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To: marc ultra who wrote (6504)	10/15/2011 10:44:59 PM
From: Investor2	2 Recommendations of 7592

Chart of the Day Today's chart illustrates how the recent rise in earnings as well as the recent stock market action has impacted the current valuation of the stock market as measured by the price to earnings ratio (PE ratio). Generally speaking, when the PE ratio is high, stocks are considered to be expensive. When the PE ratio is low, stocks are considered to be inexpensive. From 1900 into the mid-1990s, the PE ratio tended to peak in the low to mid-20s (red line) and trough somewhere around seven (green line). The price investors were willing to pay for a dollar of earnings increased during the dot-com boom (late 1990s), surged even higher during the dot-com bust (early 2000s), and spiked to extraordinary levels during the financial crisis (late 2000s). As a result of the recent spike in corporate earnings as well as relatively lower stock prices (e.g. the S&P 500 currently trades 11.7% off its April 2011 post-financial crisis highs) the PE ratio has dropped to a level that has not existed since 1990. chartoftheday.com

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To: Investor2 who wrote (6505)	10/16/2011 9:52:32 AM
From: Boca_PETE	of 7592

Aside from the interesting EKG chart (which would certainly alarm me IF I were a cardiologist, and I'm not), economist Larry Lindsey pointed out this week the fact that INCOMES ARE STILL FALLING and PERSONAL SAVINGS ARE DECLINING (ie. people are drawing down personal savings for whatever spending is going on.). It's hard to disagree with his conclusion that this situation is unsustainable and does not imply well for a healthy economic recovery in the near term. Maybe this is what the ECRI is seeing in their economic prognostication of an unavoidable double-dip in our near future. Moreover, the most recent stock market rally appears to be on very low volume which leads me to believe we are in for lower lows. P

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To: marc ultra who wrote (6504)	10/16/2011 5:57:17 PM
From: marc ultra	2 Recommendations of 7592

Lakshman and Bob in the Thunderdome. 2 men enter, one man leaves. While technically there may be wiggle room because they're not defining a recession in exactly the same way, the battle lines are now clearly drawn, one will be correct and one will be wrong. Today Bob flat out said the ECRI ("the private forecaster out of NY") will be wrong and those (like me) who have acted on their call will regret if. It's possible Bob might even be using me as as part of his example since when he was using an alias he would respond to me at various times (including praise at times), so if he glances at this board occasionally he is aware that I have flipped from bull to bear due to the ECRI call but obviously a lot of people have made investment changes based on the CRI so the possible personal point would not be that relevant regardless. For those into it this is epic stuff. Will the ECRI when it comes to market action end up like an Elaine Garzarelli making a disastrous reputation destroying sell call while Bob is on a flat out buy call? Will the ECRI's flawless record for the last 15 years finally come to an end downgrading them to just another fallible view sitting in the trash heap of history of forecasters? They didn't just say there could be a recession, they were adamant that a recession couldn't be stopped and things will get far worse. Lakshman did the full media tour after they released their call to the public and had that air of complete certainty and put full reputational capital into this call. It won't make that much difference to Bob or others doubting the call because no market timers or other economic forecasters have been perfect and institutions are not paying in the 6 figures for Bob's opinions as they are for subscriptions to the ECRI data and opinions. I still have to think the ECRI will prove right but it's certainly true my responding to the ECRI call has already been very costly. So I will be following this with extreme personal interest and my money for now is still on the ECRI but yes, I'm nervous about the possibility this could be a spectacular failure by the eCRI and I'm now in the uncomfortable position of finding myself rooting for a bad economy and bear market now that I'm committed that way.

