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« The Most Expensive Investment Research of 2006 | Main | Margin Debt and Sentiment »

February 20, 2007



"While he does not quite say it, the implication is that an eleven-month decline is an indicator of a recession around somewhere."

While you're giving lessons on critical thinking, that's a straw-man argument. Floyd Norris didn't claim causality. The start date of recessions is only known after the fact. So it's legitimate to look for indicators that a recession may be underway or imminent -- and this is not a bad one. If your real purpose is to deny the possibility of a recession, you have lots of other indicators and statistics you can point to to show that this time it's different.

Nova Law

Barry Ritholtz's usual modus operandi is to look for any news which reinforces his bearish orientation. You should not be surprised when he trumpets any tidbit which can be used to describe the glass as "half empty."


On the one hand, we have the wizards on Wall Street proclaiming a bottoming of housing, perhaps from their years of experience in dealing with highly liquid assets or because they did not step away from their keyboards looking for homes to buy. On the other hand, there are the same builder CEOs who are much more candid away from earnings calls.

Perhaps the expert with the ouija board is right after all -- after all demand doesn't care about mundane things such as pricing or affordability. I'll instead conclude that CEOs aren't that optimistic after all and that Goldman Sachs' Jan Hatzius is the biggest doom-and-gloomer of them all.

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