Merrill’s Rosenberg: Deep Recession Looms March 20, 2008 3:00am by Barry Ritholtz From the WSJ’s video center: Spread the wealth. twitter facebook linkedin What's been said: Discussions found on the web: Simon commented on Mar 20 Crikey! don’t wall street journalists sleep? Lucky they have a ready supply of clean pressed shirts handy. Oh yeah the recession…I’m not looking forward to it although if it means I can afford a better house it won’t be all bad. Bob commented on Mar 20 Wow, that guy looks sick… JustinTheSkeptic commented on Mar 20 My goodness, how american you two guys sound – shallow. Looks matter, but come on, life goes on… I liked the “thin edge of the wedge,” comment about employment/unemployment. cinefoz commented on Mar 20 Just curious. Now that the bottom has fallen out of gold and oil prices are plummeting, will there be cute little animated graphs that have the word ‘inflation’ crossed out? It took weeks of speculative investing to get those prices that high, and about a day to bring them back … or at least make a good start back to reality. I know. All the fantasy short sellers here are making a fantasy killing using fantasy money and fantasy strategies. Gold $2,000 in May, right? But first billions will be made this week because of perfect foresight in knowing this drop would occur at this exact moment. I know. There will be over intellectualizing that clearly explains that this is only a respite and the stock market will officially cease to exist is a couple of days. Better sell everything today, then kill yourself. Commodities will rally and be too expensive for anybody to ever buy again, except for speculators who sell contracts to each other. Har Har Har! John commented on Mar 20 Barry, if you haven’t taken a look at it already, Chris Puplava over at Financial Sense had a pretty good piece about the strength of the American Economy just before it headed into recessions in previous years (’73, ’81, ’90, ’01 and current) — using ‘various economic indicators’. See charts 16 and 17 near the bottom of the page. Considering the ‘Source’ of the Information, I found the Data pretty compelling. http://www.financialsense.com/Market/wrapup.htm cinefoz commented on Mar 20 I still laughing so hard I think I spit up a little. cinefoz commented on Mar 20 Could oil and gold just have been a commodity bubble, and not an inflation hedge? Heaven forfend, no, not that! It really is inflation, and any claim to the contrary is misinformed. Just wait. Speculator will start selling contracts back and forth to each other even faster this time. Halfwit followers and suppliers of margin credit will confuse this with another sure thing and build a better bubble next time. I really don’t believe there is any direct relationship between having money and having brains. It really just looks like a big, fat, daisy chain circle jerk being performed by lemming speculators, and abetted by retarded newscasters who think all rising prices are dollar related. And anything going up will continue going up forever. As I might have said before, Har Har Har! And I really am enjoying the misery of others at this time. TempusFugit commented on Mar 20 What a waste of time! His only argument for a DEEP recession is that jobs have (likely) fallen 146,000 so far in 2008? Anything else but his say-so? No…oh wait…he was talking about MER, not the whole economy…never mind. B.B. commented on Mar 20 Cine, I think you are losing it? You ok? Don’t lose it now, you are my contrarian indicator. Thanks again for your posts. I shorted gold on monday just 4 pts off its high and covered 3 positions the last 2 days.(all posted in here and in live time and that was not fantasy money). I know you will be dissappointed in me since I didn’t catch the bottom in gold, but I am not a swing trader by nature. I am sure you will be ok. 1350 S/P is just around the corner and you can get yourself out of your 3 month long swing at break even. Now thats funny!! cathompson commented on Mar 20 I think the volatility has gotten to cfz. Shadow boxing in the half light. cinefoz commented on Mar 20 At 1350, I’ll make money. Mr. Obvious commented on Mar 20 cinefoz, a bit early to be drinking, no? cinefoz commented on Mar 20 And it’s been less than two months. To me, it’s more like fishing. You find a good place, you cast your line, you wait a little, and then you reel it in. Then you do it again. Soon, you have a big pile of fish. Last post on this thread, if it gets through. The filters appear to have my name. Roundabout commented on Mar 20 Cinefoz, If there is inflation gold will go up. If there is deflation cash will be king. All the rest is talk. You are either saying, or at least implying, that you know when to get in and out of the market. Har, Har, Har. freejack commented on Mar 20 Wow. That dude is bugging. steve commented on Mar 20 Alright, Can’t take it any longer. Why don’t you commentators check out the WSJ economic predictions for 2007. Rosenberg called the recession. He was, for the most part, on his own. I don’t mind one or two smart ass comments, but come on, you guys aren’t Colbert material. Francois commented on Mar 20 “Now that the bottom has fallen out of gold…” Huh? What does that means exactly? The only “bottom” I can see on any price chart is the left hand corner of the Y axis a.k.a. zero. That is the mathematical bottom. From a trading perspective, well, that all depends on how one trades the yellow metal. Speaking for myself, gold is a long-term protection vehicle against times like we are living now. Hence, my time frame is radically different from say, the COMEX trader who’s short or long every day/week etc. Since there is no such thing as “the bottom” the only question is: Where is your bottom in gold? Mine is 770.17 USD, the 65-week EMA. That tells me that the long-term bull market in gold is intact. You mileage varies with your trading horizon. Patrick commented on Mar 20 Just wanted to say Barry has pointed out repeatedly that Gold is over 70% influenced by the USDX => inversely correlated with the dollar. EURUSD hit 1.59 and just like at 1.49 we are undergoing a correction / possibly a larger turnaround. This is why the Gold PRICE fell. This does not reflect a drop in the actual intrinsic value, which you’d first have to derive(if Gold price rises “alone” without a USD decline, then GOLD is moving – otherwise it’s the USD moving). It’s not that difficult. And the stock markets get their “mad crash panic step down” move pretty soon is my guess. The carry trade has already reached crucial levels, the EJ is about to reach a weekly close below an 8 year long trendline. Just saying. kk commented on Mar 20 steve, The question is, is a recession already priced into the current market quote. To wait until things are better, means paying higher prices. Of course time horizon & risk tolerance is in the eye of the beholder. Pool Shark commented on Mar 20 Patrick, The funny part is Chuck Butler is now calling for the US$ to be the next funding currency for the carry trade. And why not? It’s a low-yielder whose future looks weak. Jmay commented on Mar 20 First we have Charlie Rose interviewing Volcker with a black eye and a bandage on his face. Now we have Justin Lahart looking like Death popped him in the microwave and warmed him over. When even the talking heads look this bad, it’s not a good sign. steve commented on Mar 20 >>First we have Charlie Rose interviewing Volcker with a black eye and a bandage on his face. I saw that. How did Charlie get that? >kk My point is that you rarely see David on CNBC, Bloomberg etc… and when I do he is usually accosted as if he is some sort of deviant for saying that world isn’t all cookies & cream. About 6 months ago he was on Bloomberg & the interview chick was having a fit. But he helped save my ass. Based on his observations I mostly bailed in October. No skill on my part. Now today on CNBC they had, again, Brian Westbury. I’m sure a nice guy and all but he says the same thing he did six months ago. Guess what. He was wrong six months ago. People should bust on him and Luskin etc… instead they diss Rosenberg, Joe Pagigela (or something) etc.. including very negative comments when, correctly, that lady downgraded Citi (can’t remember her name) & said it could trade in the 20’s. Guess what. I rarely see these guys & gals on CNBC. And when they are they get cutoff, like Barry on Kudlow.