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Thread: Peter "Dr. Doom" Schiff vindicated

  1. #1
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    Peter "Dr. Doom" Schiff vindicated

    [url]http://www.youtube.com/watch?v=2I0QN-FYkpw&eurl=http://andrewsullivan.theatlantic.com/[/url]

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    "Vindicated" is the understatement of the year! He was absolutely spot-on and essentially made a bold call that has now been supported by [B]Trillions[/B] of dollars in worldwide losses.

    5-star thread.

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    [QUOTE=jetstream23;2864243]"Vindicated" is the understatement of the year! He was absolutely spot-on and essentially made a bold call that has now been supported by [B]Trillions[/B] of dollars in worldwide losses.

    5-star thread.[/QUOTE]
    +1 Wow. Ballsy Job. Uncanny call on the timing. I still can't understand how so many smart people didn't see there was a problem looming..

    How ashamed must those people be who were laughing at him. Love to see some of their statements now. My

  4. #4
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    List of those who get it:


    Robert Shiller
    John Hussman
    Peter Shiff
    Nouriel Roubini
    Ron Paul
    Jeremy Grantham and GMO
    Smithers (not the Simpson's character)
    Nassim Taleb (black swan guy)
    Paul O'Neill (former Treasury Secretary)
    IrvineRenter from Irvine Housing Blo, in fact all the housing bubble bloggers
    Last edited by BrooklynBound; 11-15-2008 at 12:36 PM.

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    Count Australian Professor Steve Keen among those who got it right - has been predicting the credit crunch since 2004.

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    Also, there have been a number of hedge funds that "shorted" the subprime mortgage CDO's, & made a killing...that video was amazing...the guy laughing at Schiff at approx 3:40 is a total douche- this is a cautionary tale...

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    Can anyone explain why this wasn't totally predictable? The answer might help me understand how we get out of this with out bankrupting the country..

    Consumer spending is around 70% of our economy, which essentially means our economy is just a shell game. Our explosive growth since the 90's has been a debt fueled miraged. Consumers are maxed out and credit is tighter. Now consumers are starting to lose their jobs which is going to further constrict spending and lead to lowered profits for companies, more unpaid mortgages, loads and credit cards, further credit restrictions, which leads to more job losses and so on and so on and so on..

    So how does the snowball stop before it becomes an avalanche?

    Now that American's are aggressively paying down debt/saving (I assume), how long before confidence raises and they start spending again?

    Also, what role does the media play here? I work in retail, and as Best Buy released this week, the change in consumer spending has been "seismic". There's no way thats solely related to the credit crunch.

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    [QUOTE=CTM;2864533]Can anyone explain why this wasn't totally predictable? The answer might help me understand how we get out of this with out bankrupting the country..

    Consumer spending is around 70% of our economy, which essentially means our economy is just a shell game. Our explosive growth since the 90's has been a debt fueled miraged. Consumers are maxed out and credit is tighter. Now consumers are starting to lose their jobs which is going to further constrict spending and lead to lowered profits for companies, more unpaid mortgages, loads and credit cards, further credit restrictions, which leads to more job losses and so on and so on and so on..

    So how does the snowball stop before it becomes an avalanche?

    Now that American's are aggressively paying down debt/saving (I assume), how long before confidence raises and they start spending again?

    Also, what role does the media play here? I work in retail, and as Best Buy released this week, the change in consumer spending has been "seismic". There's no way thats solely related to the credit crunch.[/QUOTE]

    The issue is that you may see it coming, you just don't know when it will occur. This is why I don't market time... a few people can make money off of it, but most can't (after you factor in transaction costs and taxes).

    If you thought the tech bubble was overstated in 1997, you were right, but if you got out then, you missed a lot of gains. If you thought the housing bubble was overheated in 2005, same story.

    So I'm not sure what to do. I guess be more diversified? One would think gold would've held up during this mess and the dollar would have tanked -- the opposite happened.

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    Does Schiff have a website? What is he saying now?

    Some people are calling for a rebound in late 2009. Some say 2010. But some say there never will really be a true "rebound". We've essentially hit the reset button on the economy and need to structurally rebuild the foundations of the economy over the next 5, 10, 20 years. Several scary scenarios out there. I've been 50% in cash for the past year and now I'm trying to think about where to put that money - U.S. equities (blue chips or high Beta stocks that would outperform in a rebound?), corporate high-yield bonds of those being backstopped by the government (getting TARP money, etc.), gold, or other beaten down commodities...

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    All these morons were recommending financials. Here's a recommendation: Never buy a stock on its way down. The only thing that pays is price.

