You're not going to believe this - Eric Janszen

[bill]

Re: You're not going to believe this - Eric Janszen

It seems fairly obvious to me now that the correct comparison was Japan, which I don't recall seeing here back in 2007.

.

2008 my post
http://www.itulip.com/forums/showthr...57848#poststop

http://www.itulip.com/forums/showthr...45873#poststop



What I want to know is who gets the blame for US government reckless credit expansion / dollar devaluation that is root cause of global instability economic pains.

[oddlots]

Re: You're not going to believe this - Eric Janszen

Precisely.

[ljaycox]

Re: You're not going to believe this - Eric Janszen

Sounds like rationalization to me. EJs piece basically said, "what we predicted has proven 100% accurate." well, not so fast. Without any time constraints it can never be proven wrong. I know the site has been backing off the original theory for a while now, stating that ka poem is a process. Well, at some point I need to call a spade a spade. The period between ka and poom was never stated as taking 5+ years until well after it was obvious it was going to take at least that long. I don't call that 100% accurate.

You don't like the CPI, perhaps because it shows that high sustained inflation is not happening. Thee are many other measures that show the same thing. The few measures that would show higher inflation (such as including energy and food prices) are showing deflation right now. They are volitile. There is good reason they are not included in core inflation measures.

I understand your perception of some waffling on questionable theses here. No one likes to stand up and proclaim their errors. Here it seems to be done obliquely, but it is done. I have never seen TPTB here try to twist the ideas of others as a cover story on their mistakes. And that is what Mish appears to be doing.
On to Ka-Poom. The Japanese way requires access to enormous amounts of capital (savings) at low cost. The Japanese had internal savings to finance their two plus decade road to hell, but they will arrive soon enough. While the US did not have access to internal savings, we have access to the savings of others. The Mercantilist exporters of Asia and the petro-dollars of the middle east client states replace the domestic savings of the US. As long as those money flows are available, we will not have Poom. If one of these blocks needs their own savings, she blows up instantly. That is why there has been so much focus on a blow-up in China, if/when it comes they will need their savings and we blow up if the mid-east cannot pick up the baton. Until then it remains the vendor financing Ponzi it has been all along, until the vendor financing is no longer in the best interests of the vendor.
This leaves the petro-dollar gang. We are the muscle that keeps them in power and they pay the thug...err friend when he visits. If something blows up there, maybe China can pick up the load, maybe not--then we go boom. There are a hundred scenarios that could play out. Very few of them have benign outcomes for the "system" (hence us).
I have read John Hussman every week for years, while I don't think he is a strong stock portfolio manager, he is like going to graduate school in finance and I have learned a ton from him, and his total return strategy seems sound. He still says real inflation is still in the out years of this decade. That is still too close for my comfort, so it is battle stations now. His analysis of the instability that the Fed has built into the system with the money/GDP ratio is terrifying.
As for low inflation, don't you believe it. I work in the packaging industry and many commodities/materials are feed stocks for my industry, and we get regular insight into input costs of the products that go into our products (usually when customers are looking for packaging decreases to offset increases in other raw materials . The price increases in industrial inputs have been breathtaking, and even if volatile, a blind man can see the trend momentum building. This volatility does its own damage to small and medium size companies who cannot effectively run programs to hedge input costs (like Southwest does with jet fuel). These whipsaws demolish margin on inventory. I think the CPI is under reported, by how much I will leave to experts to wrangle about--but producer prices are horrifying right now, and freight is up huge.

[c1ue]

Re: Yet more amusing emails between EJ and Mish

Yet more amusing emails between EJ and Mish

While it is amusing, ultimately I'd like to see more new analysis from EJ and the various Freds than a debate with Mish.

Besides being a paid shill for a fund management firm, Mish's own idiocy was more than enough to proclaim the value of his 'analysis' in just 3 weeks back in 2006 - when I was first looking around for outside economic opinion and analysis.

I've literally not glanced back since then, but certainly it doesn't seem like I've missed anything in the past 4 years+

[ST]

Re: Yet more amusing emails between EJ and Mish

A part of the reason, in my opinion, why Mish is the way he is, is because he spent a LOT of time on SiliconInvestor.com and Fool.com boards. I'm talking tens of thousands of posts. (55k @ Fool, 42k @ SI)

One key to understanding his psychological profile is that when you post on those boards, your posting gets recommended by others, or not. Ultimately, people read you if you have high recs on your posts and do not read you if you less recs, so consciously or not, if tends to affect peoples' postings - at least I think it does when you're in the super poster category - 100,000 posts? How can someone have any time to do analysis when all one is doing is talking back and working towards being popular? One cannot. So you pick up tidbits from Mises et al and find a reason to call a duck a cow (as EJ noted below).

In the end Mish ends up craving the popularity and will use the same well worn tactics, which we all know work towards that goal. Perhaps, he equates popularity with validation, not only in terms of the ideas, unsupported or not, but self esteem.

