# Move over S Roach, There's a new bear in town



## wayneL (18 September 2006)

...and his name is Peter Schiff.

They even let him loose on Bubblevision:

http://www.europac.net/media/Schiff-Bloomberg-9-8-06_lg.wmv

"we are living in a very inflationary time period"

"House Price gains of last 5/6 years erased"

"Mortgage debt will NOT be erased, in fact it will be increased because of negative amortization "

"Mortgage debt leading to US Recession that will last for years"

"Higher interest rates, making mortgage debt harder to finance"

"US Recession likely to start next year"

"US economy not growing, only consumption/debt increasing"

"Once equity vanishes, consumption is going to fall of a cliff"

"large job losses because of consumption fall"

"unemployment rate is going to move up dramatically as the real estate market declines next year"

...and again... a televised debate with one the Wall St permabulls. This was marred by the permabull's smiling and mocking style; a thouroughly detestable style of arguement and usually a syptom of fear  

http://www.europac.net/Schiff-CNBC-8-28-06_lg.asp

"whether or not recession is in 2007/08 is immaterial it will last for years"

"economy suffering from disease is debt financed consumption, cure is recession"

"phoney wealth of housing market"

"30% of employment due to housing boom"

"artificially low IRs will very quickly become a thing of the past"

"average american going deeper and deeper into debt"

Believers in the China/commodity stronger for longer theary will enjoy. Though he does not mention Oz, the resources sector will be winners according to his scenario.


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## wayneL (18 September 2006)

A response on Schiff's website re issues raised in the televised debate:



> In my most recent appearance on CNBC I debated Arthur Laffer, who gained fame during the Reagan administration for sketching his controversial "Laffer Curve" on a cocktail napkin. The encounter reaffirmed my belief that the same napkin would probably be large enough to hold the sum total of his economic wisdom.
> 
> In the pointed debate, the impeccably genial Mr. Laffer claimed that the U.S. economy has never been healthier, was not dependant on housing, and will be unfazed by higher interest rates. He described current monetary policy as "spectacular", declared wealth had risen dramatically, asserted our trade policy was working “beautifully,” attributed our trade deficit to foreigners outsourcing their monetary policy to America, and claimed that history had shown that such external deficits were not harmful.
> 
> ...


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## Realist (18 September 2006)

AS you know I am very skeptical on predictions.

But most of what he says seems right to me..


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## swingstar (18 September 2006)

I've been following this guy for a while. I'm downloading the clip now, but I think I've seen it (and in fact I think I even posted it here a few weeks ago).

Edit: Nope, diff clip. He was on Bloomberg about a month ago as well, but this interview is a lot longer.


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## wayneL (18 September 2006)

swingstar said:
			
		

> I've been following this guy for a while. I'm downloading the clip now, but I think I've seen it (and in fact I think I even posted it here a few weeks ago).
> 
> Edit: Nope, diff clip. He was on Bloomberg about a month ago as well, but this interview is a lot longer.




He's my new poster boy  

...and he's not quite as ugly as Stephen LOL


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## wayneL (18 September 2006)

wayneL said:
			
		

> He's my new poster boy
> 
> ...and he's not quite as ugly as Stephen LOL


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## juddy (18 September 2006)

wayneL said:
			
		

> Believers in the China/commodity stronger for longer theary will enjoy. Though he does not mention Oz, the resources sector will be winners according to his scenario




He makes the shift from the drop in US consumption to the increase in Chinese domestic consumption sound like a smooth transition. IMO there'll be quite a large time gap in between that drop-off shock and the Chinese take-up. At least two-three years sounds like a reasonable time frame for this to happen.


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## wayneL (18 September 2006)

juddy said:
			
		

> He makes the shift from the drop in US consumption to the increase in Chinese domestic consumption sound like a smooth transition. IMO there'll be quite a large time gap in between that drop-off shock and the Chinese take-up. At least two-three years sounds like a reasonable time frame for this to happen.




My thoughts exactly... except I think a bit longer FWIW. Surely the Chinese "middle class" will feel the heat from a drop in US consumption; and a resulting recession of there own.


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## juddy (18 September 2006)

wayneL said:
			
		

> My thoughts exactly... except I think a bit longer FWIW. Surely the Chinese "middle class" will feel the heat from a drop in US consumption; and a resulting recession of there own.




and the inevitable ripple effect to our economy hanging on to growth by that single resources thread.


