Gone Forecasting: Fishing for Economic Answers

CNBC’s Steve Liesman on "Unique insights on the credit crisis and the future of the banking system from a stream in Maine…"

I have a few words in this, along with my pal Scott Frew, and colleagues David Mordechai (Swiss Re) and David Kotok (Cumberland).

click for video


via CNBC

Gone Forecasting: Fly Fishing With Economic Pros 

Other SQUAWK BOX Leen’s Lodge related reports

John Silvia Chief Economist Wachovia 

Paul McCulley Portfolio Manager/managing director PIMCO   

Jobs Preview Stuart Hoffman Chief Economist PNC Financial Services Group   

David Kotok Chairman & Chief Investment Officer Cumberland Advisors


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What's been said:

Discussions found on the web:
  1. Rich Shinnick commented on Aug 30

    What will be the catalyst to a U.S. recovery?

    Barry, you mention a couple of quarters of more pain, but I think you may be referring to stock prices and since stock prices generally foretell a recovery a couple of quarters out, I think you believe that the macro economy may be weak for a good year or so. At least that is my takeaway from your soundbite?

    Personally, I think that you are very optimistic and I think that pain in the market and in the economy may linger for several years. I look at several factors:

    First, global growth has only started to sputter and may slow dramatically. In fact, even if the global growth story remains somewhat intact and global consumers save less and consume more, it is possible that the United States economy may not be a huge beneficiary because, beyond airplanes and some other high tech items, we simply do not make a lot that can’t be made elsewhere for less (yeah, I know, I sound like Peter Schiff).

    Second, the American consumer is getting crushed. Without getting redundant as most on this blog know the story, it is simply impossible to get much contribution here when debt to income is at historically high levels and prices on basics such as food and fuel are rising so rapidly.

    Third, the credit crisis will probably go on for years, not quarters. This is a big deal and a lot of players, from pension funds to community banks got seriously burned and either can’t or won’t lend on easy terms for years. How long did the S&L credit hangover last? Years as I recall.

    Fourth, government cutbacks, especially in state and local government, are just beginning to take hold. Unfortunately, local government feasted on easy credit both in borrowing and in temporary increased housing rleated revenues and that is going to go in reverse in a major way over the next couple of years.

    Finally, I look back at the last two cycles and I see the incredible “internet” / tech productivity gains of the late nineties and the housing/credit related boom of the last 5 years and I wonder what will power the next expansion? I am hard pressed to answer, but I suspect that energy (in all its forms) will be a growth area, but of course that depends on high energy prices and that sort of kicks the consumer in the teeth..so on a macro level this is self-cancelling.

    I think that consumers, banks, and government are all going in to a period of balance sheet repair and when I look at the excesses in all those areas, I just don’t think it all gets solved in a few quarters.

  2. John Doe commented on Aug 30

    Fishing for answers.
    Obviously, nothing was learned b/c of 9/11 attacks. The Gov. blamed lack of communication b/tn agencies that could have stopped the attacks. Now, the DHS has supposably fixed that. Well, this is proof that lack of communication still exists b/tn agencies..”Perhaps the computer that tallies the CPI doesn’t talk to the computer that measures the deflator.”

    Perhaps we need a Dept. of Economic Security to help find the solutions to our economic woes…. maybe Bush can win this war by fudging the #s…. a la 1984… Fake War, Fake Econ Growth… too bad the Hurricanes are real…

    One more thing, why do post stuff at the middle of the night, BR? Most people have a cigarette after intercourse. YOU blog. Please Blog with pictures next time @ 3am. Well, maybe not.
    Time to tend to the Harem, Yeeeees ladies.
    $$$ Sheik

  3. VJ commented on Aug 30

    The software has an auto-posting feature. You set the time you want it to post, like setting an alarm clock, and whatever time it is and wherever you are, Bada Bing, it posts.

  4. cielo commented on Aug 31

    Interesting but would have been good to see some fishing :) we know thats what you got up too.

    If my salary goes up 10%,6% 12 % then 0% and -.5% it’s not a big deal.

    Why is negative GDP growth for a quarter or 2 so catastrophic?

  5. Mind commented on Aug 31

    What could fund future economic recovery: massive investment in energy conservation, railroads and light rail, reduction of greenhouse gases, non-oil and non-coal energy generation. This would require redirection of military expenditure into those areas, plus non-politicized, technocratic governmental processes.

  6. JustinTheSkeptic commented on Aug 31

    cielo, because capitalism is built on an ever expanding premise. Scarry huh?

  7. Mark E Hoffer commented on Aug 31

    “..light rail, reduction of greenhouse gases…plus non-politicized, technocratic governmental processes”


    ‘light’ rail and the idea of GHG-induced AGW are the very essence of Politicized ‘governmental’ processes.

    for one ex.–“reduction of greenhouse gases”–steel mills, aluminum smelters, and/or electricity generators could, merely by capping their ‘smokestacks’, whack out the vast majority of revenue opportunities of the Industrial Gas Cartel (see: APD as one constituent)

  8. Jagmohan Swain commented on Aug 31

    What I am unable to understand is that if production hasn’t been impacted as much in the second quarter what explains the extent of lay offs?? Why weekly jobless claims is > 400k when factory’s are doing fine.If the services sector is responsible for the squeeze then there is reason to be optimistic because even in worst recessions services sector contract mildly compared to manufacturing.

  9. Greg0658 commented on Sep 1

    I don’t watch commercials anymore. Surf around em. Been there done that – extremely graduated.

    Tell CNBC to put the ads on the side like billboards. Then they will get some airplay /click in’s aroun here.

    Advertisers – thanks for providing the background of our lives. ya.

  10. Bryan Kavanagh commented on Sep 1

    This downturn’s been interesting insofar as it has most obviously been caused by the slowly deflating residential real estate bubble. [No it’s not simply a sub-prime crisis! Sub-prime is simply an outlier, a harbinger.] The point is that the precedent necessary for ALL recessions is a real estate bubble. UK economist/journalist Fred Harrison documented this phenomenon back to the beginning of the industrial revolution. We’ve tended to ignore that the 1929 share market collapse was preceded by a worldwide property collapse in 1925-27, or that the early 1970s OPEC crisis was accompanied by a peak in real estate markets. Real estate bubbles and their attendant unsustainable levels of debt have been an ongoing, unaddressed structural problem in economies to which we’ve turned a blind eye. If people want to see where we’re headed (and it’s a biggie!), have a look at the Kavanagh-Putland Index on our website. It may be Australian, but because our real estate sales data is the best in the world, it’s an excellent proxy for world economies. As always, there are steps we could take to keep the lid on these real estate bubbles, but our politicians, treasuries and reserve banks have proven loathe to do so. Why is this? For mine, seeking scapegoats such as banks or wanton borrowers, runs a bad second to addressing the structural fault in the system which recurs each 18 years or so.

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