[Guest]

Re: Yet more amusing emails between EJ and Mish

I did just go and read Mish's column. I got the impression he used data somewhat selectively in places, as many graphs included certain months, others omitted them. Charts/graphs that didn't really support his thesis were presented w/o comment, interestingly. He also seemed biased in his interpretation of some of the data, and his points seemed a little scattered. I wasn't convinced he connected on several of his so called 15 points. But some of his ideas seemed to have merit enough to investigate further.

Overall you have to admit that 4 years into recession, we have not had the degree of inflation many expected. But I do not think there is any "free lunch" and that money printing and deficit spending are ever a good thing.

Seems to me you could argue it both ways to date depending on what you use and what time frames you include.

fuel - Up till crash, then way down, then back up again, and recently down again
food - probably up
homes - way down
appliances - I got a fancy W/D for $300 less than it was last year.
Autos - Many are heavily discounted to the extent they are cheaper than 2007 when I was shopping.
Gold/silver -way up, then recently down at different times.
Various other commodities -up then down, then up, then down again
Incomes - generally down


Many of the charts/graphs are snapshots in time. A downward trend ending this month could later be shown to be a tiny hiccup in a long upward trend. Or vice versa.

My "common sense" tells me that inflation is coming our way, probably disasterously so. But I thought some of Mish's points on debt deflation counteracting the "money printing" by the Fed and deficit spending to be worth investigation. I hope he's right as I fear hyperinflation's disruptive effects more than a bad economy. But I fear he's dead wrong and invest in gold, silver, oil, and cash now with shorts in home builders and financials (both just closed out). I was surprised by the 2008 deleveraging effect on holdings, and foolishly shorted financials in 2009 but otherwise it's done well.

My general impression of the exchange was dismay at how emotionally invested the prognosticators were in being seen as "right" in the unseemly exchange. Because it's obvious it has an effect on how each interprets the data. Peter Schiff, Krugman, whomever. I see definite signs of bias from just about everyone doing this stuff. I want the straight scoop. When you go to court you want an impartial judge of facts. You do not want the judge to be "invested" in who wins or loses or worried about his reputation more than justice. I think the ego trips are unfortunate for us and can distort the information we get here. Mish gets points for brevity, clarity of writing, and courtesy. EJ wins the argument so far with me in terms of my investments. But there is much much room for improvement in presentation and humility. I came away with a diminished opinion of this website as a result of that exchange being posted for public consumption.

[raja]

Re: Yet more amusing emails between EJ and Mish

EJ leads off his article by saying, "Your argument for a depression and deflation spiral was flat out wrong."

But when I went to Mish's post, he actually says: "My position all along was that the US would go in and out of deflation over a period of years, just like Japan."

So, we have "depression and deflation spiral" vs. "in and out of deflation".
A "deflation spiral" gets progressively worse. "In and out deflation", means depression alternating with inflation.
Can we then say that EJ's characterization of Mish's viewpoint is accurate?

Then at the end of his article, EJ attributes a prediction to Mish: "You said . . . the debt pyramid will implode."
But when I followed the link, I found out that these were not Mish's words, but what Gary North said about Mish.

There were other problems, including the tone of the email exchange.

You all are welcome to your opinions -- everybody lives in their own reality, and rational argument is futile.
But I'm with Munger and SalandRichard on this one . . . . except with SandR's "EJ wins the argument so far with me in terms of my investments," with which I disagree.

[Alvaro Spain]

Re: You're not going to believe this - Eric Janszen

... Erica Janszen on the other hand ...

[bpr]

Re: You're not going to believe this - Eric Janszen

Any particular reason EJ's responses to Mish were so snarky and almost insulting? I didn't read his column. I was impressed by EJ's retort and backing graphs and agree with his conclusions but why so hostile about it?

Here's a theory: jealousy. EJ mentions repeatedly the "popularity" and high traffic that Mish's site gets. He recognizes this and rationalizes it by saying that "...my site will always be less popular than yours..." because the content is not for general consumption, much like the grapes were not for fox's consumption. It's important to note that EJ is always the one mentioning traffic and popularity here.

steveaustin2006's post is illuminating, because I know little of Mish, except that I read him regularly for a few months until I found Itulip:

In the end Mish ends up craving the popularity and will use the same well worn tactics, which we all know work towards that goal. Perhaps, he equates popularity with validation, not only in terms of the ideas, unsupported or not, but self esteem.

But in this email exchange, it is EJ who comes of as covetous of traffic and popularity.

