just listened to the approx 54 minute interview with Panzner done by Financial Sense Online. Thanks, Singer, for the link.

    At first I was not interested in the recent Big Pic topic about the book, since I’m usually not into the type of doomsday approach in books that you, Nova Law, provide excellent examples of. However, Panzner was on Kudlow today and I got to hear him talk about his book, and I came back here and noticed the link to the interview mentioned.

    I think part of the odd reaction people often have to books like this is because it’s so difficult to intellectualize why a rational person expecting Armageddon would take the time to write a book about Armageddon.

    It’s sort of like: one day, in the midst of Armageddon happening on top of your head, you might drop by the local library and along with the odd Gresham or other novel decide to check out his book on Financial Armageddon, just to find out what the hell happened to you and why you didn’t notice it when it did.

    You see… it’s just too damned surreal to ponder much about without going goofy. And, since most people can’t intellectualize themselves going goofy, they simply deny the consequences of the book having any merit.

    To my mind, Panzner has not produced the typical “World-comes-to-an-end-so-you-need-to-buy-this-or-that-from-me-to-profit-from-it-and-curl-up-in-a-hole-on-a-mountaintop-with-Ramien-noodles-and-a-sack-of-gold-and-an-AK-47” book. I’ll admit that using the word “Armageddon” tends to put the book in that genre, but I’d rather say that while in the philosophical sense Armageddon represents the end of all things, his book really represents to me the potential for merely the end of an illusion.

    The world would survive another Great Depression just like it did the previous one. Remember that in the Great Depression unemployment was never worse than about 25%… that means em-ployment was 75%. I can tell you personally that some of my family’s better years were during the Great Depression, unrelated to financial matters, which, by the way, weren’t too good for them.

  31. mmasters commented on Apr 5

    Have you Ever Personally Witnessed the Liquidation of a $Billion$ Company Due to Overloaded Debt?

    It’s Beyond Humbling– it’s a Frightful Experience!… Now, just add a Few More Zeroes to the End of that Equation– Does it Make any Difference in the End?

    Physics 101: The Larger the Mass, the More Momentum it Possesses.

    In other words: It’s very difficult to Stop a 3 mile long Train– and the Carnage will be Massive during the Derailment Event.

    The Writing is on the Wall, but We have the OPPORTUNITY to Change the OUTCOME!… if only We could GET OFF our ARSE ;-)

    Deliver me WOW Moments… LEAPFROG & INNOVATE! … We are Not Dead Yet ;-)

    Cheers!
    M

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