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Two Contrarian Trades for the Coming Decade

January 28, 2010 by  

Two Contrarian Trades for the Coming Decade

United States stock markets have just come off of their worst decade ever, with inflation-adjusted returns in the S&P 500 dropping as much as 30 percent. That’s a far cry from what investors were expecting at the turn of the millennium. Then, the Internet was creating paper billionaires overnight.

Fast forward 10 years and Nasdaq is still 40 percent below its peak. In addition, the Pew Research Center just designated the past decade as the “worst in 50 years.”
 
But, just as there was a technology bubble in 2000, today there is also a strong “pessimism bubble” about the U.S. economy over the coming decade. And like all bubbles, this one will eventually pop—as will the rising China bubble. Understanding this is the key to ensuring you don’t end up like investors who have spent the last decade waiting for Cisco to “get back up to $80.”

Rarely has the global stature of the U.S. been lower than it is today. A recent Washington Post/ABC poll found that 61 percent of the American people think the U.S. is in long-term decline. In another poll, 44 percent of Americans said that China was the top economic dog in the world, compared with only 27 percent favoring the U.S.

Much of the investment world holds the same opinion. In fact, the world’s top hedge fund managers are piling into gold, betting billions that the U.S. dollar is toast. Meanwhile, 17 percent of the U.S. workforce is unemployed, underemployed or has stopped looking for work.

And that’s music to the ears of contrarian investors.

Contrarian Trade #1: Buy American
After the financial meltdown of 2008, the greatest contrarian trade in the world became a bet on the U.S. But that’s exactly what I’m doing by shifting my own money and my clients assets back into the U.S.

First, investment is a game of expectations. Or as Bill Browder, formerly the largest investor in Russia, pointed out, Russia doesn’t have to turn into Switzerland for him make money. It just has to turn out better than people expect. In 1998, an investor I met in Russia said that he’d rather eat nuclear waste than invest in Russia. Yet, had he invested there, he’d have made 60x his money, just as Browder and his investors did.

Second, having lived abroad since 1991 has only strengthened my conviction that the global economy largely runs on U.S.-generated ideas. (This is not, as you can imagine, a popular position). The American Academy of Sciences estimates that 85 percent of economic growth in the U.S. is now produced by new ideas. In 2007, companies that were founded by entrepreneurs backed by venture capitalists provided 10.4 million American jobs and generated $2.3 trillion in revenues. That’s equal to the gross domestic product (GDP) of France.

Nowhere is the power of ideas more evident than in the case of decidedly unsexy U.S. manufacturing. On one hand, the media bewails that the American manufacturing workforce has shrunk by more than 40 percent since its peak in 1979, with 6 million of those job losses taking place over the last decade. But thanks to innovation and advances in technology, U.S. manufacturing output per worker recently hit an eye-popping $234,220 for each of that sector’s 11.6 million workers. Workers today produce twice as much manufacturing output as their counterparts did 20 years ago and three times as much as in the early 1980s. The U.S. steel industry—left for dead in the 1980s—produces more steel today than it did 30 years ago.

Contrarian Trade #2: Sell China
If there is one surefire way to make quick money in financial markets, it’s to bet on bubbles popping. Noted value-investor John Templeton made his first fortune over a 40-year period by betting on the rise of Japan. He made a bigger and quicker fortune by betting on the dotcom bust in 1999. I believe we are smack dab in the middle of a “pessimism bubble” about the U.S., much like the bubble about Japan 20 years ago, the Internet 10 years ago and China today.

Twenty years ago last month, Japan’s Nikkei index reached its historic peak of 38,916. In 1989, Japan was No. 1, as U.S. business school students pored over Japanese language texts and studied Japanese management techniques. A mere decade later Japan had been long forgotten and the world was in the midst of another frenzied bubble called the “New Economy.” Today, Japan and the Internet have been supplanted by the “China Miracle.”
 
Everywhere you look you see serious experts earnestly predicting the decline of the U.S. and the rise of China. And they will give you incredibly cogent, well-argued reasons for why you should listen to them. Many of these arguments I agree with myself. But the next time you read predictions about what the world will look like in 10 years, consider this. The most widely recommended stocks 10 years ago were America Online, Cisco Systems, Qualcomm, MCI WorldCom, Nortel, Lucent Technology and Texas Instruments. MCI WorldCom and Nortel went bankrupt. And if you invested in a portfolio of the others that survived, you’d have lost about two-thirds of your money. If the fates of Japan and Internet stocks are any guide, a similar fate awaits your “China strategy.”
 
