Sharad

As one of the few who anticipated both the 2000-2002 and 2007-2009 collapses (and having shifted in 2003 to a constructive outlook in-between), what I thought the film [The Big Short] particularly got right was just how excruciating the wait was before the crisis unfolded, even for those who expected it (see, for example, my November 2007 weekly comment Critical Point). Though I don’t take leveraged positions in credit default swaps, or sell bank stocks short, even refusing to take equity market risk in the later stages of that bubble was excruciating enough. One had to suffer fools parroting things like “being early is the same thing as being wrong” until the collapse demonstrated that, actually no, it’s really not. The 2007-2009 collapse wiped out the entire total return of the S&P 500, in excess of risk-free Treasury bills, all the way back to June 1995. http://www.hussmanfunds.com/wmc/wmc160104.htm Hussman never was bullish after the 2009 bottom (here is his March 2009 newsletter http://www.hussmanfunds.com/wmc/wmc090309.htm and his November 9, 2009 newsletter http://www.hussmanfunds.com/wmc/wmc091109.htm). I don't think he ever changed his tune. Hussman isn't early because he was never bullish. Now, if the market falters, he'll be hailed an Oracle yet again, but he'll have permanently lost many of his investors' money because they redeemed, and those left holding the bag are left with lower quality assets that remain after those redemptions. Sorry, Hussman's facts and figures all appear to be correct, but investor sentiment and the flood of money that was pushed through the economic system had to go somewhere, and that wasn't in consumer spending. It shored up broken balance sheets for consumers, corporations and even many governments. You can keep pushing that button, but once you stop, the music usually stops soon after. We may finally be at that point, but regulators will likely find a way to save the economic system from complete disaster.

This is a great example of macro prediction that Tetlock disembowels in "Superforecasting". First of all, no time frame is given. Second, it's all "if this then that maybe" vague pontification. Third, it's not even come true, but the author claims it has. Fourth, if it won't come true, author will say "but I said ifffff". Fifth, it is cherry picked out of a long list of author's prognostications by using Monday morning quarterbacking and selective memory. There is zero accountability for any of the predictions, and zero evaluation of how many of them worked out and how many didn't. Since this is all in good fun, I'll play ball Jurgis: 1. S&P 500 falls to slightly below 1,700, and bottoms in the 1,660-1,700 range in the next 6 months. Should the market fall below that, expect a retest of the 1,550 tops of 2000 and 2007. 2. The Canadian dollar although in freefall, bottoms around $0.665 against the USD. This happens in the next 12 months. I'm a Canuck, so I follow CAD-USD closely. 3. Even if the Federal Reserve raises rates again this year, it reverses course before the end of 2017. Rates go negative within 3 years, as all other options are exhausted, and all other developed economies continue to lower their rates creating the importation of deflation in the U.S. The rate declines in other countries fail as well, as deep credit contraction will pressure countries. 4. Gold rises to 1,200 as the fear trade creates a little rally in the yellow metal. However, before the year is done, gold also peaks, and resumes its decline. 5. Oil bottoms this year in the $23-25 range. It does not rally, but just sits there, as the global GDP growth rate falls to the 1% mark. I'm just saying this all in fun, but I am thinking in these terms and trying (failing in my attempt?) to position my portolio against the above forecasts...I should also add, I'm not sure I care if I'm right or wrong overall. I don't manage other people's money, and I hedge my portfolio, and attempt to get a positive return each and every year. Since it's my money and not others, I treat my portfolio like a family member, and try to do no harm to it.

Funny, I agree with much of what you say in that the US is better than the rest of the globe, but I believe that the Federal Reserve will have to proceed to negative interest rates to stem the flow of capital into the country, the rising USD and the importation of deflation from countries that are attempting to devalue their currencies (whether intentionally or recklessly).

I have been buying more tanker stocks, including NAT, FRO (albeit they have a reverse stock split upcoming) and TNK. I think there is a lot more upside in them, and when oil begins to turnaround, tankers will benefit from contango. Until then, they benefit from oversupply of oil, and the increased demand for double hull tankers.