Sell-Off Was Another 'Flash Crash': Barton Biggs

I do not know where the bottom is. I am basically 50% net long. I covered a little bit yesterday. I am now 60% net long and I wish I was not. I wish I was 10% or 20% net long.

http://paul.kedrosky.com/archives/2011/08/qotd-barton-biggs-i-want-to-go-home.html

Barton Bigs looks like a genius for his calls.

Not that the data isn't interesting, but given steveF's history (which is incredibly parallel to stevejhxs), this is probably a sign to run the other way. You are talking about the two most consistently wrong folks on the board... who both just happen to be named Steve.

""a classical technical breakdown" is not a "flash crash." The volatility and huge bear flag have been foretelling this for quite some time.

That said, the market could very well rally 7% in the near-term; the technicals aren't completely broken down yet. But to say that today's jobs numbers were good - when the number of claims keeps going up, and keeps getting revised up - and Greece not at all close to fixed, is really a stretch.

Barton hasn't been doing so well, calling "Buy the Dips" in May 2011 - right precisely at the peak.

Sounds like he's long in a short market.

If you listen to his Bloomberg video today -- BB recanted his coward bull position from August --

Moreover, I want to comment on my viewpoint the SteveF (who called the stock market bottom in 2009) and Stevejhx (who called the fall of housing prices in Manhattan well in advance of its occurrence -- could not be more opposite (where do you get parallel???) Weird.

MFox - Ediot is a troll, I have turned him off & don't read what he says. He will soon be counted among the ranks of w67. Putting him on IGNORE will extend your life by at least 5 years.

I sold everything at 12,600 on the dow. I will rebuy at 9,600, which is coming.

I said this over a month ago, and even said the end of September would be bad.

I am seriously wondering if we will see another drop to 7400 dow index.

NOTHING has fundamentally changed since 2008. The bankers have a little more paperwork because of the slap-on-the-wrist regs, the economy has moved to China and there is nothing compelling or new to spur people into spending (like computers in the '80's or the internet in the 90's, houses in the 00's). The fed keeps doing things that don't translate into jobs or make sense to Main Street, and the republicans keep screaming about a deficit while Democrats blame the millionaires. Health care reform is MIA.

Technology, software companies, and the internet keep putting people out of work by replacing stuff we used to pay for with free/cheap stuff; magazines, video rentals, music downloads, photo developing, graphic designers, photographers, and soon, lawyers. All of these things are devalued. The unemployment caused by this is similar to that of the industrial revolution.

Commodity shortages (corn, wheat, some chemicals) are causing inflation in the food supply (Costco case of Coke; $5.88 last summer, over $12 today). TIPS are proof that the fed has a ve$ted interest in not confirming inflation. Russia is no longer exporting wheat (natural disasters exacerbated by climate change), and ethanol (to fuel China's growth) is eating all the corn.

So, yeah, have fun with that stock market thing . . .

Most equity guys are optimists. Not sure if it's an occupational hazard, lying or believing one's own bullshit. In either case one needs to take what these guys say with a grain of salt. For every Hugh Hendry there are ten or more Barton Biggs. Besides, why give money to someone who is bearish since you might be more inclined to hold cash if agreeing with the opinion. Going short is not as natural to most as going long.

Average 1 Br apt in Manhattan = US$875,000
Average income in Manhattan = US$120,000

Assuming 40% tax rate, it takes 12 years of a person's earnings to buy a 1 bedroom apt. That's assuming you don't eat. Really??!?!?!

Something is broken.

That is why 80% or whatever of Manhattan is renters. Duh.

Gotta luv a "duh"!

"Moreover, I want to comment on my viewpoint the SteveF (who called the stock market bottom in 2009) and Stevejhx (who called the fall of housing prices in Manhattan well in advance of its occurrence -- could not be more opposite (where do you get parallel???) Weird"

Actually, SteveF is more accurate than stevejxk. Scary.

Stevejhx called 50% down or more in RE, with the market down 20% off peak, SteveF was actually more accurate in saying "return to peak" or "flat", or even a bit up.
Stevejhx's stock picks have been downright awful. He called short at dow 10k, right before we went up 2600. He called for dow 11k right before we started the fall to 6500.
Also, SteveF did come out and saying he was buying stocks when the dow was dipping below 10k... and then it proceeded to go to nearly 13k.

But, overall, you are still talking about two guys who have made awful, awful calls...

Manhattan will always have a fair number of renters.
First you have many people who don't expect to be here for more than a few years, second a constant stream of young people entering the work force who eventually plan to move to a house in the burbs, third a captive group of people who live in rent stabilized or controlled housing(combination of owning not being competitive or even financially possible) and lastly rent to buy is not as compelling in Manhattan vs other parts of the country, but a sub 4% mortgage and rising rents make this more of a judgment call.