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## michael_selway (18 September 2006)

wayneL said:
			
		

>




lol have u got a picture of stephen?

thx

MS


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## wayneL (18 September 2006)

michael_selway said:
			
		

> lol have u got a picture of stephen?
> 
> thx
> 
> MS




 

​
I only liked him for his mind Ahahahaha


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## michael_selway (18 September 2006)

wayneL said:
			
		

> ​
> I only liked him for his mind Ahahahaha




haha thx

Btw http://www.europac.net/media/Schiff-Bloomberg-9-8-06_lg.wmv

thats a very good interview/video

covers everything in a nutshell, about world markets

He talked about, USD, US Debt, Chinese Dollar, Oil, Gold, SIlver, Basemetals, Realestate, US & Overseas, Recession coming etc

thx

MS


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## BSD (18 September 2006)

To be a devil's advocate in this Bear Party:

The US and Australia have been carrying massive CAD deficits for DECADES. Why is it now going to be a problem?

Private debt from refinancing has been blowing out for years and nothing has happened, but the corporate sector is cashed-up. 

What is more important? Who cares perhaps?

Roach has been consistently wrong. Why is he now going to be right?

The yield curve has been negative for a long time, but we havent seen a slowdown. Should we continue to hang-on to this failed signal?

Growth in industrial production and GDP ex-the US is very strong. Perhaps we dont need to rely on the US for the next decade of growth?

What happens if oil remains steady (or falls) and metals stay steady (or fall) and inflation (it was always cost push remember) falls and Bernanke CUTS RATES - do we have a massive rally?

As for metals, the short selling speculators are all singing from the same song books at the moment, but an oversupply of physical metal is nowhere to be seen. Neither now or in the immediate future. 

The shorts are driving the prices down, but the physical markets remain in deficit and the inventories continue to fall. 

If we were in such a speculative bubble, why isnt spot copper now $2.00 already? 

Because of REAL buying from consumers and not hedge funds, perhaps?

We weren't buying metals of the way up because of the Florida housing story

I wouldnt want to be the punter short 30,000tn of Nickel at the moment. 

You cant cover what you cant buy back and there looks as though there is going to be some sharp hedge fund knobs carried out backwards if this metals market rallies again. 

"He who sells what his'n, must buy it back or go to prisn"

.... or at least close his hedge fund. 


Just another line of thought to consider at the moment.


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## wavepicker (18 September 2006)

Talk about ultra bearish.

Unfortunately for Mr Schiff Gold has continue to tank it, commodities in general continue to fall, the US Dollar is starting to gain upward momentum and looks to be in a new upward multi month trend, and the Dow continues to rise since that September 7 interview. Looks like it was bad timing for a TV interview by Mr Schiff!!!


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## YOUNG_TRADER (18 September 2006)

Wayne, beauty is only skin deep! lol 


On a serious note whats your take on current status of Aus Mkt and whats to come in 6 months, I notice you changed your thing to say "in hibernation" under your nick, care to expand on that?


Regards


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## clowboy (18 September 2006)

Well only half way through the clip but the pro economy guys is all fired up isn't he?

Makes you wonder, I'm always a bit scared when people start campaining that the good times will roll on forever


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## Smurf1976 (18 September 2006)

BSD said:
			
		

> To be a devil's advocate in this Bear Party:
> 
> The US and Australia have been carrying massive CAD deficits for DECADES. Why is it now going to be a problem?



To my understanding the Australian CAD has reached the level (as a % of GDP) where it has been a problem in the past. Remember the "banana republic" in the 1980's?


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## It's Snake Pliskin (19 September 2006)

wayneL said:
			
		

>




Wayne wouldn`t it be funny if you accidentally put your photo on there.


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## wayneL (19 September 2006)

Snake Pliskin said:
			
		

> Wayne wouldn`t it be funny if you accidentally put your photo on there.




oops


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## It's Snake Pliskin (19 September 2006)

wayneL said:
			
		

> oops




Well Wayne that sure is a bad photo. 

How about this:http://images.google.co.jp/imgres?i...q=davros&start=2&sa=X&oi=images&ct=image&cd=2

Do you like Daleks Wayne?


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## It's Snake Pliskin (19 September 2006)

Wayne you might like this one too:
http://www.internetweekly.org/gop_cards/cartoon_dick_cheney_card.html


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## wayneL (19 September 2006)

Snake Pliskin said:
			
		

> Wayne you might like this one too:
> http://www.internetweekly.org/gop_cards/cartoon_dick_cheney_card.html




hahaha Thats a good one


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## wayneL (19 September 2006)

Interesting article in BusinessWeek:



> What's Really Propping Up The Economy?
> 
> *Since 2001, the health-care industry has added 1.7 million jobs. The rest of the private sector? None
> *
> ...


