Posted on 09/10/2007 6:49:29 AM PDT by Hydroshock
SAN DIEGO (MarketWatch) -- You will have to pardon Paul Kasriel, chief of economic research at Northern Trust in Chicago, if he hasn't been the life of the party over the past seven or eight years. The 60-year-old economist, tapped in 2006 as the top economic forecaster by Arizona State University's W.P. Carey School of Business, has spent a good deal of that time trying to warn anybody who would listen about such things as excessive household debt while taking a jab or two (or three) at then-Federal Reserve Chairman Alan Greenspan. "Illusory" is how, in October 2004, Kasriel described the wealth created by Greenspan's interest-rate cuts in one of his edgy and somewhat irregular reports dubbed, "The Econtrarian," which are available on Northern Trust's Web site. A few months later, as household spending continued to sizzle, he wrote, "Today's 'partying' in terms of a disproportionate share of national output being 'consumed' by the household sector is a recipe for a 'hangover' tomorrow." And in case you are wondering whether Kasriel has any regrets about having provided less-than-rosy outlooks that challenged conventional wisdom while others were celebrating record home sales and soaring stock prices he doesn't. "I look at the numbers and I have a sense of history," he says, as the sound of wind causes his voice to fade in and out during a telephone interview while he was on a sailboat on Lake Michigan, where he spent this past week. Sailing on that lake, known for its unpredictable conditions, is an appropriate hobby for an economist like Kasriel. He believes sailing makes him a better forecaster. And as a forecaster, he is concerned more than ever about the economy, which he believes could be headed toward a "painful" recession.
(Excerpt) Read more at marketwatch.com ...
Greenberg is a good read.
This guy is bearish all the time. And in a cylindrical market that means every once in a while he looks kind of ‘right’, although his doom and gloom is still over the top. Predicting a fall in 2004 and it doesn’t happen until late 2006/early 2007 is hardly being a great forecaster.
If you play you will eventually have to pay. The looks of the market are that we all need to have out checkbooks handy.
Hey gloom and doom Paul Kasriel...whats the opposite of “Above Me!”
Democrats=doom
bump
The market trends up across time due to productivity increases, population growth, efficiency through free trade and outsourcing, new technologies and products, and the like. A bear predicts against the overall “natural” trend of the market. It’s hard to time a bear market, but I think overall, there are some real problems with government and consumer debt, ponzi scheme social programs and the like that frighten me. Will the drop be this year? Next? 5 years from now? Will we muddle through somehow and get ontrack for the long term? Hey . . . I’m asking the questions, not answering them.
“Americans living beyond their means”
And this is news - how?
There have ALWAYS been a certain minority of Americans who have lived their lives “beyond their means”. That is why inflation has become part of our economic foundations.
“A dollar today is worth more than a dollar tomorrow” is an economic dictum built into the system, and presupposes the extension of credit, with interest being paid on that credit line. No matter what the economic climate at any given time, there is ALWAYS credit being extended by someone, to another, to enable the transfer of ownership. There are various legal interpretations of what this obligation to pay may involve, but these are mostly encoded in the law, or if not, are usually enforced at the discretion of the person doing the lending (think Mafioso tactics for collections and “protection”).
Eventually the “living beyond means” results in the past catching up, either by the growth into the means by increasing net income, or by busting out through bankruptcy. Either one means that some discipline in spending/earning was enforced, whether by the self or by an external agency. Today’s expensive dollars are paid off with tomorrow’s cheap dollars (plus accrued interest).
Permanent inflation has only been with us since around the WWII time period. The FOMC was created in 1936.
This is new and can be changed????
And, if you interview two economists, you'll get five opinions.
We are one long boom-and-bust cycle economy.
Never having heard of a single ‘economist’ thats a self made millionaire, I read this stuff with quite a bit of amusement.
I am an engineering type, to me the glass is twice the size it needs to be to do it’s task. ;)
Lord Keynes was a very successful investor. Not sure if he made his initial capital himself, but he was a good speculator supposedly. Milton Friedman was a millionaire mainly through the sales of his books. Allen Greenspan was a millionaire from his consulting business before he even entered government service. It’s actually harder to find a prominent economist that isn’t a millionaire than one that is.
“There have ALWAYS been a certain minority of Americans who have lived their lives “beyond their means”. That is why inflation has become part of our economic foundations.”
The difference now, though is that the taxpayers are expected to bail out the mortgage companies.
It’s actually harder to find a prominent economist that isn’t a millionaire than one that is.
Not ‘self made’.
Ave credit card debt was $8,000 when Bush was elected. Now it is down to $4000.
And..., in other breaking news..., the sun rose this morning!
The central problem is that the NUMBER of Americans living beyond their means has greatly increased since, in many of these folks memories..., credit has always been cheap and you are "entitled" to everything you want whether or not you have the funds to pay for it!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.