Interesting parallels between the cost of shipping dry goods, and the prices of those goods themselves. The caveat is the past 2 years have been somewhat aberrational, and we would need to see much longer history:
Courtesy: Barry Ritholtz
Hat tip Bill King
Tags: Baltic Dry Freight Index, Baltic Dry Index, Barry Ritholtz, Bill King, Caveat, Commodities, Commodity Index, Dry Freight, Dry Goods, Hat Tip, Leads, Parallels
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“As long as the Fed is going to make money free … it’s hard to find a short,” said blogger and FusionIQ CEO Barry Ritholtz. According to Yahoo Finance - Tech Ticker, he is not as bullish as he was last March when he called the market bottom, but Ritholtz is sticking with stocks. “The easy thing to do now would be to go to cash,” he said, “[But] I rarely find the easy trade is the one that makes you money.”
Ritholtz is now favoring emerging markets that will withstand a weak US economy, including the likes of South Korea, Brazil, Taiwan and Singapore.
Source: Yahoo Finance - Tech Ticker, February 25, 2010.
Tags: Barry Ritholtz, Blogger, Brazil, Ceo, Economy, Emerging Markets, Market Bottom, Money, Singapore, South Korea, Stocks, Taiwan, Yahoo, Yahoo Finance
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This article is a guest contribution from Barry Ritholtz, or the BigPicture.
Yesterday’s WSJ had an article about Canada’s Housing market. (Housing Rebound in Canada Spurs Talk of a New Bubble). The article noted that “Average home prices in Canada have risen 23% from their trough in January 2009. Home-sales volumes are up 70% over the same period . . . Canada’s housing recovery has been so rapid that some here are worrying about a bubble.”
But to call it a rebound misses the point. As the Cleveland Fed pointed out, Canada’s housing market never went bust — there was a sales dip, but nothing like the US. And prices have continued to go higher to the point where the Journal is now discussing them in terms of bubbliciousness.
Why is that?
There are a variety of reasons why Canada’s market held up better than that in the US, but I boil it down to the big four:
1) Lending Standards: Were increasingly non-existent in the US from 2001-07. On the other hand, Canada never had the non-bank lenders that abdicated these standards en masse. There was no “Lend-to-Securitize” business model in Canada.
2) Mortgage Insurance: Mortgage with less than 20% down payment are considered a high LTV ratio (This was 25% previously). Mortgage insurance is required. Over 80% of Canada’s homes have what was commonly known as PMI in the US.
3) Full Recourse Mortgages — you can walk away from the house, but not the mortgage debt. Makes quite a difference in the way borrowers behave.
4) Single Regulator, Lack of Regulatory Capture: The hodge podge of Federal and State regulators encourages forum shopping; it also masks much of the massive lobbying effort by US banks and investment houses. Lobbying dollars don’t seem to be nearly as pernicous or corrupting Noprth of the border.
The Cleveland Fed also noted that subprime mortgages accounted for a fifth of all US mortgages originated between 2004–2006. In Canada, the subprime market share was roughly 5% percent in 2006—compared to 22% percent in the U.S. And the Canadian never expanded significantly into the wackier exotic mortgage products — IOs, Neg Ams, Piggy Backs, etc. (interest-only and negative-amortizations grew rapidly in the U.S. from 2003 to 2006).
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Sources:
Housing Rebound in Canada Spurs Talk of a New Bubble
PHRED DVORAK
WSJ, Feb 8, 2010
http://online.wsj.com/article/SB10001424052748703808904575025100730017666.html
Why Didn’t Canada’s Housing Market Go Bust?
James MacGee
The Federal Reserve Bank of Cleveland 12.02.09
http://www.clevelandfed.org/research/commentary/2009/0909.cfm
What Toronto can teach New York and London
Chrystia Freeland
FT, January 29 2010
http://www.ft.com/cms/s/2/db2b340a-0a1b-11df-8b23-00144feabdc0.html
Additional Sources:
Nobody’s saviour
TARA PERKINS
The Globe and Mail, Apr. 20, 2009
http://www.theglobeandmail.com/report-on-business/article1138040.ece
Homeownership Rate Falls Back to Pre-Boom Level (Economix)
http://economix.blogs.nytimes.com/2010/02/02/homeownership-rate-falls-back-to-pre-boom-level/
Jumbo Mortgage ‘Serious Delinquencies’ Rise to 9.6%
Jody Shenn
Bloomberg, Feb. 8 2010
http://www.bloomberg.com/apps/news?pid=20601110&sid=at0fpRHaUHhE
Tags: Bank Lenders, Barry Ritholtz, Borrowers, Canada, Canada 2, Cleveland Fed, Hodge Podge, Housing Bubble, Housing Market, Insurance Mortgage, Investment Houses, Ltv Ratio, Mortgage Debt, Mortgage Insurance, oil, Pmi, Recourse, S Market, State Regulators, Subprime Market, Subprime Mortgages, Wsj
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“The market’s bias is still to the upside. We’re giving the rally the benefit of the doubt. Innocent until proven guilty,” said Barry Ritholtz, CEO of Fusion IQ in an interview on Yahoo Finance - Tech Ticker.