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## It's Snake Pliskin (20 September 2006)

wayneL said:
			
		

> Interesting article in BusinessWeek:




Yes good article there.

America the health economy


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## wayneL (20 September 2006)

Snake Pliskin said:
			
		

> Yes good article there.
> 
> America the health economy




Hehe,

The irony was not lost on me either


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## wayneL (6 October 2006)

More Peter Schiff   

http://www.howestreet.com/goldradio/index.php/mediaplayer?audio_id=412



			
				Peter Schiff - UberBear said:
			
		

> We're not going to have a soft landing, or a hard landing. We're going to have a CRASH landing






			
				P.S. said:
			
		

> "The people who are going to get burnt aren't the ones who bought the real estate, it's the ones who lent them the money..."




LOL


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## tech/a (6 October 2006)

You know since Ive been here around 2 yrs there have always been these Bear threads.Today we have a new high on the DJIA.

Think its better to be a consistant bull.

You know every time I look outside the sky hasent fallen.

All this doom and gloom in the scale of everything it affects a MINORITY.


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## wayneL (6 October 2006)

tech/a said:
			
		

> You know since Ive been here around 2 yrs there have always been these Bear threads.Today we have a new high on the DJIA.
> 
> Think its better to be a consistant bull.
> 
> ...




I wonder if Bernard Baruch would have agreed with you in 1929.


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## BSD (7 October 2006)

Every house will be for sale!!!

How these guys can extralopate the obvious faults of pockets of the property markets and lending practices across the total health of the US economy fascinates me. 

It is like seeing the milkbar down the road going broke and selling you home to buy gold as a result. 


His comments regarding securitisation amaze me. How can he say that buyers of mortgage backed paper aren't cogniscent of the risk? This sort of paper isn't exactly moms and dads preferred investment. 

If there is so much risk in this area, why are spreads on mortgage securities tighter than ever? 

The cheating of no/low docs by punters cannot be too much of a problem when you consider the spreads on sub prime paper are as tight as ever.

The market is looking through the effect of the minority that is gaming the system. 

Does this guy think the world would be better if securitisation was banned and banks had to hold loans on their books?

I would bet my house that such a move (and the subsequent 20% rise in mortgage rates) would lead to a bigger slow down than that caused by Rinker having a few bad quarters. 


It is all very emotionally charged but where are the numbers behind it.

What proportion of people in the United States are going to go bust because they punted real estate? 

If there is a countrywide glut of housing in the USA, why are rents at all time highs? 

I would say there are enormous gluts of property in particular areas, while other markets are more normal.

Securitised debt defaults? AA rated defaults? 

Remember that a lot of lower tranches get nailed before the AA rated tranches are touched. Shame the guy didnt make any quantified predictions relating to the % of loans he expects to be defaulted on. 

1%- 10%?

Look at the job numbers from last night for another (and the most important) sign of health

http://www.bloomberg.com/apps/news?pid=20601087&sid=aq2fZFzvKti4&refer=home

The USA is not headed for a depression- let alone the global economy


As was/is the case in the Australian property bubble

Developers will lose money in areas.
Punters will lose money in areas.
Real estate values in areas will fall steeply (Western Sydney), fall slightly, stagnate for a decade and/or keep going up.  

The global economy goes on.

The greatest recession story ever but for lack of evidence goes on.

The broken watches carry on for another 12 months without being right


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## wayneL (9 October 2006)

Here's an article from the broken watch

http://freebuck.com/articles/pschiff/061006pschiff.htm



> Don’t Buy the Dow’s New High
> 
> By Peter Schiff
> 
> ...


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## Realist (9 October 2006)

A broken watch is correct twice a day, much like a perma-bear will be correct every so often..

The ASX, or DJIA need to get to new highs regularly because if they don't they are going backwards compared to the CPI.  However the ASX does pay reasonable dividends which possibly cover some years CPI increases.

I'm a sharemarket and resources bull for the moment, but to me most Aussie property is overvalued, West Sydney is just about the only place I'd consider buying now as it has taken a bit of a hammering the past 3 years, especially against the CPI. Perth or near there is the last place I'd buy at the moment....


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## wayneL (10 October 2006)

Perma bulls often make the silly assumption that bears are *perma*-bears.