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To: marc ultra who wrote (6507)	10/16/2011 8:18:33 PM
From: marc ultra	2 Recommendations of 7592

This is really Lakshman versus Bob Thunderdome battle part deux and part 1 happened in March of 2008 and after Lakshman and Bob entered the one man leaving (still alive if you never saw Mad Max Beyond Thunderdome) was Lakshman. The ECRI made their recession call in March 2008. I hate to sound like the bashers but I do still have a copy of the March 2008 Marketimer and the parallels to today are great. We just came off what seemed like a spectacular test of what at the time looked like the intermediate term correction low and Bob had switched to an attractive to purchase in the area of the S&P low 1300s area of the correction lows from I believe a dollar cost average recommendation for new money. Of course we now know the market dropped almost 50% t he 666 lows from there and the recession that the ECRI called at the time proved to be what investors needed to heed. Bob had noted the first two quarters could possibly end up slightly negative making for a very mild recession while today he seems to think growth will remain at about 1% or above. While I'm not looking for another 2008 style collapse and mega-bear from here, I do think the economic and political factors have left us in poor shape to handle a new recession and and the possibility of a new shock that could make a bear far worst is definitely something to worry about. The Fed has little or no tools left compared to 2008 and the political and fiscal situation is toward austerity rater than stimulus which also makes any fiscal response near impossible given current budget issues in the EU and Europe. Also something as minor as China slowing more than expected is a threat in this environment. So while the ECRI recession call and my current switch to bearish may prove spectacular blunders I will continue to expect a recession that will definitely lead to a new bear market. I won't try to guess the magnitude of the recession or the bear but I think there is good reason to get out ot the way of what could become much uglier than current thinking.

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To: marc ultra who wrote (6507)	10/16/2011 8:42:54 PM
From: joefromspringfield	1 Recommendation of 7592

Marc Great post. I took Brinker's comment today that those who are predicting a recession were wrong and would regret it to include Nouriel Roubini as well as ECRI. He went so far as to say the prediction was bogus. HOT ON FACEBOOK Double-Dip Recession a Foregone Conclusion: Roubini Published: Tuesday, 11 Oct 2011 \| 5:09 AM The world's advanced economies are headed for a second recession, regardless of whether there is further chaos in Europe, noted economist Nouriel Roubini told CNBC on Tuesday. Roubini — ... — said his reading of recent data suggested the U.S., euro zone, and the U.K. are already on the verge of falling into a recession in the next quarter or two. "The question is not whether or if there is going to be a double dip, but whether it's going to be mild or severe with another financial crisis," Roubini, head of Roubini Global Economics, told CNBC on the sidelines of the World Knowledge Forum in Seoul. "The answer on that depends on the euro zone."

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From: joefromspringfield	10/16/2011 8:53:51 PM
	3 Recommendations of 7592

Back in May 2008 Bob Brinker bashed those who were predicting a recession on Moneytalk. Here is what he said: RECESSION CASSANDRAS.... Brinker said: “What we have right in here now is evidence that the Cassandras, who earlier this year, were telling us we were in recession – right now they’ve basically – well I’ll be kind, basically, they look like fools right now. Because all that they’ve accomplished with their talk about recession…………all that they have to show for their efforts is that they scared the people who listened to them out of the stock market this past winter……….”

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To: joefromspringfield who wrote (6510)	10/16/2011 11:33:44 PM
From: marc ultra	2 Recommendations of 7592

Joe, Roubini is a miserable example IMO. Along with Meridith Whitney and others who looked like geniuses for a few minutes after Lehman was allowed to go down, they've all been wrong or dead wrong since as their grim bearishness has proved ridiculous. Most of these guys remained negative while the market doubled off the lows. The ECRI has no such baggage. Because they are extremely conservative and turned back positive on the economy at the correct times, I just can't dismiss them like Bob. I agree Bob was rather bold in unnecessarily saying the ECRI call will be wrong. The record tells me in this case to give the benefit of the doubt to the ECRI instead of Bob and and thus against my initial expectations. I've made that firm decision and have and continue to take action accordingly. Time will tell. As I think I said before, the ECRI has the most on the line. If there's no recession of some type it will be a huge blow to their reputation and the massively high fees they get paid for their advice and statistics. Bob's just another market timer. Far better than most but with a mixed record like all of them and his radio show will remain as long as he cares to do it. This is really the ECRI out on a limb and I hope I'm right that they will continue not to fall off.

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