My general impression of the exchange was dismay at how emotionally invested the prognosticators were in being seen as "right" in the unseemly exchange... I see definite signs of bias from just about everyone doing this stuff. I want the straight scoop... You do not want the judge to be "invested" in who wins or loses or worried about his reputation more than justice. I think the ego trips are unfortunate for us and can distort the information we get here. Mish gets points for brevity, clarity of writing, and courtesy. EJ wins the argument so far with me in terms of my investments. But there is much much room for improvement in presentation and humility. I came away with a diminished opinion of this website as a result of that exchange being posted for public consumption.

Well put. Everyone wants to be right and recognized as such. In the area of economics, they want to be widely recognized. The more widely recognized, the more right, it seems, some times, since trends drive markets. Everyone has a vested interest.

Ultimately, EJ's thesis seems to be right over the long haul, or I believe so, otherwise I'd stop coming here. He's not right on every call, though. Have a look at Munger's comment and EJ's write-in via FRED. I'm not sure I understand the response.

[bpr]

Re: You're not going to believe this - Eric Janszen

As you say Munger - "whatever" if possibly ka-Poom timing was wrong, it doesn't make it untrue. End of Story.

In an academic sense, you're right. But in the real world, if you were shorting real estate in 2005 you were just plain wrong.

You can know exactly what's going to happen and how it's going to happen, but if you get the timing wrong, you're wrong. End of story.

[Alvaro Spain]

Re: You're not going to believe this - Eric Janszen

That's fine. But whatever the story is now was not the story back in 2007. A prediction is not worth much when it changes as things play out. I also seem to remember posts like "ka - here we go" back in 2007/2008. But whatever.

Not that I am not all for updating as new information comes in. But to call ka poom theory as it existed in 2007 100% accurate is not truthful.

What you say is interesting. If I have correctly understood Ka-Poom theory, inflation will be the consequence of foreign dollars being sent back to the USA. That is, foreign countries selling their USA treasuries.

The last stock market correction has demonstrated that USA treasuries are still a safe haven. It looks difficult to envision how the dollar will be rejected soon. S&P has recently downgraded the country debt and USA treasuries have gotten bought and the dollar hasn't fallen in value.

As long as the dollar is the reserve currency of the world, inflation will be mild?

[LargoWinch]

Re: Yet more amusing emails between EJ and Mish

I hope he's right as I fear hyperinflation's disruptive effects more than a bad economy.

EJ has never forecasted hyperinflation. Not once.

Mish, by framing the debate as either deflation or hyperinflation as if there was no alternative, shows how limited his knowledge of history and financial markets really is.

[metalman]

Re: You're not going to believe this - Eric Janszen

Here's a theory: jealousy. EJ mentions repeatedly the "popularity" and high traffic that Mish's site gets. He recognizes this and rationalizes it by saying that "...my site will always be less popular than yours..." because the content is not for general consumption, much like the grapes were not for fox's consumption. It's important to note that EJ is always the one mentioning traffic and popularity here.

steveaustin2006's post is illuminating, because I know little of Mish, except that I read him regularly for a few months until I found Itulip:



But in this email exchange, it is EJ who comes of as covetous of traffic and popularity.



Well put. Everyone wants to be right and recognized as such. In the area of economics, they want to be widely recognized. The more widely recognized, the more right, it seems, some times, since trends drive markets. Everyone has a vested interest.

Ultimately, EJ's thesis seems to be right over the long haul, or I believe so, otherwise I'd stop coming here. He's not right on every call, though. Have a look at Munger's comment and EJ's write-in via FRED. I'm not sure I understand the response.

here's a theory... ej is tired of mishmash the liar using his platform to lie about ej & his own record over & over & over & wants mishmash to stfu & stop lying?

where does ej say he's 100% right about everything? only 100% right re deflation... the topic of the article... that mishmash lied about ej in... again.

you can always tell the mishmash fan... they believe 9000 crap things... worried you might be one? here's a test...

is gold 'real money'?

[LargoWinch]

Re: You're not going to believe this - Eric Janszen

In an academic sense, you're right. But in the real world, if you were shorting real estate in 2005 you were just plain wrong.

You can know exactly what's going to happen and how it's going to happen, but if you get the timing wrong, you're wrong. End of story.

Such pearls of wisdom here bpr: "if you get the timing wrong you're wrong". In fact, even early on a trade you may make money, it all depends on your investment horizon and how long you can sustain your positions. So no, even "timing wrong" doesn't mean "you're wrong". Let me give you a very simple example: say I was short AIG in 2006, was I wrong?

More importantly, are you implying that the ka-Poom process timing is wrong? If so, prove your argument instead of making empty statements.

[theoakman1]

Re: You're not going to believe this - Eric Janszen

Mish pimped out his "Hedged Growth" fund in Feb 2009 when he was screaming with the deflation nonsense in full force. Since then, that fund has lost about 25%.

http://www.sitkapacific.com/files/Si..._Portfolio.pdf

It takes some real talent to lose money while the Dow & S&P rallied over 70% from that point in time. And it's not like Bonds were losing money either.