This is not the case. Therefore the broken watch taunt is a peurile attempt to dodge any serious consideration of risks in the economy.

Bears are bears *so they can be bulls*. 

Typically, a bear would like to be an investor on a value basis and so resists buying at inflated prices. A bear simply looks forward to the return of value.

When this occurs,* bears will most definately turn into bulls*.

So pullleeeeze. the perma-bear/broken watch taunts say more about those that make them than those who must suffer these infantile outbursts.

Cheers


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## Realist (10 October 2006)

How long have you been a sharemarket bear Wayne? What about a property market bear?

I've been a property bear for 5 years (Sydney property anyway).

I'm not a sharemarket bear and never have been, I will be if share prices go up and earnings don't though.

And my views on Sydney property may change next year or the year after if prices correct a little more.


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## wayneL (10 October 2006)

Realist said:
			
		

> How long have you been a sharemarket bear Wayne? What about a property market bear?
> 
> I've been a property bear for 5 years (Sydney property anyway).
> 
> ...




I was a property bull up till about 2002... but looked more at UK property due to the superior yields available at the time (positive yield was everywhere), but never expected this outrageous bubble. 

I have been an ecomomy bear since 2001. IMO the US (and therefore world) should have been allowed to have a natural recession at the time. Instead we now have bubblesville.

A soft landing is no longer possible... The cabal may be able to prop up the house of cards for a while longer... perhaps years. But once something lets go, the whole lot collapses.


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## BSD (18 October 2006)

http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vamhwNZFl1Ds.asf

Mr Faber making the case that Asia can still grow without US growth. 

A true internationalist - Mr Faber recommends commodities, oil, gold and Asian equities and property despite the assumption (his) the USD is doomed. 

Smarter than the average bear perhaps?







On a different note, when do we start discounting everything the perma-bear Roach says?

Probably the day before he is eventually right!


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## wayneL (18 October 2006)

Faber is a heretic!

I am reporting him to the Worldwide Bear Society.

He will be excommunicated, stripped of his fur and a set of horns fitted, before being cast out into a Bubblevision studio to reside amongst the Bobbleheads.


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## BSD (18 October 2006)

wayneL said:
			
		

> Faber is a heretic!
> 
> I am reporting him to the Worldwide Bear Society.
> 
> He will be excommunicated, stripped of his fur and a set of horns fitted, before being cast out into a Bubblevision studio to reside amongst the Bobbleheads.




I love Bobbleheads!!!

I would like a Jim Rogers Bobblehead - holding a copper pipe sitting on a barrel of oil or pile of bullion


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## wayneL (3 August 2007)

Peter Schiff on message, without the baying, mocking, imbecile, Wall St bulls interrupting. Sill bullish on Europe, Oz etc and megadoom for US.

http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vJck9ysOID2E.asf


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## chops_a_must (3 August 2007)

wayneL said:


> Peter Schiff on message, without the baying, mocking, imbecile, Wall St bulls interrupting. Sill bullish on Europe, Oz etc and megadoom for US.
> 
> http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vJck9ysOID2E.asf




A really good listen.

Really interesting that a hyper bear is saying the world economy will do better without the US. Hard to see that. Especially when other hyper bears are saying the world needs the US consumer. Can't see healthy demand for commodities without US consumption...


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## wayneL (3 August 2007)

chops_a_must said:


> A really good listen.
> 
> Really interesting that a hyper bear is saying the world economy will do better without the US. Hard to see that. Especially when other hyper bears are saying the world needs the US consumer. Can't see healthy demand for commodities without US consumption...



Agree!

It's the one part of his message I can't come to terms with.


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## BentRod (4 August 2007)

wayneL said:


> Peter Schiff on message, without the baying, mocking, imbecile, Wall St bulls interrupting. Sill bullish on Europe, Oz etc and megadoom for US.
> 
> http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vJck9ysOID2E.asf




That was such a good watch, thatnks for posting it up Wayne.

I liked his theory on Oil.

Have you read the book he mentioned?
"Crashproof" I think it was.


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## theasxgorilla (4 August 2007)

I love Pete.  He's so un-American.  Just cuts straight through it...no sensationalist scaremongering, just says it how it is.

I just hope he doesn't dig his own credibility grave a la Bob Prechter or Harry Dent by mistiming the release of his book.

Gotta wonder where the Fed is going to pull a joker from this time around.

Note the several positive comments regarding commodities, Australian stocks, and the AUD.


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## BentRod (10 August 2007)

Ended up ordering the book, I'll get stuck into it this weekend.


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