June 13, 2009

On 3/22/09, I posted "Green Shoots". And I got flamed. Well, three months have passed, along with one of the greatest stock market rallies ever.

I'll let the post speak for itself.

Oh, and this chart too:





March 22, 2009
I'm feeling a sense of returning confidence. That the worst has passed. That we're done with nuclear surprises. That the recovery is starting.


There will still be terrible news to come, especially on the jobs front. Our corrupt monkeys will still be f*cking things up. And companies will be releasing horrific Q1 reports.

But this downfall can't last forever. It's already gone on for more than two years. $40 to $50 trillion has been lost. Half of the wealth of the world has been washed away. GM still needs to go Chapter 11. Banks still need to fail. And the criminals still aren't in jail.

But at one point, we level off, and the recovery begins. And it is always darkest before dawn.

After Bernanke's $1.2 trillion money bomb, Geithner's new toxic asset plan that will be announced this week, the revision of mark-to-market and restoration of the uptick rule that comes the first week of April, and even the start of spring, and I see the recovery beginning soon, if it hasn't already.

And after two massive bubbles, I think there's a risk we'll see a third. 0% interest rates and trillions being pumped into the system is a dangerous game. Unless Volker comes back and takes control (again).

Yes, I have an optimism problem, that's well documented. But something feels different right now. And when all the sheeple are negative and hopeless, that makes me look the other way.

So what do you think? Are we on the road to recovery? Or do we keep dropping into the depths of financial hell?

I see green shoots. Even if that seems nuts.

63 comments:

Anonymous said...

Looks like your right Keith. I too see green shoots...... but hang on. Whats changed. We are coming full circle. Looks like the banks have created money out of thin air to satisfy Uncle Sam. Is this not a different type of the same problem? Why are the masses running to buy stocks. Is this not a form of over consumption again? This is even more dangerous than before. Theres new bubbles forming as the corrupt monkeys try to slither their way out of this.

Anonymous said...

Federal Officials Order Banks to Freeze Millions in Online Poker Winnings

will shill for coin said...

Good call Keith. Gotta give credit where due.

Dr. Huxtable said...

Housing is going crazy in my town. Anything priced well is selling fast. Pending sales now exceed new listings. Almost 1/3 of Inventory has been wiped out in the last 6 weeks. Just wait for these numbers to hit mainstream media and you will see people jump off the fence and pile on in fear they will miss an opportunity to buy at the bottom. As Keith says, It Hath Been Foretold:


http://www.naplesnews.com/news/2009/jun/12/home-sales-rise-36-percent-over-year-ago-naplea-ar/

keith said...

I should have went on margin and gone long every stock I could find. And shorted the dollar too.

But even I was nervous, after the debacle of January/February. And all of 2008.

But overall 2009 has been kind. Very kind.

Yet I have no idea what tomorrow holds. Even though I'm still very, very optimistic that when the history is written, it will show we hit bottom in February/March 2008.

Two words: Money Bomb.

And it was a big one.

LoneLibertarian said...

The Dow is not the "economy"

Who are the big players in the market? Goldman, JP, and others who got TARP money. No need to guess where that money has gone as it has gone into long market positions.


Obama essentially called the market bottom and told people to buy the market back on 3/9/09. Since then it has rallied like never before. Coincidence? I think not.

Don't fight the FED (or thier "private market" chronies)

Anonymous said...

I agree with Keith, but it seems very fragile on the recovery. Raising interest rates and loan approval standards getting tougher by the minute will eventually shift us in reverse again. The only homes selling are under FHA limit. Conventional loans are very difficult right now. Plus the new appraisal standards. Homes are starting to go pending, but closing is another story. Alot of downward pricing pressure still, but that's a good thing.

Anonymous said...

Within a few months(no later than mid autumn) Keith will be served up an unsavory feast of crow.

trPM

Anonymous said...

Keith, if you publish "oh look I was right all along", will you also publish the times when you were wrong? You remind me of Bob Brinker. When he is right, he will remind people over and over again. But when he is wrong, he won't say a single word.

Anonymous said...

Off topic, but is Ballmer a freakin D!ckhead or what. What. Ass kicking to stifle innovation? Thanks.

http://www.businessinsider.com/henry-blodget-steve-ballmers-secrets-to-kicking-ass-2009-6

Anonymous said...

.



HOW'S THAT HOPE AND CHANGE WORKIN OUT FOR YA?