Ritholtz expects the market to continue to go higher in the first part of 2010, suggesting 1,250-1,300 as an upside target for the S&P 500, but still thinks we are in a cyclical (short-term) bull market within a secular (long-term) bear market, which began in 2000.
“The goal from now until let’s call it 2015 is to preserve capital - see if you can make a little money here or there - but be ready for the next 15-to-20 year bull market,” he said.
Source: Yahoo Finance - Tech Ticker, December 18, 2009.
Tags: Amp, Barry Ritholtz, Bear Market, Benefit Of The Doubt, Bias, Bull Market, Ceo, Fusion, Innocent, Iq, Money, Rally, Stocks, Target, Ticker, Yahoo, Yahoo Finance
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Barry Ritholtz shares an interesting note on the rally in the dollar. The MACD has turned up and crossed over, signalling that traders and U.S. dollar carry-traders are nervous about their short positions in the dollar. With the Japan-easing underway, its possible that during the course of the year, the yen will replace the dollar as the primary funding currency. Time to bet on a return of volatility in risk assets.
On another note, the Canadian dollar is set to weaken relative to the greenback, should the rally in the dollar gain traction.
We know that “Short the US Dollar” has been a crowded trade for some time now. And, after falling 41% from 2001 to 2008, the fat part of the collapse has already happened.
Will it continue? That’s what today’s chart looks at.
How likely is it that the rest of the world will stand idly by and allow: a) US manufacturing competitiveness a huge advantage via weak currency?; 2) Massive US debt to be inflated away through dollar weakness?
Quite possibly not, as other currencies engage in a race to the bottom. The chart below suggests a dollar rally is in the offing:
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Courtesy of Ron Griess of The Chart Store
Adam Hewison strikes again with the ten-thousand-foot-view of the market with three new technical analysis videos on the Dollar Index (DXY), Crude Oil, Gold - These are relevant analyses given that crude and gold are both priced in US dollars:
The above chart is Adam showing the declining trend of the US Dollar Index along with the positive (standard) MACD Divergence… and the recent positive trendline break. As such, his video is entitled:
“Has the US Dollar Index Bottomed Out?”
Adam then moves to the Crude Oil market in his video:
“Crude Oil: Lower Levels Ahead?”
Hewison writes:
“The crude oil market continues to soften and is now close to some important levels that I think we should look at. In my new video we look at what is happening in this market right now and what we expect to happen in the future.
As we have indicated in our earlier posts, we are now in the official “silly season” for trading. What I mean by that is the markets will be very thin, choppy and can be moved by a relatively small amount of money.”
Finally, Adam posts a quick 3-min update on Gold strangely titled:
“It’s Officially Silly Season for Gold.”
We are already in the “silly season” and what I mean by that is after December 15 most traders are not serious about the markets and they’re not committed to any large positions for the balance of the year.
As you will see in the video, gold has fallen back to an area that should provide support, however it will remain choppy and thinly traded for the balance of the year.”
Source: Barry Ritholtz, The Big Picture
Tags: Assets, Barry Ritholtz, Barry Ritholtz The Big Picture, Bet, Canada, Canadian Dollar, Collapse, Competitiveness, Crude Oil Market, Currencies, Currency, Dollar Gain, Dollar Index, Dollar Weakness, Foot View, Gain Traction, Gold, Greenback, Griess, Japan, Macd, Macd Divergence, oil, Race To The Bottom, Rally, Relevant Analysis, Rest Of The World, risk, Shares, Ten Thousand, US Dollar, Us Dollar Index, Volatility, Yen, Yen Dollar
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Barry Ritholtz, author of Bailout Nation and chief executive of investment manager Fusion IQ, delivered the keynote address at the Citywire Fund Selector Forum in Berlin a few days ago. The highlights from his speech are below.