Unlike many of those pundits who are so certain about what the world will look like in 2020, I never took that class on how to predict the future, naively opting for a course on Japanese joint ventures instead. But the two themes I’d bet on over the coming decade are to buy the U.S. and to sell China.

For the sake of my financial future, I hope you disagree.

Nicholas Vardy

is best known for his unique expertise in global investing. He is the editor of Global Bull Market Alert, Global Stock Investor, and The Global Guru, a free weekly e-letter with more than 165,000 subscribers, all published by Eagle Publishing. He is also CIO of Global Guru Capital (www.globalgurucap.com) and founder of the London Junto (www.londonjunto.com), a regular gathering where leading London hedge fund managers meet to debate the top investment issues of the day. Mr. Vardy has been quoted in the Wall Street Journal, Newsweek, Investors Business Daily, MSN Money Central, AOL, Yahoo Finance, and CBS MarketWatch. He has also been regular contributor to the Fox Business Network and CNN International. He is a Chartered Financial Analyst and a graduate of Stanford University and Harvard Law School as well as a former Fulbright scholar.

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  • http://victorbarney@embarqmail.com Victor L Barney

    That is the purpose of Jesuit led “Roman Catholic Marxism!” Talk to me in November this year after the biggest “CRASH” in the history of the Stock Market! And, it will be blamed on the elections, so next year obama, again, can “restate” his roman catholic marxist agenda as the only solution! Again, these “Jesuits” came to america with the 2nd group of pilgrims! Jesuits also caused the civil war and it had nothing to do with slavery!

    • denniso

      Roman catholic marxism??? what the ‘holy’ hell is that!!?? So,now it’s the catholic marxists and not just Obama and liberals who are the enemies of the country? You are off the edge fella..

      • http://victorbarney@embarqmail.com Victor L Barney

        Talk to me again in November! There is not such organization as Jesuits, is there? What in hell do you think they do?

        • libertytrain

          good grief – well I’ll forget about all those great colleges and the other good things they have done – apparently they have had another agenda. And let’s not forget about the Christian Brothers – there must be something more to that brandy than meets the eye or is it the lips?

          • denniso

            Aren’t you usually on the other side liberty?

      • Anne

        Is/has anyone bought stock in AENY? If so/not, why?

    • Susan

      Ok Victor; So the Roman Catholic Church is NOW guilty Because they Believe In Christ Jesus Of the Holy Bible and Gospel of Jesus Christ is this what You are saying? You Need to GO back and read. IN MATTHEW 28; About THE CRUCIFIXTION, THE SUFFERING and DEATH and BURIEL and then the RESSURRECTION OF the ONLY BEGOTTEN SON OF THE LIVING GOD. JEHOVAH. make Ceratin you read Near the END OF the Chapter. WHERE A LIE WAS TOLD and MONEY GIVEN FOR THAT LIE. and TO THIS DAY! it has been written THE JEWISH STILL BELIEVE THAT LIE? all BECAUSE OF WHOM???? IF you READ and KNOW anything THE ROMAN EMPEOR AT THE TIME Was against. THE DEED. and WASHED HIS HANDS of THE MATTER. AND IT WAS GUARDS OF the PHARRISEES THAT WITNESSED WHAT HAPPENED. NOT ONLY THAT maybe YOU COULD READ MALACHI CH 4; About ELIJAH, That then Ref. John,You Might also read about the dead that wewre raised out of their graves. In Matthew Ch.27:

      Not just ROMAN CATHOLIC POPES AND PRIESTS have believed in the GOSPEL OF CHRIST JESUS. EVEN SOME HEBREW JEWISH people HAVE ALSO BELIEVED THE CHRIST JESUS OF THE GOSPEL. JUST NOT ALL JEWS have BELIEVED. COULD THEY BE THOSE that has been written about in Matthew. It was WRITTEN EVEN TODAY. TODAY has BEEN a WORD USED IN THE HOLY BIBLE not JUST THEN in Matthew also in HEBREWS. I am not a Catholic yet I resent the WAY YOU ACCUSE the ROMAN CATHOLIC CHURCH BEING a BELIEVER IN the RESSURRECTION OF THE RISEN CHRIST JESUS OF THE GOSPEL. BY doing SO you CONDEMN ALL THE CHURCHES OF BELIEVING IN CHRIST. You Might Give SOME thought that BEFORE GOD THE HEAVENLY FATHER CREATED THE EARTH. DID HE CREATE ANGELS? or WERE the ANGELS always WITH HIM from THE BEGINNING.