.

Wind Farmer said...

I should have went on margin...ARGHHHHHHH

Hey Keith, you seem like a smart guy, but you often make two serious gramatical errors that indicate otherwise:

I should have GONE on margin...

And things like:
There's lots of people...
Should be
There ARE lots of people

This green shoot thing makes no sense to me. I believe the FED is in the market in a big way.

keith said...

I'll let 4 years of blogging this thing speak for itself.

5000 posts. Had some clunkers for sure.

But deep down, on the way down and now on the way up, you know I'm right.

keith said...

Wind - you are indeed correct.

I should have said "I should have done gone and went on margin"

My bad

Anonymous said...

Ever pour gas on wet wood to start a fire. It lasts about two minutes.
I think I am going to go invest in a "hot seat" at the casino tonight.

DMP

Mammoth said...

There may be green shoots, but time will tell just how well they can endure the whirling lawnmower blade of high energy prices.

RICO said...

"Half of the wealth of the world has been washed away."

It was 'washed' down the proverbial rabbit hole.

A massive accounting 'tour de force' that *magically* transferred trillion$ in toxic investments/bad bets into future public liabilities/debt.

Accounting fraud of biblical proportions has been perpetrated on innocent/unsuspecting/unborn future taxpayers.

They will piss on our graves for this gross injustice.

We must push aggressively for an independent forensic audit of the Fed and imprison the Wall Street fraudsters/banksters.

We must do it for our children's sake...

Anonymous said...

when will u get ur head outta ur ass and start talking about peak oil. its the only thing that matters. its also the root cause of ALL of your posts.

Anonymous said...

Green shoots, perhaps but soon the grubbers and leaf miners will appear, then rot.
We will be taken out by a NATURAL disaster, mark it! The whole country will become as nothing, because the government is hiding a big problem from you right now.

Anonymous said...

Great Schiff video blog.

http://www.europac.net/videoblog.asp?a=watch


Password is inflation if anyone stops you at the door.

BuyerWillEPB said...

"On 3/22/09, I posted "Green Shoots". And I got flamed."

Ah, don't take it personally keith. You're doing good here. Real good.

It's hard to tell the truth out there. And yet you do it. It doesn't matter if we agree on everything or not. The goal is to find the truth out there.

Good job keith, truly.

John said...

Are you serious? This is just the start of massive inflation which will in effect destroy the U.S dollar. All those trillions have to go somewhere... Not to mention that commercial real estate and alt-A haven't begun to crash. No, this is just a fools rally before the real fun begins around September...

Anonymous said...

The Dow is not the "economy" .


Exactly. But Keith has always been weak on definitions and weak on clarity.

Anonymous said...

I must be on the GreenShootsAndAsses.blogspot.com site...

No way do I see growth upon the horizon... not for another generation.

If you do, you must be smoking some good "Green Shoots."

Industry (something the world buys from us) will be the only thing to get us out of this mess, and, a "good" GM and Chrysler company isn't going to make things better in our economy... $25,000 "entry" level cars is what they plan to produce, and without the "toxic" loans, nobody is going to buy their automobiles.

"Good" banks and car companies vs. "bad" banks and car companies... STOOPID kindergarten logic... the bill will come due... someday... someday soon.

JAWS said...

Well, after shaking my anger off a couple weeks ago, I decided to sign up for REAL ESTATE AGENT SCHOOL. WTF not! If this sucker is sprouting green things, I might as well get my ass in there and start collecting. I am committed to kicking somebody's ass somehow.

Ya know what did it? Too many of my friends are on your side of the fence, and I don't really consider them too bright. They all want to buy houses. I figured, if THEY want to buy a house, why don't IIIIIII sell it to them. I can spew BS as easy as any realtor, probably better because I don't give a sh*t. I'm still pissed.

Oh, and when I was in the RE school having my fingerprints taken, I noticed that the examination room was FULL UP with people taking the exam. Oh, and they give two tests twice a day, 5 days a week.

I'm going to feel better very soon.

I may even look up Lawrence Yun.

Bernanke is starting to look real cute too.

I'm beginning to understand these green shoots.

JAWS said...

I truly hope we still keep dropping into the depths of financial hell. I have NOT had my fill of this thing.

That said, now that I will soon be wearing a GOLD COAT and a NAME BADGE, it suits me fine that morons believe it's all over. I will warn them not to trip on all the green shoots everywhere. Oh, and the tumble weeds in the backyard, just ignore them. The HOA will take care of them.