Part one: How the actions of the Federal Reserve changed everything in 2002-2007
Part two: Eight months after Armageddon seemed upon us, the US economy shows signs of life.
Part three: Where next for stock markets?
Source: Barry Ritholtz, Citywire, November 30, 2009.
Tags: Advertisement, Armageddon, Bailout, Barry Ritholtz, Berlin, Chief Executive, Citywire, Economy, Eight Months, Federal Reserve, Few Days, Fund Selector, Fusion, Investment Manager, Investment World, Iq, Keynote Address, Signs Of Life, Stock Markets
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Barry Ritholtz, writer of The Big Picture blog and author of Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy, last week addressed delegates at a CityWire event in Berlin.
According to CityWire, he argued that we were in a secular bear market that began in 2000 and has some years to run. “In secular bear markets, the buy-and-hold approach to investing is a ‘disaster’, he says, citing the experience of 1966-82 in which the Dow Jones Industrial Average went through five strong rallies and ended up back where it started. It’s not all bad news - the current cyclical rally has a few months yet to go with up to 20% upside, based on historical patterns - but will be tough going, Ritholtz warns,” reported the website.
In part two of the interview Ritholtz discusses the state of the US economy, why the US government should have let the banks collapse, and why inflationary fears are misplaced.
Source: Richard Lander, CityWire, November 24, 2009.
Tags: Bad News, Bailout, Barry Ritholtz, Bear Markets, Big Picture, Citywire, Collapse, Delegates, Dow Jones, Dow Jones Industrial, Dow Jones Industrial Average, Easy Money, Event In Berlin, Greed, Rallies, Richard Lander, Secular Bear Market, Us Government, Wall Street, Website Advertisement, World Economy
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This is a guest post by Barry Ritholtz, editor of The Big Picture Blog and author of the popular book, Bailout Nation.
OK, it’s time for round 2, Shedlock vs. Ritholtz.
You may recall that last time, Mish & I disagreed as to whether this was a recession (Me) or a depression (He). This time, the debate is over the current rally.
On Monday this week on Yahoo Tech Ticker, I discussed that we did not see evidence that the rally was ending (see “Rally May Only Be in 6th or 7th Inning, Ritholtz Says“).
Shedlock pens a response - “Rally in 6th Inning or Top of the 12th?” - and discusses the reasons he thinks the market rally should be ending soon: “The flip side of the coin is this market has advanced so far, so fast that if downside momentum does develop, there is nothing but air pockets below. Air pockets are thus a two-way street. If anything, there is far more air below than above.”
That may be. However, none of the various metrics we track suggest the rally is about to run out of gas anytime soon. That doesn’t mean it can’t end to tomorrow, but we would rather play the high probability, rather than low probability outcomes.
Here are the four most important reasons why I think we can have more upside, plus a look at some grim economic realty.
1) Individual investors remain under-invested.
2) Market breadth and momentum are each positive (i.e. supportive of further upside).
3) Sentiment has not yet reached extreme levels.
4) The broader investment community believes - incorrectly in my opinion - that a recovery is upon us, profits are getting better.
5) History shows that secular bear markets have deep selloffs and huge rallies; this current rally still has room to run based upon a composite of prior cycles (see “Four Stages of Secular Bear Markets“).
Now, about that economy. Here is my dirty little secret. FOR TWO THIRDS OF THE TIME, THE ECONOMY REALLY DOES NOT MATTER.
I know that sounds insane, but consider the following: In the middle of secular bull markets, economic info seems to have the greatest correlation with market performance. Good data, more profits, better market action.
At market tops, the economy looks great. Valuations are rich, but record profits support the multiple.
Then it all goes to hell.
At bottoms, it looks awful. It looks like these companies will never make another dime, that layoffs won’t ever end, that we can never escape the tar pit.
And then we do.
This must be perplexing, maddening, infuriating to pure economists. But that is Mr.Market’s job - to frustrate the maximum number of players.
Source: Barry Ritholtz, The Big Picture, September 17, 2009.
Tags: Air Pockets, Bailout, Barry Ritholtz, Bear Markets, Big Picture, Dirty Little Secret, Downside, Extreme Levels, Flip Side, Individual Investors, Investment Community, Market Breadth, Market Rally, Metrics, Momentum, Nothing But Air, Probability, Rallies, Recession, Selloffs
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TrimTabs Investment Research reports that the pace of insider selling is now 30.6X that of insider buying the highest levels since they began reporting this data in 2004, to $6.1-billion, the highest amount since May 2008.
