Sunday, January 29, 2012

Nobody Expects a Goat Rodeo

January 30, 2012
Hussman Funds - Weekly Market Commentary

Given the strong and rather obvious relationship between the most recent year-over-year rate of GDP growth and the prospect of oncoming recession, it's difficult to understand why Wall Street so completely rejects the likelihood of an economic downturn. Then again, that's exactly why we're expecting a Goat Rodeo.


Stagflationary Mark said...

Urban Dictionary: Goat Rodeo

mab said...

Nobody expected this either:

Buffett parties with Jay_Z!

Troy said...

2H08 didn't surprise me at all (though 1Q09 did).

My crystal ball is a lot cloudier now.

I think chances of a massive discontinuity-creating intervention happening 2013-2016 is non-zero (exactly what they did 2001-2003, actually, cut taxes a lot and inflate inflate inflate).

But my thesis has to explain why the ten year is at 1.84% right now.

One inflationary lever they may pull is printing money to pay SSA retirees (over what they collect in FICA), instead of raising income taxes to redeem the SSTF directly from Treasury funds. They're already printing the bonds to cover the 2% payroll tax cut, so this is inflationary in its own way (~$100B/yr) money-add).

There's a lot of clever things the system could do still.

The best thesis is getting a doomstead somewhere and leading a cash life, off the grid as much as practicable.

Stagflationary Mark said...


We're going to party like its still 1999!

Stagflationary Mark said...

Ack! Like it's still 1999!

Stagflationary Mark said...


My crystal ball is a lot cloudier now.

If mine was crystal clear and I was prone to gambling then I wouldn't still be buying 0% I bonds. I'd be making heavily leveraged bets instead.

Of course, heavily leveraged bets sort of got us into this mess in the first place. Sigh.