      Instead of making another post which I was about to do. But I read yours instead. SO I will say what I was going to add to my previous post. Because of what was written about JOBS, ECONOMY,and WAR AND SUPPLIERS TO OUR MILITARY. WE GET THE MACHINERY FROM PLANTS AND COMPANIES THAT MAKE THOSE. CATAPILLAR, AND OTHER FACTORIES. MANY HAVE BEEN SENT TO OTHER COUNTRIES RIGHT??? and amny of those same COUNTRIES STILL HATE OUR SYSTEM OUR WAYS AND US!!! WHY?? BECAUSE WE ARE A KNOWN FRIEND TO ISRAEL MEANING THE HEBREW JEWISH PEOPLE> ALONG WITH WE ARE TRULY BELIEVERS ANYWAY MOST OF US ARE CALLED AND DO CALL OURSELVES CHRISTIANS. WHY MAY I ASK YOU DO YOU CONSIDER YOURSELF A BELIEVER IN THE RISEN CHRIST JESUS AS THE ROMAN CATHOLIC POPE PRIESTS AND MANY PEOPLE DO?? or ARE YOU LIKE SOME DENY THE VERY GOSPEL OF JESUS CHRIST??? as for back to the subject of ECONIMIC CAOS AMERICA STILL HAS AN ENEMY AND SO DO THE JEWISH PEOPLE.. IT IS CALLED HATRED JEALOUSY AND ENVY.. BY WHOM???? I BELIEVE we have NOW NAMED these TERRORIST.. NO UNIFORMS, OF ALL COLORS, and ALL CULTURES BEGINING WITH WHAT AND WHOM THE PLO, TALIBAN, and ALQAIDA, and anyone else that SYMPATHIZES WITH THESE CALLED TERRORIST’S Please try to remember whom came here to learn from our FLIGHT SCHOOLS and STAYED LONG ENOUGH TO PICK a TIME THEY THOUGHT WAS RIGHT TO STRIKE THE WORLD TRADE CENTER AGAIN ECONOMIC, MILITARY, AND FBI. I believe it was CALLED THE TWIN TOWERS. WHERE NOT JUST AMERICANS CAUCASION AND DARK SKINNED PEOPLE WORKED.. THERE IS AN ENEMY OF whom????? out there. and I am very SORRY about that YET IT STILL makes it NO LIE. DOES IT? NEITHER should YOU CALL the GOSPEL OR HOLY BIBLE A LIE. BY DENOUNCING THE CHURCH OF THE FAITH OF THE CATHOLIC FAITH. OH and there were SEVEN LETTERS to SEVEN CHURCHES.. CHURCH OF PHYLIDELPHIA was JUST ONE. I guess You could call me a JESUIT BECAUSE I also believe in THE GOSPEL OF JESUS CHRIST Yes THE RISEN CHRIST. Some have been known to be called JESUS FREAKS, Does not mean we are wrong.. Could be we are just what we know we are. People that have sinned and only by HIS GRACE and HIS RIGHTEOUSNESS have we got salvation and HOPE. OF something MUCH better then this WORLD CAN BEGIN TO GIVE.. think about this sometime after reading again THOSE VERSES in the HOLY SCRIPTURES..

      • eyeswideopen

        Susan, you just happen to be the wrong kind of Christian for the radical right. Christian is Christian, Jesus didn’t declare that one sect would be held above another. We are all brothers in Christ.

        • denniso

          Hi Eyes…you should look into the other article,on Obama and Fox News..some pretty hateful stuff being spewed by supposed Christians. Good luck…

    • Dee G/

      Hurray, Victor!! You’re one of the very few that “gets it”! I, too, have studied the whole matter and you’ve hit the BULL’s EYE.

  • http://hotmail JD

    I read your article with interest. For some reason, I feel that China is overestimating their GDP numbers and that the days of cheap Communist Red China goods will become more expensive, and wouldn’t be surprised that American companies may turn to factories built closer to the U.S., such as in the Carribean, where the labor will be cheaper, and the shipping would less. I know some will talk about their infrastructure being inferior. Yet, that is what we use to say about China & Mexico. I believe in the past 20-30 years, we used China as a hedge against Japan, and China shouldn’t be surprised if other counntries would soon be used as a hedge against them.