“The best-informed market participants are sending a clear signal that the party on Wall Street is going to end soon,” said Charles Biderman, CEO of TrimTabs.
TrimTabs’ data on insider transactions is based on daily filings of Form 4, which corporate officers, directors, and major holders are required to file with the Securities and Exchange Commission.
In a research note, TrimTabs explained that insider activity is not the only sign the rally is about to end. The TrimTabs Demand Index, which tracks 18 fund flow and sentiment indicators, has turned very bearish for the first time since March.
For example, short interest on NYSE stocks plummeted by 10.3% in the second half of July and margin debt on all US listed stocks spiked 5.9% in July, while 51.6% of advisors surveyed by Investors Intelligence are bullish, the highest level since December 2007.
“When corporate insiders are bailing, the shorts are covering and investors are borrowing to buy, it generally pays to be a seller rather than a buyer of stock,” said Biderman.
TrimTabs also reports that the actions of U.S. public companies have been bearish. In the past four months, companies have been net sellers of a record $105.2 billion in shares
In the last week, we published the counter-opinons of Laszlo Birinyi, and Barry Ritholtz (Merrill Lynch Fund Managers’ Survey, in Rally May Last Longer Than You Believe.
Birinyi says the recovery in the economy and earnings could far exceed expectations, and the market is pricing in the upside surprise.
“The markets are suggesting that the economy has turned the corner and is going to do a lot better than most people anticipate,” Birinyi, the founder of Westport, Connecticut- based research and money-management firm Birinyi Associates Inc., said today in an interview broadcast on Bloomberg Radio and Television. “I’m still very optimistic.”
Ritholtz pointed out that according to the Merrill Lynch Fund Managers’ Survey, professionals and fund managers have been buying this rally in a big way, and that may mean the market has a farther distance to run right now.
Investor optimism about the global economy has soared to its highest level in nearly six years, with portfolio managers putting their cash back into equity markets, according to the Merrill Lynch Survey of Fund Managers for August.
A net 75% of survey respondents believe the world economy will strengthen in the coming 12 months, the highest reading since November 2003 and up from 63% in July.
Confidence about corporate health is at its highest since January 2004. A net 70% of the panel respondents expect global corporate profits to rise in the coming year, up from 51% last month.
August’s survey shows that investors are matching their sentiment with action, by putting cash to work. Average cash balances have fallen to 3.5% from 4.7% in July, their lowest level since July 2007.
Bespoke pointed out that Short Interest has dropped to multi-year lows, and that pros are more optimistic than individual investors, in Pro Investors More Bullish than Individuals.
According to this week’s survey of the American Association of the Individual Investors (AAII), only 1/3 of investors surveyed are currently bullish, while nearly half (49%) are bearish.
Bottom Line: Insiders are bearish or taking advantage of better prices in the market to sell their stakes, Pros are bullish.
Individuals are somewhere in between, not as bearish as insiders and not as bullish as pros.
Tags: Barry Ritholtz, Birinyi Associates, Corporate Insiders, Daily Filings, Demand Index, Insider Activity, Insider Transactions, Investment Research Reports, Investors Intelligence, Laszlo Birinyi, Margin Debt, Market Participants, Merrill Lynch, Money Management Firm, Nyse Stocks, Opinons, Securities And Exchange Commission, Sentiment Indicators, Trimtabs, Upside Surprise, Westport Connecticut
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With the market up over 50% since March lows, many are calling for a 10%+ pullback and advising caution. It may be a good time indeed to take some money off the table.
Others, though, like Laszlo Birinyi, founder, Birinyi Associates, and Barry Ritholtz, CEO, FusionIQ, and prolific author of The Big Picture blog, believe that the market has the capacity to surprise.
Birinyi says the recovery in the economy and earnings could far exceed expectations, and the market is pricing in the upside surprise.
Birinyi Says Stocks Rally Signals Economic Rebound, August 24, 2009, Bloomberg.com
Birinyi said on May 20 that the S&P 500 would climb to a record 1,700 in the next two or three years, a 66 percent gain from its current level. The index has rallied 14 percent since his forecast. The benchmark for U.S. stocks may rise 6 percent to 1,087 within the next three months “if it continues to progress at the rate it’s been progressing,” he said
Waiting for Economy Roubini Can Believe In Means Missing Rally, August 26, 2009, Bloomberg.com
“We’re looking at a bull cycle in phase one,” Laszlo Birinyi said in a telephone interview yesterday. Birinyi was the top-ranked Dow Jones Industrial Average forecaster for most of the 1990s on PBS’s “Wall Street Week with Louis Rukeyser.” “No one wants to come out and say, ‘This is a bull market.’ Everyone’s just dancing around the term,” he said.
