Thursday, February 3, 2011

More Crazy Talk from Andy Xie!

February 1, 2011
Embarrassment of riches

Is the prosperity a mirage?

The surge in income inequality has skewered economic growth toward expenditures by the affluent.

The global economy is sliding into stagflation.

Prolonged negative real interest rates always lead to financial crisis.

These are the rantings of a madman.

How can anyone possibly think that the prosperity is a mirage? Had it not been out of morbid curiosity, I would have stopped reading right there. He's clearly a nutcase.

2005

Morgan Stanley economist Andy Xie believes a global housing crash is a serious possibility.

2007

"I think it's going to be bust very soon," Xie said, adding that a combination of excess liquidity, rising inflation and rich valuations would result in a global crash soon.

"People will be surprised. When the end comes, it's going to be pretty bad," Xie added.


Crazy talk!



Sarcasm is the language of the devil, for which reason I have long since as good as renounced it. - Thomas Carlyle

10 comments:

getyourselfconnected said...

Too much cash chasing too few items, but not wage growth...perhaps the greatest enslavment system ever.

We do it right in america.

And stop using the CPI, man that was a construct by the gov for the gov so come on.

Zarathustra said...

Rich folks have investments in real and financial assets. The Fed prints loads of money, making those assets values rising. At the same time, workers' wages are not rising enough. Right, GDP is rising, but the lower class can't feel the prosperity.

That happens everywhere.

Also sprach Analyst

MaxedOutMama said...

Well, Andy Xie focuses on more than the US.

The implications of the current dynamic for China are rather rough for their workers.

We've had exposure to the unrest in the ME, but in China and India, inflation has cut real incomes for a huge percentage of the population.

Jazzbumpa said...

I'll not thrilled with the CPI. What inflation measure do you prefer?

Stagflationary Mark said...

GYSC & Jazzbumpa,

The CPI matches my expenses fairly well so I'm fine using it. I certainly write about it enough.

The Sarcasm Report v.33

CPI vs. GDP Deflator

Doom and Gloom, Inflation Thoughts

Stagflationary Mark said...

MaxedOutMama,

I was going to post a response to your "Technically Graphing" post.

I had a comment prepared but after reading what I wrote I decided the following might be better, lol.

Better to keep your mouth closed and be thought a fool than to open it and remove all doubt.

That said, I do think that ZIRP is ultimately more deflationary than most would think.

mab said...

Stag,

Speaking of crazy talk, I watched the CNBC coverage of the employment report this morning. It's unbelievable the lengths these shills will go to spin the data. All the usual moronic suspects were there - Diane Swonk, Mark Zandi, David Malpass.

At one point, they were cheering the fact that Government payrolls were shrinking while private payrolls were growing. That sounds like a good thing until one CONsiders that Gubbmit jobs likely pay better and have better benefits. Apparently, lower paying jobs are just what this eCONomy needs to prevent debt deflation! Our eCONomic experts are cheering the race to the bottom - it's mindboggling. My forehead took some serious damage.

As long as Bernanke protects and promotes extractive finance, fraud and rentierism, Main St. will suffer. Seriously, why take a risk on a productive endeavor when financial tomfoolery is a "sure thing"?

Stagflationary Mark said...

mab,

"At one point, they were cheering the fact that Government payrolls were shrinking while private payrolls were growing."

I hear you. Perhaps they've been cheering for the past 60 years and just don't know how to stop?

Check this chart out. It's on a log chart so that constant growth is seen as a straight line.

Charles Kiting said...

We've had exposure to the unrest in the ME, but in China and India, inflation has cut real incomes for a huge percentage of the population.

But they are making up for it with easy credit.

Sounds familiar, don't it?

Stagflationary Mark said...

Charles Kiting,

China and India have spectacular exposure to the boom in raw commodity prices.

And easy credit too?

Pure bliss (sarcasm!).