  • eddie47d

    I would love to buy American. I look at every label I pick up and it’s rather depressing. We have CEO’s who make obscene salaries and if they don”t get their way they throw a fit. Then they threaten to go elsewhere. I say good ridance,and leave without your million dollar golden parachures and bonuses. The price of doing business in America is very expensive,so why should’t people go elsrwhere. Why do you think so many Americans bought foreign cars in the 70′s and 80′s.They were built better and lasted longer.We pay these CEO’shuge salaries for making inferior products.I do see some terriffic changes in American cars this year so let’s hope for the best.

    • DaveH

      Speaking of people making Big Money, how many of you out there make this kind of money?
      http://www.usatoday.com/printedition/news/20091211/1afedpay11_st.art.htm?loc=interstitialskip

      • eyeswideopen

        Dave, you did read this didn’t you? Bush pushed through a 3% for Jan-08 with another increase of 3.9% for 1/09 and Congress approved it. Obams on the other hand got 2% for 2010 the smallest amount since 1975 and has put a hold on all increases starting in 2011 to last until 2014. Let’s see Bush 6.9% for two years, Obama 2% for 3 years. You don’t like Federal employees to have decent salaries, but you have no problem with CEO’s taking our tax money to prop up their banks and give a bonus that is shameful?

        • DaveH

          The CEOs are engaging in productive activities. They employ the citizens in productive jobs. Government harrasses the producers, and takes a free ride on the shoulders of the citizens in the private sector.
          There’s no doubt in my mind who’s worth the most.

        • DaveH

          And judging by the responses I usually get from you, EyesWideShut, I have a hard time believing you read the article. Here is a sentence you probably overlooked:
          “The growth in six-figure salaries has pushed the average federal worker’s pay to $71,206, compared with $40,331 in the private sector”.
          Keep in mind the private sector (the productive sector) pays the salaries for the government workers.

          • eyeswideopen

            Dave,26% of the scientific workforce is employed by the government.Which drives up the salaries. Also the the Aerospace industry has driven up the average salaries. But I agree the Republicans have been very generous to the government employees, during the past 12 years they have made sure that along with the increases they increased the medical benefits. Since you hate government employees so much, does that include our military?

          • denniso

            It is rather amazing…rightwingers hate the gov’t and social programs like healthcare,but they love w/o reservation the largest socialized agency in the country,the military…700 billion $$ a yr in socialistic spending for the military and more for wars.The rightwingers never suggest that we privatize the entire military and that the military are gov’t leeches on the free market…why not?? why not turn the role of defending the country over to private corporations? If we love all free enterprize and if it always works better and more efficiently then why continue w/ a bloated and inefficient gov’t program like the gov’t military??

          • eyeswideopen

            denniso, they already did, it is called Blackwater. Wonder who owns stock in that company? lol

  • Geoff Pace

    I don’t want to burst this young author’s bubble, but I think he’s been away from home too long over there in Jolly old England. Let me explain a few facts of life:

    Contrary to his glowing report that we are producing more steel in America than we did 30 years ago- consider this: I live in the area of the USA where the LAST steel mill was dismantled and sold to China for scrap about 7 years ago: namely; Geneva Works (The old USS Steel Corp)owned by BMT Technology or the Cannon brothers . Joe ran for the Senate and lost, and Chris ran for congress and won until they ran him out of office two years ago.

    So get your facts straight, buster, before spouting them off to the world to see. This has left a very sore spot in our economy here in the Inner Mountain West (aka the Wasatch Front)

    Chase your windmills elsewhere Don Quixote.

    • steffan61784

      To Omateo Anahuac: you are naive to perceive all conservatives as devoutly religious. I am sceptical of religion myself, but I do believe that, in this country, it manifests a sort of order. As much of a fool as Karl Marx was, I do agree that it is an “opiate of the masses.” Nevertheless, Christ was a communist insofar as his utopian views of wealth redistribution. I understand that Native Americans were unfairly persecuted (and I sympathize with you on that behalf), but you live here and you will be effected by economic downfall. Nobody is immune. Your rhetoric loosely reeks of Marxism, and “starting over” always leads to genocide that would DWARF anything that approaches what the EARLY United States inflicted. Wise up, be productive, stimulate small business, and reject large government.

  • Ometeo Anahuac

    Everything that is happening is so funny to me !
    I really can’t wait until this tin can illusion called America collapses from the inside out because of the greed and fake Christianity that has been spawned in this unholly place ever since manifest destiny displaced hundreths of thousands of the native population into reservations and early graves…
    All you so called Christians on the right are the most dispicable and fake people in this country …on one hand worshiping a benevolent man who gave free healthcare to undesirables and on the other hand siding with insurance companies and oposing universal healthcare … I just ask you one thing, what would Jesus do? But that’s a whole ‘nother story , we are talking about the financial crisis America is facing I say it is allbad karma coming back to all of us Americans for the genocidal murders of natives, the cruel usage of slaves to build this godforsaken country by fake god fearing individuals including the so called forefathers who dident have the insight to realize that all people -black or white or brown were created equal. Now eveyone is worried about the future of this illuminati Masonic funded country, but iam truly happy to see it all going down the drain. I hope the whole system colapses so we can really start over from a more humble position.