I'm going to lie my asssss offfff.
Just watch Las Vegas, for when JAWS has her realtor license, these dried up old rotten pieces-o-crap will be flying off the shelf.

Singular said...

No. No green shoots. What looks like green shoots are little upward blips on a zigzagging line. (And yeah, you can make money off these blips.) But this zigzagging line is headed south overall. You are a fool if you think there is permanent recovery and stability ahead. There is NO WAY. There is no climbing out of the debt crater that is the American economy.

What is happening now is "mop-up". The rich are going bargain-hunting. They are putting their money into safeholding by buying stocks that will hold their value longterm. And why not? The American dollar will crash so there's no point keeping one's money in something that will soon be worth trash. So they are using their vast wealth to buy stocks - stocks that are worth something, like food commodities: rice, wheat and so on. Also oil. And even property. So of course there is an uptick in the stock market. But this is only a game for rich people. Poor people cannot play this game and they are stupid if they try. Rich people, OTOH, if they want to preserve their wealth had better go on a shopping trip now while their money is still worth something. After they go on their buying spree, then they will hang on tight to their money and their stocks. No spending on luxuries. When the depression is under way, these people will be in a good position. What they have, commodities, will be in great demand, as there will be a severe shortage. After the depression, the rich will own even more of the world's wealth than they did before.

But be sure of one thing. The crash is coming. It will be terrible. Worse than the last depression.

America will not survive it.

vanilla ice said...

How is printing money a recovery?

Ron Paul is right! said...

I still think the markets going to get hammered, BIGTIME yet. I'm calling bear rally here.

As to having a contrarian view, you are actually mainstream with your optimism. It's everywhere you look now, everyone is saying the worst is over. So calling this a bear rally would actually be contrarian.

They can inflate all they want and they will. I still don't think it will help. People still can't afford to pay cash for the things that are for sale. And jobs are becoming more plentiful but they are $10 an hour jobs. Can't buy a nice HD flat panel on that. So unless they start giving credit away again, I just don't see any other way for this thing to go.

What difference does it make if a home, car, TV, phone, gasoline, etc is inflated in value if people can't afford it? It will sit on the shelf inflated. I think this mini oil rally will fizzle soon too. Then again, I got out a year before the peak and am pretty conservative in nature. So risk takers should ignore my post.

Anonymous said...

LARGE dead cat....the first half of 2009 might have been sunshine and roses but I am betting that the second half is not lolipops and unicorn's.

But I have no skin but my own in the game so I hope you all make ass loads of cash or gold or oil or whatever game is fashionable at the time.

Anonymous said...

"...There is no climbing out of the debt crater..."

Amen. There are not enough people; not enough GDP to service it in today's dollars.

We had a good run '45/'85. The last 20 years not so much; the last 10 at least driven by dark forces not at all loyal nor benevolent towards our country.

Good luck everybody.

Peahippo said...

A sucker rally is not a recovery.

Keith and others need to understand that the extent of this crash involves sucker rallies on the way down.

This unwarranted optimism is as bad as the MSM calling the bottom every month.

Anonymous said...

You have got to be joking. My stock account is way down over the past few years.

We will have green shoots when the GDP turns positive.

Anonymous said...

And this is why your an idiot, with not sense of context or historical knowledge. The DOW is NOT a green shoot. It never has been and it never will be. Ask anyone alive in 1932...go ahead...your gonna get killed...but you deserve it...

Anonymous said...

Then what it means is that living beyond your means is a perfectly sound strategy in America. Some people get foreclosed on, but there are plenty of rentals, while some people get laid off but there is plenty of entitlement waiting for them. Pretty good deal really. They never had much saved and so didn't lose much in the stock market anyway. That"s why you're wrong either way, Keith. There never was an American Panic, so there isn't any ash to clean up. Or you're wrong about the timing and the panic hasn't even begun.

jersey said...

Even with Obama's "money bomb", the rate of growth in M3 is plunging. The USD and bonds are headed higher to appease the Chinese (thanks Ben). But -- banks are still insolvent and the general economy is in shambles. The markets are smarter than all of us and they will soon reflect the reality of future earnings that aren't there.

Green shoots will become oh shits! The next money bomb from Congress will sink the dollar because all of Obama's credibility will be gone. Larry Summers will replace Bernanke and he will turn the Fed into a branch office of the White House. Watch Obama try to buy the 2012 election with cash handouts. The rest of the world will LOL.

