Here is the latest conversation I had with money manager Andrew Horowitz…. new insights for anyone who invests in anything. This week we again discuss the muni Bond “problem.” And what’s a bubble really?
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yay! been waiting for this!
Still waiting for the horrorwitz predicted collapse for the Fall of 2009. I predicted Obama economic performance as follows:
Year 1 : stop the free fall. Strengthen the trusses of the economy: done
Year 2 : economic and job growth, stock market confidence : done
Year 3 : employment gains , unemployment under 10 %. : WIP
Year 4 : happy sheeple, more weight gain , gym memberships up : TBD
Year 5 : Obama second term ; teabagger implosion ; GOP looks for new brand.
Horrorwitz 0 , Dallas 5
Big difference in China management. If the clown causing a crisis is caught he is shot, not offered a Czar position in the Obama administration or a job at the SEC.
I really would like to see how Horowitz’ predictions from the past have panned out over time.
I vaguely remember hard calls of doom and gloom that never came about, but what would be his score card overall? Is he an A-list prognosticator, or do his pronouncements fall within the range of coin flipping?
This might be a nice class research project for an enterprising poly sci student.
The sad thing is no matter how bad things are most people love this administration. They believe what they want and don’t care about reality. This is what happens when politicians have great PR people, it becomes a religion. Case in point “Dallas”.
Take any “group” of predicters and by using a coin after a period of time a smaller and smaller group of them will have amazingly good track records. Its the same luck that bounced the goof balls out during round one.
Statistics: 99 out of 100 educated people don’t know the subject very well at all.
@bobbo – this used to be the basis for a famous betting scam.
Tell half the people in a group that team A or team B will win the game. Then of the half that were ‘correct’ tell half of them that Team C or D will win the next game and so on.
After 3 rounds of this you have 1/8 of the original punters convinced you are a genius – SELL them your predictions for the next game.
@#2 One small niggly bit: 1.5 Tril deficit this year and debt>economy before next elections. Latter is the killing point Kensian economist fail to notice. Compared with plane flight – yes, if engine stalls (recession) from too steep climb (bubble) it is fine to get into temporary nose dive (deficit spending) to regain speed (get out of recession) and restart the engine. So far, so good, Physics and Kensian Economy on the same page. However, we do not fly in empty vacuum (no limit to debt). There is ground somewhere below (debt=economy size). There is no gaining momentum once we hit the ground.
Now to the recent rise in Obama popularity. Answer is again in experiment. Psychological experiment (well known and documented) that explains why Americans feel better about the future and Obama in recent days:
A rat is placed in test box composed of two rooms connected by open doorway.
At the other end of second room is some cheese.
At the opposite side rat is attached to a spring he must pull to get to the cheese.
Relevant result: rat pulls with constant, top force until he passes the doorway. (No matter where we place doorway).
Than, suddenly he drops his effort for a while. Brain scan shows satisfaction comparable to actually reaching the cheese. Resuming with full force further on.
Applied to a general situation: creatures inherently get satisfaction when they
reach some clear intermediate goal.
Americans have succeeded in placing some check on Obama extreme agenda through the Congress;
Obama offered plausible signs of shifting his actions to the middle; all coinciding with
traditional renewal symbol of a New Year. Intermediate goal have been reached in practice and symbolically.
There is relief and increased satisfaction….
Now, to the Cheese !
Nobody–that was exactly what I was thinking of AND it has actually been the basis of some stock promoters success. When they went bust, the prosecutors interviewed them and found out they really had no expertise at all==they were just lucky. They had a terrific track record, but all they were was lucky.
Beyond a few negative touchstones like this one, I consider myself to be in the 99.99% just like most of us. I leave faux expertise to the likes of dismal. Should I even read his post? Sure, why not.
Nope. No joy there. Pure blather. Almost amusing.
#8 agreed but the large deficit is equally attributed to low revenue (taxes) paying for government services and entitlements that were not cut. Sheeple entitlements, military, interest payments on the China visa card.
Say, Are you prepared to cut defense spending which today is the combined total of the worlds top 27 countries (25 of which are allies) ? Would you feel safe from that impending Russian invasion ? I don’t know about you but I’m not too concerned about it and willing to put that sacred cow on the chopping block. Again, sweep that piece of trivia under the sheeple rug.
Obama is doing the best he can to stimulate the economy, put people back to work and reduce dependencies on foreign nations. I expect that to cost investment money up front , yes spending. The sheeple want a magic bullet
and what about the millions of new unemployed because of your defense cuts dallas?
A bubble is this:
Price A: defined by supply and demand
Price B: defined by speculators expecting A to rise
When B runs to far ahead of A, you have a gap between the real value and the market valuation. When people realize that their investment will not give the return the market suggests they pull out, and the bubble breaks.
#5 Case in point “Dallas”.
Not religion but zealotry firmly founded in stupidity. Opinions by rote.
CHANGE/HOPE or, STAGFLATION/DESPAIR
Which do you think will happen now?
I think the picture sums it up quite nicely.