  • steffan61784

    Ofcourse the U.S. is a mixed economy! However, private entrepreneurship has to be an overwhelming leader in how we conduct economic business. Light regulation can be beneficial insofar as it prevents corruption. Our recent crisis had its roots planted by the Carter administration, and accelerated by George W. Bush’s fiscal socialism (I am a true conservative and I see through those who claim to be one thing yet are really another). When the government runs too much of the economy, the result is complete and utter collapse of the government itself. Ruling at gun point inevitably fails. Yet, even Lenin in the Soviet Union understood that in order for his despotic totalitarianism to take root, elements of a market economy had to take root. Hence, he formulated the N.E.P. (new economic policy)- the results of which created a standard of living that were unmatched in the Soviet Union until the latter half of the 1900′s (yet, the regime still inevitably failed). Remember, Stalin repealed the N.E.P., introduced two dual “five year plans” that economically re-armed the U.S.S.R. but also treated its people like cattle and set the stage for mass murder. Ironically, even the slight trace of capitalism made the Soviet Union better than anything government intervention could have given it. However, Lenin’s version of “increased standard of living” was nothing compared to countries that allowed even more private entrepreneurship….

  • Johnnyrite

    You write: Contrarian Trade #1: Buy American?
    Wow, too bad they didn’t have polling back in 1932! It would have told you to ignore all the negativity and to fly in the face of that and dive deep into the stock market. Just one problem. America was right to be negative in 1932 — the real smash-up was still ahead. And in case you were wondering (btw, I see very little research into you claim other than “be a contrarian”, the Dow Industrials didn’t get to their 1929 inflation adjusted highs until the early 1950s. That gave contrarians 20 years to go broke betting against the market.

  • James

    I agree, the stock market hasn’t seen its bottom yet, and the recession hasn’t its depression yet. The DJIA reached its peak just under 14,000 then collapsed to just under 7,000. Since then it has recovered just over half of that loss, just last week, to 10,725. The next three days were increasing downers, with the DOW closing on Friday at 10,173. From here, the DOW should trail off to around 5,000. I believe the only reason it went as high as it did, was because the U.S. Treasury was shoveling money into it.
    These bailouts, buyouts and unemployment compensations make the economy look better than it is, but doing that on borrowed money is either insane or diabolical. Let the reader decide.

  • denniso

    Let’s see, the great depression was the largest economic collapse in history and was truly global. Also, the repubs, starting w/ Hoover wanted the ‘free market’ to recover on it’s own so left the economy mostly on it’s own for 3 yrs,to sink deeper into a total malaise,both the biz community and the public’s mindset. Then the repubs fought Roosevelt tooth and nail(sound familiar)for the next several yrs as he and the Dems tried to rally the nation and economy. Not surprising that it took until 1941 for the economy to get going.
    If you had invested in the Dow a yr or so ago when it was down to 6600,you would have made 65% or so on your money…a good ‘contrarian’ investment,wouldn’t you say? The public was panicked into fleeing from the market and many lost even more money by doing that. When Limbaugh and others constantly ‘talk down the econnmy’ in an attempt to destroy Obama,they are doing a major disservice to the entire country,even themselves,because as most smart people know,the attitude of the consummer is a fundamental part of our consummer driven economy. I call Limbaugh and the other negative blabbers traitors for their effort to deflate the economy,which adversely affects every man,woman and child’s well being in the country.

  • denniso

    Look at a graph of our economy before gov’t got more involved in things like unemployment compensation and then tell me that gov’t shouldn’t be involved in trying to regulate and moderate the economy. All economists who are not ideologically driven agree that a ‘free market’ doesn’t work in any sort of long run. Some of the best economies in the world have MORE gov’t controls and involvement than we do.
    You can thank the gov’t for keeping this recession from becoming an even larger depression than ’29 was. Gov’t jobs that are secure,gov’t pensions,social security,medicare/medicaid,unemployment,VA benefits,food stamps and more are the only reason we still have a reasonably stable economy right now. Get everyone to buy gold and dry food and head for the hills and see what the economy does.