Miss Goldbug said...

It's all just a bear market rally. This suckers going down.

Anonymous said...

Wow Keith, I am shocked. May I ask "Green Shoots to WHAT? I am not a terminal Doomer, but I am a terminal realist. What would we be turning the corner to? Since 72% of our total GDP is consumer spending based on unservicable debt would you say we are returning to that? Are we returning to the unlimited use of revolving credit at 29% interest. Are we returning to a jobs market that doesn't exist and has been outsourced over the last 20 years. Are we returning to buying more overpriced value dropping real estate with newly created loan sharking techniques? Are we returning to a nation where Trillions of cash Stimulus dollars will hit the money supply and water down the currency within months? How can we be returning to anything when we are a NON productive nation that manufactures nothing. Green Shoots, Bottom, A return to W H A T?

Out at the peak said...

"Foreclosures in Hawaii soared 397.6 percent last month to a record high and pushed the state to its highest national ranking since 2005."

We have not pealed back all the layers of the onion.

If the stock market keeps rallying and has a positive 2009, it's all due to inflation.

I'd really like to be positive, but the economy is clearly still down from here. I mean we haven't even hit the price trend line for houses yet. And you know we are going to overshoot. That's just what happens after a bubble burst.

I have missed a bunch of your posts, but are you still in Europe or are you back in the states? If you are still abroad, you must be subjected to "it's greener on the other side" mind trick.

Anonymous said...

Mamoth said:"There may be green shoots, but time will tell just how well they can endure the whirling lawnmower blade of high energy prices."

LOL. Its going to be a John Deer riding lawn lawn mover with tons of power. Green shoots? Everything will turn to purverized mulch in two months time.

Anonymous said...

PEAK OIL

it hath been foretold

mikeruppert.blogspot.com


this
is
the
end

alex3191 said...

You're kind of bright-guy, Keith. Really ! Now what ?! how about a StockPanic-blog ?! because really looks like a HousingPanic deja-vu situation :)

SeattleMoose said...

The eye of the hurricane brings out all the fools to the beach.....

Mike Hunt said...

Keith,

My hat is off to you. The money bomb talk rallied the hell out of the market. You were right. And I'm happy, I'm back in the positive in all my stock accounts. However, there is a big chance the rally will fizzle out and crash.

The rally was pretty nice. But don't tell me there is no chance we will retest the lows of March.

Are you ready to pivot again or are you now in a perma-bull mode?

-Mike

mystery shopper #33961 said...

'I'm feeling a sense of returning confidence.'


The media campaign is working...

Consumer confidence is spiking in the face of utterly dismal economic reality.

Perception is readily manipulated, though.

Given all the "better than expected" earnings reports and the "less than anticipated" jobless numbers, things are certainly looking up.


Smoke and mirrors.

Greenwash and hogwash.

keith said...

Mike - I'm never perma-anything

Things change, you gotta change with them. Before everyone else if you can.

But looks like a lot of folks here are still wearing acid washed Lee jeans listening to their Sony Walkmans

Bukko_in_Australia said...

Other people can say it better than I can, like "Ilargi" of The Automatic Earth blog:

"No, Obama is no defender of free markets, and for the same reasons that his administration has nothing to do with socialism. Taking money from the people to give it to a select few rich bankers is not socialism. If anything, it's the opposite. And it hasn't got zilch to do with free markets either.

The FDIC hasn't closed hardly any banks lately, and that's disconcerting. No-one with an ounce of live brain tissue can believe that all 8500 or so banks left are in great health, not with the foreclosures and lay-offs continuing at breakneck levels, and not with commercial real estate dissolving. We have known for a while that the FDIC is short of funds, and that is surely a reason behind the hiatus in bank seizures. A more prominent reaon, though, may be the administration's plan to start selling off troubled banks to private equity firms. That should make for some nice deals. It’ll be presented to the public as some dort of natural economic phenomenon labeled "consolidation".

And everybody will talk about green shoots and how to divvy up the future loot beyond the horizon, while not one single present issue will be solved and growth won't come back in our lifetimes. Well, except for our debts. They will keep on growing."