Barry Ritholtz says the market has the strength and capacity to surprise us higher, now that fund managers are buying this rally, according to the Merrill Lynch Survey of Fund Managers:
“Professional money managers are buying into the rally in a big way, according to a Merrill Lynch Survey of Fund Managers:
• 75% believe the world economy will improve in the next 12 months. That’s the highest level in nearly six years and up from 63% in July.
• Average cash balances have fallen to 3.5%, the lowest since July 2007.
• 34% of managers surveyed are now overweight stocks, the highest since Oct. 2007.
• Risk appetite is also increasing, to the highest levels in two years.
Reuters: August 19, 2009 - Merrill Lynch Fund Manager Survey Finds Economic Optimism Highest Since 2003 as Investors…
Investor optimism about the global economy has soared to its highest level in nearly six years, with portfolio managers putting their cash back into equity markets, according to the Merrill Lynch Survey of Fund Managers for August.
A net 75% of survey respondents believe the world economy will strengthen in the coming 12 months, the highest reading since November 2003 and up from 63% in July.
Confidence about corporate health is at its highest since January 2004. A net 70% of the panel respondents expect global corporate profits to rise in the coming year, up from 51% last month.
August’s survey shows that investors are matching their sentiment with action, by putting cash to work. Average cash balances have fallen to 3.5% from 4.7% in July, their lowest level since July 2007.
Equity allocations have risen sharply month-over-month with a net 34% of respondents overweight the asset class, up from a net 7% in July. Merrill Lynch’s Risk and Liquidity Indicator, a measure of risk appetite, has risen to 41, the highest in two years.
“Strong optimism in August represents a big turnaround from the apocalyptic bearishness of March. And yet with four out of five investors predicting below trend growth for the year ahead, a nagging lack of conviction about the durability of the recovery remains,” said Michael Hartnett, chief global equities strategist at Banc of America Securities-Merrill Lynch Research. “The equity rally has been narrowly led by China and tech stocks. We have yet to see investors fully embrace cyclical regions such as Japan or Europe, or Western bank stocks.”
Tags: Barry Ritholtz, Birinyi Associates, Cash Balances, Dow Jones, Economic Rebound, ETF, Forecaster, Fund Managers, Laszlo Birinyi, Lows, Merrill Lynch, Phase One, Professional Money Managers, Prolific Author, Pullback, Roubini, Telephone Interview, Upside Surprise, Wall Street Week, Wall Street Week With Louis Rukeyser, World Economy
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Barry Ritholtz, CEO of FusionIQ, reminds us that in 1973-74, the market fell 44%, then rallied 78%. He says he is not calling the forecast this time that tightly, but says that before this is all over, the market which is up over 50% currently, may see 60, 70, or 80% before topping out.
The melt-up in the market has caused professional investors a great deal of performance angst over whether or not to re-enter the market more willfully, given the underlying concerns about the economy’s recovery and sustainability of earnings forecasts. Ritholtz says that fund managers are buying the rally, and this is reason to believe the market melt-up can extend higher.
“After starting the week with a big knock, the stock market has resumed its rallying ways, with the Dow closing above 9300 on Thursday while the S&P again surpassed the 1000 level.
“Professional money managers are buying into the rally in a big way, according to a Merrill Lynch Survey of Fund Managers:
• 75% believe the world economy will improve in the next 12 months. That’s the highest level in nearly six years and up from 63% in July.
• Average cash balances have fallen to 3.5%, the lowest since July 2007.
• 34% of managers surveyed are now overweight stocks, the highest since Oct. 2007.
• Risk appetite is also increasing, to the highest levels in two years.“The contrarian in you probably thinks that signals a market top. But Barry Ritholtz, CEO of FusionIQ and author of Bailout Nation, isn’t ready to call an end to the move. ‘We’ve worked off lots of that oversold condition,’ he admits, but that doesn’t mean the rally can’t continue for some time.