  • Robby Bonfire

    Oh really – Roosevelt and the Dems tried to rally the nation and the economy? You forgot to tell us how – primarily by confiscating the people’s real store of wealth, our gold bullion, as soon as Roosevelt came into office in 1933; and when his screwed-up work programs failed miserably, he baited the Japanese into launching WW2 in the Pacific by cutting off the supply of oil we had been supplying them. This, of course, revved up our economy and all for just the cost of countless lives and suffering on both sides. How wonderful it must be to be a Democrat first and and American as an afterthought. Honesty and reality never impinge your day.

  • oooguruk

    Read a little history. Since the Fed was created we have never had a truly “free economy”. The government has messed with it ever since and both the DEMs and REPs are guilty. Free markets alwasy self correct. The government is great at causing the problems then come riding in with the “solutions”, which cause more problems and we go ’round and ’round.

  • N

    You got it backwards. The economists who think free markets don’t work are the ones who are ideologically driven. oooguruk is on target.

  • DaveH

    Another typical Liberal comment by Dumniso:
    “All economists who are not ideologically driven agree that a ‘free market’ doesn’t work in any sort of long run”.
    And you know that how, Dumniso?
    You must think you’re talking to Liberals who are ignorant enough to buy such unfounded statements.
    Anybody here who has experienced Big Government meddling for the last 40 years can attest that there has been no Free Market for a long time and yet here we are in a very Big Economic Mess.
    Maybe I should just start making up facts like Dumniso.

  • Susan

    Throughout the years. My Husband and I never Bought into the game of Stocks and trade or Bonds or anything. First of all having a family kinda inhibits buying into things that may be making money only until something like a bust happens. As in 1929 people lost everything. and many just committed suicide because there was just nothing left to even live for especially for those that were of older age and had no hope left for starting over again. TO LATE for that. As Far as The economy taking a turn for the better. FOR AMERICA.. guess what. 1941 We went into a war. Which that made Jobs being taken by many that were not GONE fighting that war. MEANING WAR VESSELS, and AMUNITION and SUPPLIES OF ALL KINDS even FOOD had to be made available HOW MUCH MONEY WAS SPENT and EARNED THEN?? TODAY??? NONE ARE spending any money because they do not have any to spend.. and NO JOBS THAT SUPPORT OUR MILITARY EITHER unless OF course all are overseas making all they NEED >> and WHOM then GAINS THE N BENIFIT OF SUPPLING OUR MILITARY by EARNING MONEY DOING IT and WE HERE SIT BROKE??? SEE what SENDING ALL THE FACTORIES OVERSEAS HAS accomplished in the past HOW MANY YEARS? and GUESS WHOM IS IN THE HOLE and OWES MONEY TO WHOM?? WE should be GETTING OUR MONEY V BACK FROM THOSE whom have TAKEN IT FROM US.. YET whom allowed this to happen in the first place? Whom are ya going to Blame when WE THE PEOPLE HAVE BEN ASLEEP AT THE WHEEL and allowing it to happen BY not WATCHING and PAYING ATTENTION?

  • TIME

    BubbaO you forgot a little thing called World War II thats a 2 just so you get it. With out it guess what, FDR would be in the same bubble as you strange little Crack world.

    Hey BubbaO have you ever though about moving to Cuba? I think its just right for you, hang out with the Castors Bro’s.
    Hey guess what they have a great Health care plan too, its called a 9mm to the back of the head.
    Cost zero dollars! How can you bet that its a social plan.

  • DaveH

    OMG,
    FDR presided over 10 years of Depression. And this Donkey Denniso talks about the Republican Free Market Failure?
    Okay, I guess if you’re a brain-dead Liberal you might be able to convince yourself that 10 years of Depression at the hands of a Big Government Lover proves that the Free Market doesn’t work.
    I guess the only way we could prove to these Donkeys that their policies don’t work is to let our country be run by them for 60 years (how long it took for Russia to come out of their coma). Any Takers?

  • Susan

    That is another thing How did it ever get rummored that Pearl Harbor was planned ? JUST LIKE the Government was and has been accused of bringing down the twin towers ya right!!!! IDIOTS. Don’t get me angry over the Holy Writ.. see ya all maybe later.. maybe not.

  • MICHAEL

    Same here in Southern California, Kaiser Steel was once one of the biggest producers of steel in the world, they even mined their own ore has been bust for about 20 years. Kaiser Steel supported thousands of workers, but now it is gone. When I read that the U. S. is now producing more steel than it did 30 years, I took it with a grain of salt. It may be true, but if true, where are the companies that are doing it? Buying cheap products from China makes us temporarily wealthy, but in the long run, we wake up with no technology, having given it away to set up overseas manufacturing plants, and no jobs. It is better to pay higher prices and manufacturer here in America using Americans. That also means that importing illegals to the jobs we normally would do also does not work and only causes even more problems in the long run.