The stock market is not the real world. People who play the casino might have more paper profits because of this "great rally," but how many of them are there? One million in a world population of 7 billion? How does this rally help someone who used to work serving lunches to guys from the auto plant down the road that's now closed, or the Latvian homedebtor who gets paid in their devalued money but whose mortgage has to be repaid in euros?

The money bomb is a weapon of mass debt-struction. The piper will have to be repaid, whether by currency destruction or debt repudiation. Either way, someone's ox will be gored. Everybody here, except the old Greek lady in Bed 60 who we took off the BiPAP breathing machine and moved into a single room so she could expire quietly, is going to be alive when this plays out and falls apart. And there won't be any nice nurses to give us subcutaneous morphine injections while the economy is gasping for breath.

While I like the idea of Keynesian stimulus, none of the O-bombing has gone into the pockets of real people. It's just a numbers game for the thin crust of money-spinners at the top of the economy. Maybe that group includes you, Keith, but there are a hell of a lot more people who aren't in on the action.

The money bomb and stock market rally will ultimately be as illusory as perpetual motion machines. We don't get something for nothing. The longer we delay real reforms, the worse the comeuppance is going to be.

edd browne said...

The greatest thing we have to
fear is .... average Americans.

Ignorance on the right; ignorance on the left.
Into the valley of peril rode general Othello;
fending mud and darts of outrageous fools.

edd browne said...

Jim Rogers says that he has
zero shorts now (inflation fears).

He's not buying gold or currencies at this time.
But he remains in China stocks/bonds, and
essential commodities.

He won't make predictions, but he's
worried about the Western economies.

I wish he'd stop asking me for advice.

Anonymous said...

I will be sure to pass on your green shoot theory to my can't find work friends .You are right again , that is depending on which side of your flip flopping mouth you are speaking Research the last few biggest stock market rallies .
All in or around the 1930's depression .Even monkeys eventually learn .

Anonymous said...

It's the same as the glass half full/half empty question. Yes we are 35% up off of recent lows, and yes we are still 35% down from recent market highs. Both answers are correct.

Single said...

Good Luck with that one Keith. I hope you don't break your arm patting yourself on the back. However, keep that arm in good shape, you may need it when the government runs out of funds to keep propping these worthless companies up. If THAT doesn't happen (because Obama loves the US Mint printing press so much) then prepare for massive inflation. You will need that arm to take the wheelbarrow of money to the store to buy your loaf of bread. Obama is a HORRIBLE leader with NO grasp of economics.

The problem with socialism is that eventually you run out of other people's money. Or in the case of Obama, you just print more making it worth less. Yup, Obama is a pinhead, pure and simple.

Miss Goldbug said...

Tulip shoots?

Anonymous said...

Seattle Moose said:"The eye of the hurricane brings out all the fools to the beach....."


Good one!

Joe said...

We will start to see a new crisis over July/August. Before the end of the year all will know that US Empire is over and out. Period.

Joe M.

Anonymous said...

"...Bukko_in_Australia said...

"...Taking money from the people to give it to a select few rich bankers...zilch to do with free markets...commercial real estate dissolving...FDIC is short of funds...selling off troubled banks to private equity firms...presented to the public as some sort of natural economic phenomenon...

...how to divvy up the future loot beyond the horizon, while not one single present issue will be solved and growth won't come back in our lifetimes..."


...The money bomb is a weapon of mass debt-struction. The piper will have to be repaid, whether by currency destruction or debt repudiation...a numbers game for the thin crust of money-spinners at the top...We don't get something for nothing. The longer we delay real reforms, the worse the comeuppance is going to be...."

Well-put, Sir.

edd browne said...

Yes, libertarian economics
has been one of the greatest
disasters in recent history.
Future generations will
suffer greatly for our sins.

They will be "lucky" if current leaders
are wise and brave enough to keep
choosing the "least of evils", since
"good choices" are gone.

Anonymous said...

I see Tulips!

Anonymous said...

I see stocks that have gone up times 5 in the last few months and being still 80 percent from their highs and for the second time i have missed the big take.....being a buy and holder....

Anonymous said...

oh ..but such beauty as the eye of the hurricane passes......

Anonymous said...

but if the 500 plus trillion of derivitives are bogus and lost money how does inflation caused by printing up of 10 trillion make ?

Anonymous said...

10 trillion printed does not paper over or cover up 500 trillion destroyed......... i should wait for 10 avacados to the dollar again?.....i should live so long!!!!!!

Anonymous said...

Kieth:

It is not optimism, it is the printing press.