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    [QUOTE=Tyler Durden;2864213][url]http://www.youtube.com/watch?v=2I0QN-FYkpw&eurl=http://andrewsullivan.theatlantic.com/[/url][/QUOTE]

    Great stuff there.


    I liked Ben Stein saying that Merril was ridiculously underpriced at $75, it's now at $13.

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    [QUOTE=jetstream23;2864885]Does Schiff have a website? What is he saying now?

    Some people are calling for a rebound in late 2009. Some say 2010. But some say there never will really be a true "rebound". We've essentially hit the reset button on the economy and need to structurally rebuild the foundations of the economy over the next 5, 10, 20 years. Several scary scenarios out there. I've been 50% in cash for the past year and now I'm trying to think about where to put that money - U.S. equities (blue chips or high Beta stocks that would outperform in a rebound?), corporate high-yield bonds of those being backstopped by the government (getting TARP money, etc.), gold, or other beaten down commodities...[/QUOTE]


    The bond market has gotten so beaten up that you can now get mid-teens returns from alot of very good co's...it's higher in the capital structure than stocks, thus a safer investment that offers an excellent return.

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    [QUOTE=Tucker134;2865097]The bond market has gotten so beaten up that you can now get mid-teens returns from alot of very good co's...it's higher in the capital structure than stocks, thus a safer investment that offers an excellent return.[/QUOTE]

    What is a CO?

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    [QUOTE=BrooklynBound;2865221]What is a CO?[/QUOTE]

    I think he meant companies.

    Good point on the capital structure. Bond holders get paid first, correct?


    Anyone with good recommendations on Bond funds at this point. I'm looking for mostly investment grade, maybe a little lower quality sprinkled in for return.

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    [QUOTE=jetstream23;2865526]I think he meant companies.

    Good point on the capital structure. Bond holders get paid first, correct?


    Anyone with good recommendations on Bond funds at this point. I'm looking for mostly investment grade, maybe a little lower quality sprinkled in for return.[/QUOTE]

    I'm not an advisor but I like to take my risk on the equity side, not the fixed income side. Bonds for me are not about total return but about liquidity and safety. That's why I only go for US Treasuries, TIPs, I-bonds, diversified Muni bonds, and AAA corp bonds.

    As for funds, Vanguard and Fidelity have low fees. The thing about funds is that they can lose their value, unlike if you hold an individual bond to maturity.

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    [QUOTE=jetstream23;2865526]I think he meant companies.

    Good point on the capital structure. Bond holders get paid first, correct?


    Anyone with good recommendations on Bond funds at this point. I'm looking for mostly investment grade, maybe a little lower quality sprinkled in for return.[/QUOTE]

    23, if you're looking into this let me know what you come up with..

    Btw.. I'm currently wondering i the american publics short attention span is going to help resolve this.. IN other words, will they stop paying attention and go right back to spending maybe even as soon as December?

  17. #17
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    Schiff

    He should be the next secreatary of the treasury. Period.

    For those of you looking at bonds. Look at JNK. It's the index ETF for High-Yield Bnds, currently yielding close to 14%. Remember that these are BB and below, so expect some higher defaults and figure real yiled about 11%. Still outstanding. If you want safer, llok at Muni's. Yileding up to 6% and all tax free.

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    [QUOTE=dermlord;2865624]He should be the next secreatary of the treasury. Period.

    For those of you looking at bonds. Look at JNK. It's the index ETF for High-Yield Bnds, currently yielding close to 14%. Remember that these are BB and below, so expect some higher defaults and figure real yiled about 11%. Still outstanding. If you want safer, llok at Muni's. Yileding up to 6% and all tax free.[/QUOTE]

    The risk of calls or defaults make junk bonds have a lower return than their yield. You're not adequately compensated for the risk you take. In this economic environment, I would not touch questionable paper, much less crappy paper.

  19. #19
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    brooklyn bound

    I generaly agree, but this is an index fund so you are fairly well diversified. If you double the historic default rate on BB rated and below bonds, this will still have an attractive yield, plus it is currently trading at such a discount that even in case of default your recovery rate might make you money. Of course the risk is higher, but remember Enron debt was rated AAA on Friday before they declared bankrupcy on Monday. I would never put ALL my money into this, but for someone looking to create a well diversified bond portfolio it's worth a look. A couple of years ago they did a study and BB raated bonds perfromed the best in terms of risk/reward over the long term.
    Of course GE and Pfizer are currently yielding 8% dividends, if you think theses are safe, this might be the time to buy for yield. Heck, At&T and Verizon are both over 5% and they will probably be more resistant to the recession, except if corporations go completely in the tank.

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    WHat's the best way to buy municipal bonds?

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