  • eyeswideopen

    DaveH, can you please name a country who has what you consider a true “free market”. Also, can you name a country who hasn’t incorporated new regulations to prevent another crisis like what we just experienced?

  • denniso

    You mean like how we let Cheny/Shrub run the country for 8 yrs and watched them drive the economy into the ground and light the world on fire? Good point DaveH.

  • denniso

    The Fed was created in response to an earlier financial crisis in an attempt to avert another,brought on by the ‘free market’. You could read a little more and stop getting your info from bozos like Limbaugh or Savage.

  • denniso

    Susan…don’t let the idiocy run you off. That’s what the worst of these people want. We should confront them on these absurd statements and we need more sane people here. Thanks,either way.

  • James

    Susan, You should read “Day of Deceit – The Truth about FDR and Pearl Harbor”, Robert B. Stinnett, (2000). It fully documents the ten major steps (formulated by a high ranking U.S. military officer) that FDR took (in a period over a year) to provoke Japan into attacking Pearl Harbor. Mr. Stinnett spent nearly 20 years of his life to accummulate this informantion, he documents names, times, dates and places.

  • James

    Susan, Pearl Harbor wasn’t ‘planned’ it was provoked by FDR. At the time, Japan had invaded China and had no intentions of attacking the United States, even though they were allied with Germany and Italy. Another book that documents this is: “FDR – The Other Side of the Coin – How We Were Tricked Into World War II”, by Hamilton Fish, LL.D, Reprinted by Life and Liberty Publishing in May, 2005.
    Hamilton Fish was FDR’s neighbor in Duchess County and his Representative in the House of Representatives. He always spoke admiringly of FDR until he learned of his complicacy in the attack on Pearl Harbor. The above comment, by another, about the total oil embargo FDR placed upon Japan was the tenth step that left Japan with no other option but to attack the U.S. Japan doesn’t have any domestic oil supply.

  • denniso

    OK, find more than 1 or 2 recognized economists around the world that believe in totally ‘free markets’….Michael Savage and Limbaugh don’t count.

  • denniso

    He can’t name any,except maybe some of the gulf-oil states,but they derive their wealth from a fixed oil market. Most,if not all, developed countries have a blend of gov’t control and free markets, including the wealthiest and highest quality of life countries. It’s obvious to some of us that it’s because totally free markets are and illusion and don’t work for the long term. They essentially devour themselves in a frenzy of greed and corruption.

  • DaveH

    The Crisis was created by the Big Government you blindly accept as the solution.
    http://reason.org/news/show/the-housing-boom-and-bust

  • DaveH

    Here’s another:
    http://mises.org/story/3572

  • DaveH

    Here is a list. you can do your own research. I’m not interested in doing your homework for you. If you want to swelter in ignorance, be my guest:
    http://www.heritage.org/index/Ranking.aspx

  • denniso

    I see by your list that Canada has more ‘economic freedom’ than we do,at least as defined(what parameters we aren’t told)by the conservative Heritage Foundation…so what does that say about the fact that they have universal healthcare,something that you and other rightwingers say will enslave us???

  • eyeswideopen

    Dave, not asking you to do homework, trying to figure out what you consider “free market” so I can compare what i’m reading in Sowell’s book. I thought you goal here was to educate? I can’t find any countries who aren’t putting major banking regulations into effect. Thought you might know of one or two, wanted to look at their fiscal health, compared to ours.

  • denniso

    There are plenty of countries on DaveH’s list w/ supposedly less economic freedom than us and their economies are doing as well or better than ours…and like eyes said,all of them are enacting stronger financial regs.

  • http://FairTax.org HDsuperB

    TAXING SYSTEM THAT WILL GET RID OF THE IRS, FUND ALL OUR PROGRAMS, CREATE ECONOMIC STIMULATION, AND DID I MENTION ….GET RID OF THE IRS??? THIS IS NO JOKE! CHECK IT OUT…GO TO FairTax.org AND YOU’LL BE AMAZINGLY SURPRISED AT WHAT FAIRTAX WILL DO FOR US, ONCE IT IS IMPLANTED. WE NEED TO GET RID OF THE THUGS THAT LIE AND STEAL FROM US AND GET SOME ACCOUNTABILITY AND TRANSPARENCY FOR OUR HARD EARNED TAX DOLLARS! LET’S TAKE CONTROL FOR A CHNAGE AND STOP FIGHTING AMUNGST OURSELVES. IT DOESN’T FIX THE THE PROBLEM. GO, GO, SEE FOR YOURSELF…WE OWE IT TO OUR CHILDREN!

