This is Bush's recession, his legacy ... A classic 12-act tragedy

[RedEarth]

ARROYO GRANDE, Calif. (MarketWatch) -- The buck stops here: This is Bush's recession, his legacy.

It could be a chapter in a future edition of Jacob Weisberg's "The Bush Tragedy," with new comparisons to "Henry V" and other great Shakespearean tragedies. In a few sentences, the opening lines could highlight why this is now Bush's recession, and his alone.

Last week Bush told reporters: "I don't think we're headed to recession." But when one tried to puncture the denial, mentioning that America's energy analysts were predicting $4 gas, our oil-man president stopped him: "Wait, what did you just say? You're predicting $4-a-gallon gasoline?" No, Mr. President, experts are. "That's interesting. I hadn't heard that."

Once again, as in a classic tragedy, crucial facts never quite make it to the king's chambers in time, setting the stage for a fateful turn of events, propelling the plot to its tragic climax.

...........

This is Bush's legacy, an economic disaster no one can stop. And the more they try, the worse it gets.

Over the top? You decide. Then after you read Roubini's dark 12-act plot, we urge you to rethink your investment strategies for the years to come. Why? He warns: "The current recession looks fundamentally more severe than the two for three reasons: we are experiencing the worst housing recession ever in U.S. history; a shopped-out, saving-less and debt-burdened consumer is now in financial trouble and retrenching; and we have a severe systemic financial crisis.

Forget about Washington's happy-talk about avoiding a recession. They got us into this mess and don't know how to get us out.

You must read Roubini's dramatic plot, it's pure Shakespeare. Then add a comment: Tell us what you're doing to protect yourself. Worried you're just a "bit player" in Bush's recession? How this 12-act drama plays out will have an enormous impact on your future:

1. Home prices will fall 20% to 30% from the peak

..........11 more at.....

http://www.marketwatch.com/news/story/tragedy-recession-its-bad-ending/story.aspx?guid=%7b5D72D7E3-76BB-4CAB-B4D0-60F87DA734B7%7d&print=true&dist=printTop

.....and ...........

11 reasons Bernanke's recession lasts till 2011
Timing the next bull: Kick-start it in 2008? Or is it a long secular bear?

By Paul B. Farrell, MarketWatch
Last update: 7:32 p.m. EST Feb. 25, 2008

ARROYO GRANDE, Calif. (MarketWatch) -- Remember that hot 1973 Stealer's Wheel song marking the end of the Nixon era? "'Cause I don't think that I can take anymore. Clowns to the left of me, jokers to the right, here I am stuck in the middle with you!"

It's still a perfect metaphor. Testifying before Congress: Fed Chairman Ben Bernanke on the left. Treasury Secretary Henry Paulson on the right. The American public stuck in the middle.

........

Read the new InvestmentNews, a professional journal for financial advisers. The lead headline grabs you: "Bad times for stocks could last many years." A long secular bear.

Do you believe it? That's the big question today: When's the next bull? How long will the bear last? And forget Washington's rhetoric about "no recession." The truth is, you can call it a "bear," "slow growth," a "downturn," a "recession" -- call it whatever you want. Timing's the real question. How long will it last? When will it bottom? 2008? 2011?

Test your timing skill. You tell us, what'll drag this out 30 months, like in 2000-2002? Or shorten it? Here are 11 critical factors for your timing equation, things that could make this bear-recession shorter or longer. You tell us. Add a comment. What's your prediction: How long before the next bull?

1. Stagflation: Bernanke's no-win Achilles heel

http://www.marketwatch.com/News/Story/bernankes-recession-here-11-reasons/story.aspx?guid=%7b39D13A23-5028-4976-9883-BB1975099038%7d&print=true&dist=printTop


.......and......

Bad times for stocks could last many years
Relatively high P/Es do not bode well for big long-term gains

By Dan Jamieson
February 18, 2008

Is a secular bear market upon us?
Some market watchers think so. They say advisers should prepare clients for a long period of choppy market returns that will include significant declines as well as shorter-term rallies.

These pessimists say the numbers just don't add up for investors who expect to achieve historical returns on stocks over the 10- to 20-year period that typically defines a secular bear market.

Contraction of price-earnings ratios could cause stock market returns to shrink, regardless of corporate earnings, these bears say.

Most bull-market phases end with a market P/E of 25, said Ed Easterling, president of Crestmont Holdings LLC, a Dallas-based investment firm. He is also president of Crestmont Research, which produces research on market trends.

And most bull phases begin with market P/Es under 10, according to Crestmont Research.

The last bull phase ended in 1999 with an unusually high P/E of 42, but the P/E of the S&P 500 stocks remains relatively high at around 20, said Mr. Easterling, who is author of the book, "Unexpected Returns: Understanding Secular Stock Market Cycles" (Cypress House, 2005), which outlined the case for this being a secular bear market.

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080218/REG/859060286&template=printart

[Richard Steele]

1. K&R

[Deny and Shred]

2. Our only hope is to wrest public opinion from the MSM.

Until then, some Rove clone will convince joe 6-pack that the past three years (using the 2011 timeframe mentioned) are all Barack or Hillary's fault, and Joe will eat it like a downer burger.
Macro-economically speaking, the US economy hasn't seen these kind of red flags in our lifetime. Gone are the time when the manufacturing base could be reconfigured, that US education meant our workforce actually was the most flexible and productive, or that the dollar was the dominant currency that could exert pressure in terms of import/exports.
What we have is voting power in IMF/WTO and a bunch of Multi-national corporations that are still HQed in the US, but probably won't be in the next decade or two. The DOW looks good until they move offshore, or to Dubai.
We'll have a deep national debt that will continue to put downward pressure on the dollar. What has been a 20th Century cakewalk for US business will be a dogfight. Once Oil is priced in Euros, the dollar will send us globally into an trade fight to which we're unaccustomed, and ill-equipped. Good thing Bush has us pushing everyone else to militarize.

Pardon me, I'm a couple glasses of wine into the evening, and feeling my cynical side. Something tells me by the time that bill is due he and Cheney will be here. Check out these pictures :

http://globaleconomicanalysis.blogspot.com/2008/02/where-is-all-oil-money-going.html