The firefighter pictured (not me) is Dylan Ratigan and the felled tree is Peter Schiff.Dylan cut Peter down, as it looked to me, when he said to Peter "but your also trying to sell books...the reason you titled the book was so that people would get scared and buy it."
Peter said he is trying to help people.
Dylan added that we don't know (about Peter's scenario coming to fruition) and Peter said we do know. I think the look on Dylan's face was saying "huh."
Peter thinks financial Armageddon (my term not his) is very predictable.
The idea of picking a sensationalistic title to sell books is a valid question and obviously I have know idea what Schiff's intentions are, helping people or otherwise, but the episode was very funny.
I have trouble believing someone with such an extreme position that never changes. Perpetually betting on an outcome equal or worse to the great depression seems odd to me.
However you should have some sort of strategy in mind to get defensive on the off chance he is close to right. As mentioned the other day I would not be concerned with the first 10% down in what turns out to be a down 75% scenario.
14 comments:
Yes, I heard Dylan's cut...timber!!!!!!
While sensationalism in any form general is troublesome to me, I do think that some of these "niggling" issues require some neon-lighting, doomsday packaging to get people to just say "huh". We hear the term "complacency" often when it comes to investor sentiment. However, we rarely hear about "complacency" as a citizenry. I think that there is great complacency regarding these issues.
My Dad always has talked about these things. I thought he was nuts--I was busy raising a family, working my potookus off and generally just trying to stay conscious. Now that I'm reading and understanding more, I see these things a bit more clearly. And when I talk to my friends, they are wholly unaware of any of the issues much less the implications.
I think you make a valid point, but what I really want to hear is the story about that tree.
that many people are oblivious to risks, normal or otherwise, is a real issue and it probably contributes to volatility when volatility increases and why so many folks do assign emotion to the market.
Even bigger would be the folks that do not follow the market at all but do have 401ks that they do not pay attention to.
On the contrary... It just goes to show how clueless the CNBC commentators are about the actual state of affairs. Mark Haines had the same kind of reaction, as have others.
Peter is quick to point out these commentators are entertainers, not investment gurus. Their job is to get people to watch the show, and nothing more. They are not experts or educators, and are restricted in their own investment activities.
Peter encourages people to buy the book through his site to get an extra 50 cents from Amazon. Than and about a buck +- for the actual book profit amounts to peanuts in the grand scheme of his operations. IMHO the profit motive is not the reason he touts the book whenever he has the chance. He's proud of the effort and the book contains thought provoking material that many average investors are unaware of.
Peter Schiff should be commended for putting forth an effort to educate the public at large, so they aren't all lemmings glazed over by the perma-bulls and Kudlows of the world.
Whoever is right, it won't be very long before we know.
Personally I rotated some of my shorts into the oil sector until the trend reverses, for good gains over the last few days. The major bull trends have been threatened but not broken. It will take a bit longer. But I plan to be ready to react when the time comes, know where the funds will rotate to, and execute before a big loss. Once we resume the extended bear, I'll just ride the shorts with minimal trading. I don't have expertise to trade on the short side, so just use ETFs.
Keep up the great commentary. Now I have to go see what Ben said.
PS I have no account at Euro Pacific Capital and am not affiliated with Mr Schiff whatsoever, other than I believe he is dead right.
DaveB I have felt we are overdue for a normal recession and a normal bear market for a while but the magnitude he calls for is what I disagree with.
I realize you and i have covered this before.
Letting the trees rest for a moment, what does anyone make of the benefits of following the largely predictable Investors Almanac Nov to Apr timing cycles? I'm afraid the tax inefficiencies offset much of the gain.
Thanks for the past and present banter. Actually Peter does not think the stock market will be decimated in nominal terms. The Fed will continue to inflate to contain the damage (in nominal terms only). It's the damage to the dollar that he is concerned over. Look at the Dow priced in Gold. It's awful. That's why all the foreign currencies, foreign stocks, and PM in the plan.
The dollar is being debased significantly enough I'm beginning to wonder if traditional technical analysis is even valid anymore, without inflation-correcting the charts. We are down what... 33% in purchasing power from just 2000.
If using Gold as a comparison goes against your grain, then use a basket of currencies or some other means to inflation-adjust the stock charts.
I have pulled up some charts with Gold pricing in 8 different currencies and at times technical analysis would yield 8 diffferent approaches. I'm trying to "think outside the dollar".
Others like Roubini and McHugh have expressed similar concerns.
If Peter IS right, the damage is done and there's no escape. The entire economic system is tainted and subprime is just the place where the damage was exposed first. There is nothing to "spread", it has already permeated the system like molecular diffusion.
The Fed is the source of the bubble bath the unsuspecting public is about to be cleaned by.
Cant wait to see the video on europac's site. If anyone has a link right now please post it.
I pretty much agree with Schiff & Dave. Study our monetary system, the history of paper money and what it has done to our economy over the past 40 years. Its changed us from one that saves, invests and produces goods to an economy that goes into debt, consumes, and doesnt make anything anymore.
The Fed, gov and media are just trying to maintain public confidence in the face of this debacle. I think we have another year or two before things start to get bad and people start realizing what is really going on.
I would encourage everyone to listen to Schiff's interview with Jim Puplava.
http://www.netcastdaily.com/fsnewshour.htm
I suppose it's fair to point out that Schiff has a book out. However what I'd really love to see someday would be one of the CNBC hosts say to one of the endless stream of permabull guests "yeah but you're just trying to sell mutual funds".
i'm on board with calling out a perma anything and at least gleaning what would make them change their view which is asked every great once in a while.
Today's Ratigan - Shiff segment:
http://www.europac.net/Schiff-CNBC-3-21-07_lg.asp
JJCole said; “What does anyone make of the benefits of following the largely predictable Investors Almanac Nov to Apr timing cycles?”
Well, there’s an interesting article from the “Social Science Research Network” (SSRN) entitled, “The Halloween Effect in US Sectors.” Written by two college professors from Massey University, Auckland, New Zealand. It’s well worth the effort of signing up at SSRN to read their research.
The gist of it is, America is the least seasonally differentiated of the worlds major stock markets. They also break down seasonality by sector. Check it out. You may want to trade ETFs of other countries, instead of gaming the American markets. But if you do trade America, you might want to game by sector.
Here is the link:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=901088&high=%20halloween
From the site;
“All US stock market sectors and industries perform better during winter than during summer in our sample from 1926-2005. In more than two-third of all sectors and industries this difference in summer and winter returns, known as the Halloween effect, is statistically significant and in half of all sectors and industries risk premia are negative during summer. However, while all sectors and industries show this effect, there are large differences across sectors and industries. The effect is almost absent in sectors related to consumer consumption but strong in production sectors. We illustrate how these differences between sectors might be used to improve the risk return trade off using sector rotation based on Fidelity sector funds and show how an investor might have benefited from such a trading strategy.”
Do you still stand by this statement? Schiff (and Ron Paul and Austrian economists) have been sadly proved right.
It's time to start listening, though it would have been better to listen a few years ago before the latest bubble burst.
are you saying this is Armageddon?
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