“Ritholtz, who told Tech Ticker in early March we were in for a monster rally, has 1,050-1,080 as an upside target for the S&P 500, with a slight chance it can go as high as 1,200. If the rally does extend to those outer limits, Ritholtz sees the Dow topping out ’somewhere around 12,000′.
“Regardless of your position, long or short, Ritholtz’s key message is to remain cautious. ‘This is a trading rally not a multi-year rally,’ he says. Eventually something’s got to give: ‘We’ve never had six-month period before where we’ve lost two million jobs and the market’s gained 50%,’ he says. ‘That’s simply unprecedented.’”
Source: Yahoo Finance, Tech Ticker, August 21, 2009.
(h/t: Investment Postcards From Cape Town)
Tags: 12 Months, Amp, Anxiety, August 21, Bailout, Barry Ritholtz, Cash Balances, Dow, Earnings Forecasts, Fund Managers, Market Rally, Merrill Lynch, Monster Rally, Outer Limits, Performance Anxiety, Professional Investors, Professional Money Managers, Risk Appetite, Signals, Six Years, Stock Market, Sustainability, Target, Two Million, Vector, World Economy, Yahoo Finance
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This is a guest post by Barry Ritholtz, editor of The Big Picture Blog and author of the newly released book, Bailout Nation
One of the more fascinating things about a crisis and its resolution is the post-mortems: The after-the-fact analyses that some folks do to explain what occurred.
These analyses are fascinating for what they reveal about the beliefs, methodologies, biases and cognitive failures of the many crisis watchers.
Human fallibility being what it is, we can divide this universe into 3 buckets of observers:
(1) Those who get it mostly wrong.
(2) Those who can correctly describe a small slice of what happened.
(3) Those who understand the full boom and bust - how all the moving parts came together to cause the crisis.
The first bucket is the easiest to both understand and dismiss: It contains the ideologues and market worshipers, as well as the perma-bulls - none of whom have much in the way of methodology. They are believers who know that in the long run stocks (and houses for that matter) will come back, whether we are dead or not. For the most part, they missed all of the warning signs of recession, credit crisis and boom and bust of the housing collapse. They called it a “mental recession”.
This motley crew says it was all the fault of too much regulation, no it was CRA/Fannie Mae - Why do we even have a Fed? That was the cause - No its mortgage interest deduction - No its all Barney Frank’s fault, no wait, it was caused by too much minority home buying - No, it goes back to FDR - No, its all the Government’s fault, there should be no State - All hail John Galt, we should be free without any government intervention whatsoever - Bababooey!
As you might imagine, their ravings throw off a lot more heat than light. They provide no insight into the what actually occurred - But hey, its great theater.
The second group is a lot more instructive and interesting. They accurately detail a tiny aspect of the crisis in great detail. These observers are like the six blind men describing an elephant: Partly correct, yet mostly incomplete. Their individual descriptions accurately describes various body parts (trunk, tusk, ear, etc.) but they never describe the creature in its entirety.
This group includes those who blame the entire debacle on derivatives or the formula for Value at Risk. The original concept of securitization. Wildly misaligned compensation incentives. They blame the ratings agencies and/or the deification of markets via EMH [efficient market hypothesis], or the massive increase in use of credit since the 1950s. Some blame allowing Lehman to fail as the cause; others blame bailing out Bear Stearns, yet still others say it was all Goldman Sach’s fault. Fill in your own blank.
In the hunt for the unified field theory of the economic crisis, these observers may accurately describe a single aspect of what happened, but they fail to capture the fullness of what caused the debacle. They miss the crisis’ gestalt.
Lastly, we have the Big Picture observers (no pun intended). These folks try to put all of the moving pieces together. They look for proximate causes, not abstract theories. They try to see how one event led to the next event and the next and so on down the entire cascading collapse. These folks understand complexity, causation, risk, statistics and cycles. They are pragmatic, not ideological.
They are unfortunately, all too rare.
I only can wish that more of the people trying to repair what happened, and prevent the next crisis, were in the third group ….
Source: Barry Ritholtz, The Big Picture, July 30, 2009.
Tags: Bailout, Barney Frank, Barry Ritholtz, Biases, Boom And Bust, Buckets, Cra, Credit Crisis, Fannie Mae, Fdr, Government Intervention, Hail John, John Galt, Mortgage Interest Deduction, Motley Crew, Moving Parts, Post Mortems, Second Group, Warning Signs, Worshipers
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Anything in any way beautiful derives its beauty from itself and asks nothing beyond itself. Praise is no part of it, for nothing is made worse or better by praise.
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