Kass: Why the Bears Are Wrong

[Kassz007]

Quote from lolatency:

Because unemployment will only get worse. GM just sent out pink slips to white collar employees. GM goes, supply chain goes, and we're looking at 3mil+ more jobs gone. There's a consumer spending contraction in place.

Second, if China does start to move to kill the dollar, the cost of consumer goods will go up. They can't maintain that loose-peg. If consumer buying power goes down, we get hit with a double whammy over top of the unemployment. Clearly, China is not pleased with the way the US is managing things. They're going to try and save their investment.

If unemployment continues to rise then yes, getting people to spend will absolutely be a problem.

I believe what you're talking about is stagflation. This would be a problem. But I think people are putting the odds of China doing something drastic way too high. China knows their economy will be devastated in this scenario.

 

[Kassz007]

Quote from S2007S:

It might pick back up but I see no way of any economic expansion based on this just alone. This is not a crisis that will be forgotten sometime in 2009 or 2010, this is an economic downturn that will take many years to unfold. Yes we may see the economy stabalize and see some signs of growth once again, but that will be limited as well, the boom in the economic cycle that we have been through over the last 20-25 years has come to an end. Easy credit is history, and if anyone thinks easy credit is the only way to jump start an economy like I feel they are doing at this very moment, is an idiot.

Easy credit is definitely not the ONLY way to jump start an economy. Easy credit is not history however. It won't be AS easy, but I guarantee people will be still be getting loans who shouldn't be, and won't be able to pay them back.

 

[aresky]

Quote from drukes1234:

I've read Kass for years and any bottom calls he made last year were very short term trades, or what he calls "rentals" -- he was right on the market calling the bear market back in 2007, he's one of the best in the biz

Abaout one year ago Kass wrote reasons to Short Berkshire

Kass Katch: 11 Reasons to Short Berkshire
03/10/08 - 01:48 PM EDT


http://www.thestreet.com/newsanalysis/investing/10406915.html

 

[ByLoSellHi]

Kass needs to eat more fiber.

He's going to see the true lows, soon, also - and will be all 'mea culpa' like.

 

[Susannah]

Quote from lolatency:

Don't get why consumer spending will rebound on account of more lending. More unemployed people, more people with wrecked credit, and more foreclosures on the way [mortgage resets.] If spending doesn't increase, it doesn't matter that the financial sector is back to normal. Don't forget commercial real-estate. They will get socked during the poor-spending cycle.

I like this to keep me abreast of consumer spending. Not improving yet, that's for sure:

http://www.gallup.com/poll/112723/Gallup-Daily-US-Consumer-Spending.aspx

 

[TraderZones]

Quote from lolatency:

Clearly, China is not pleased with the way the US is managing things. They're going to try and save their investment.

Who gives a whoopee what China thinks? A country that needs to continue to block various websites is not a country that is in touch with reality.

I was there in 04. My Chinese friends basically told me the govt lives on a different planet than its people.

 

[TraderZones]

Quote from lolatency:

Clearly, China is not pleased with the way the US is managing things. They're going to try and save their investment.

Who gives a whoopee what China thinks? A country that needs to continue to block various websites is not a country that is in touch with reality.

I was there in 04. My Chinese friends basically told me the govt lives on a different planet than its people.

I would love to see them implode. They are single handedly a wrecking ball to part of the economy of many countries, from Afghanis who used to hand weave rugs to closed factories around the world.

 

[lolatency]

Quote from TraderZones:

Who gives a whoopee what China thinks? A country that needs to continue to block various websites is not a country that is in touch with reality.

I was there in 04. My Chinese friends basically told me the govt lives on a different planet than its people.

China currency roughly pegged to dollar. If China thinks dollar is going to toilet, China unpegs currency from dollar and their currency rises in strength relative to the dollar. Consumer spending plummets, because Chinese imports become too expensive to consume. Short term, this is a shock as the US has no functioning and established manufacturing base.

So yes, it does matter what China thinks because of how much trade we give that awful regime.

 

[EMRGLOBAL]

Commercial RE is getting crushed as we write these post. It has yet to hit the mainstreet press. It is falling apart. More Empty commerical RE right now, than we saw in the 80s. ...During the Oil Bust.

This was a simple snap, from a oversold market. Nothing has gott'n better in the Economic sense. It is slowly starting to find a bottom but we are no where near a turn around.

Obama has scared Private Equity and Cash on the sidelines is sitting tight.

No, Private Equity is not going to partner up with the GOV. to buy toxic waste 15 cents to 30 cents on the dollar...not gona happen.

I deal in Private Equity, and my clients are laughing their ass off at the plan released by tres. These guys are in Land, Gold, Oil and they are sticking a bunch of money in Short term Muni's (Which I think is far risker than oil, with the States going bankrupt and local Muni's not meeting their budget).


The rich are playing Hard Assets...the fools are buying heavy into the market.

 

[riskymove]

I have been reading Kass' comments off and on since 2003 but every day since mid 2007. Does he make calls that don't work out? Of course. But anyone that wrote publications that were out there for anyone to read in retrospect would ALWAYS be found to be wrong from time to time. But Kass is right a hell of a lot more than he is wrong. You always have to take everything anyone reads with a grain of salt and see if it makes sense for you. But for my dollar he's about the best out there in terms of making trading calls. Doesn't mean he's always right. But he's on a ton more than he's off. I think his hedge fund was up 70 to 80% last year from what I hear. Not bad for a couple hundred million fund in a total crap market. Could individual traders do better? Yes but most likely they ain't running mid 9 figure accounts. My two shillings...