  • DaveH

    Bush was only a little less Liberal than you. That must be your problem. All that sexual tension.

  • denniso

    You appear to have lost your mind,or whatever it is.

  • steffan61784

    This is a reply to deniso: read a text written by a fellow with the last name of Folsom entitled “New Deal or Raw Deal.” It is an honest inspection of Roosevelt’s New Deal. Basically, the numbers do not lie: the New Deal was almost a complete disaster. FDR’s vision of economics only temporarily created jobs, and by about 1938, increased joblessness to over 22%! Even Henry Morgenthau finally had to admit that the policies had failed. Biased authors can say what the will, but the numbers DO NOT lie: FDR was an economic disaster. Results matter, charisma does not. By the way, the democrats had a large majority through most of the 1930′s, so Republican “haggling” did not matter in the first place. Roosevelt made too many enemies through his arrogant politicking. SOUND FAMILIAR??

  • steffan61784

    Another thing: I agree that Roosevelt did not “plan” Pearl Harbor. That would have forced him to forfeit his pseudo-war with “big business”, because we are all aware of the military-industrial complex. However, consolidating the U.S. navy into one concentrated spot demonstrates less conspiracy than it demonstrates, once again, F.D.R.’s complete incompetence.

  • steffan61784

    Lastly, to all those who condemn Michael Savage: “Liberalism is, and always will be, a mental disorder.” Wake up and smell the “tea”: socialism, F.D.R.’s legacy, and Obama are falling by the wayside. Real, competent America will return, despite mainstream media corruption. Maybe Keith Olbermann will be lucky enough to become a shoe salesman. Heck, it worked for Al Bundy, right?

  • Amosbanjo

    Has anybody heard of the Depression of 1920-21? Probably not. Why? Because government stayed out of it and the economy recovered in ONE YEAR. Duh!

  • denniso

    Savage is sick and it says something about you and others who are making him wealthy listening to his hate and lies…I pity people like you…

  • TeresaE

    Once you state, “The U.S. steel industry—left for dead in the 1980s—produces more steel today than it did 30 years ago.” you lose ALL credibility.

    I just did FIVE minutes of research and found EXACTLY what I needed to repudiate this blatant misrepresentation.

    According to the American Iron and Steel Institute, yes, we are producing more steel than in points during the 80s. BUT, the 80s were DOWN by nearly a third from the 70s.

    Added to the FACT that the industry has but a sliver of their former American employees and I now have to question any assertion made in this article as you used an obvious misrepresentation of facts to make a point.

  • James

    Steffan61784, In the two week period prior to the attack on Pearl Harbor, FDR ordered a newer aircraft carrier to Wake Island with its support ships and another newer large vessel to San Diego. Neither of these reached their destinations before the Attack, and were ordered back immediately but didn’t get there until long after the attack was over. In that same two week period, FDR ordered all commercial ship traffic rerouted to the South Pacific, naval intelligence had broken the Japanese code months before, and FDR knew the Japanese war fleet was approaching from the north. I have at least six books on this subject and could add more proof of FDR’s foreknowledge of the attack if you like.

  • denniso

    We haven’t heard of it because it wasn’t a depression..it was a mild recession and gov’t has never been entirely out of the economy…land giveaways to the railroads,forests given to logging co’s and more,going back to the beginning of the country. It’s a myth that gov’t hasn’t been involved in the ‘market’,the way it has usually been involved is by giving public resources away to big business.

  • denniso

    ‘Japan had no other choice but to attack the U.S.’??? Now that’s letting Japan off the hook and finding a way to blame another Dem president. I wonder if you also think we tricked Hitler into starting WW2?? And,maybe we shouldn’t have gone to Britain’s and Europe’s aid and let Hitler have them??

  • James

    Denniso, you’re being silly. FDR did those provocations because Americans were overwhelmingly (over 80%) against another world war in Europe. Prior to the oil embargo on Japan, FDR had a cruiser bait German subs in the Atlantic, in an attempt to have Germany fire the first shot at us, but Hitler had ordered his subs not to fire upon American ships unless they were fired upon. Whether Hitler was more evil than the Soviet Union, doesn’t alter those historical facts.

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