Good Macro Finance Discussion

Via Zerohedge. Fantastic as usual:

David Rosenberg, of Gluskin Sheff, notes that the multi-decade debt boom will take years to mean revert and agrees with our views that we are still in the early stages of the global deleveraging cycle. He adds that while many believe last year’s extreme volatility was an aberration, he wonders if in fact the opposite is true and that what we saw in 2009-2010 – a double in the S&P 500 from the low to nearby high – was the aberration and market’s demands for more and more QE/easing becomes the volatility-inducing swings of dysphoric reality mixed with euphoric money printing salvation. In his words, perhaps the entire three years of angst turned to euphoria turned to angst (and back to euphoria in the first three weeks of 2012?) is the new normal. After all we had angst from 1929 to 1932 then ebullience from 1933 to 1936 and then back to despair in 1937-1938. Without the central banks of the world constantly teasing markets with more and more liquidity, the new baseline normal is dramatically lower than many believe and as such the former’s impacts will need to be greater and greater to maintain the mirage of the old normal.

Further pull quote (emphasis mine):

“He adds that while many believe last year’s extreme volatility was an aberration, he wonders if in fact the opposite is true and that what we saw in 2009-2010 – a double in the S&P 500 from the low to nearby high – was the aberration and market’s demands for more and more QE/easing becomes the volatility-inducing swings of dysphoric reality mixed with euphoric money printing salvation.”

Back in 2005 I was part of a techno-security summit that featured the likes of John Dvorak, Marcus Ranum, a few of the l0pht boys, and various three letter agency spook types talking about cyber security and macro economic trends.

During the keynote, Dvorak in passing mentioned that around 2013 we will be deep into a global depression that will likely last a decade or more. When asked by a panel member what he meant, he said this (paraphrased):

“Oh yeah. The cycle will swing back and we are about to pay for all of this perceived prosperity. We will go through a period of down turn, and then the economy will super heat. When the Dow gets to 20,000, run for the hills.”

I will await that very ominous day. Dvorak’s predictions have been spot on so far. Who would have thought right? Based on that, and the last pull out from the Zerohedge piece, 2012 and beyond will at the very least prove to be interesting.

Big. Macro. Moves.

They will impact you and yours. The battlespace changes and exists not in a vacuum, but in a fluid filled suspension that is constantly morphing into something different.

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