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International Business Machines Corporation Message Board

  • buffett_graham buffett_graham Dec 7, 2013 9:23 AM Flag

    Nobel price winner see Recession in 2014

    Front page of Yahoo finance....why??? Because of debt deficit on both side of Atlantic....QE $85B per month money should have been used to cut the deficit...instead....not pumping Wall Street....and congress leader???

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    • debt deficit has existed for 50 years on both sides of the Atlantic. Yahoo needs to update their braintrust.

    • Do you think he won it on The Price Is Right??

    • i would say that's he's spot on with his theory ... the fly in the ointment is that ANYONE who tries to time
      markets is a fool , the fact that he adds 2014 to his thesis , means his words are junk to me ......
      Do you remember back in '06 ?? when Motley Fool would have articles about being prepared for the next
      big crash ? they NEVER said when , matter of fact they said that it might be 20 or 30 years off, but iterated
      without impunity , that it will come ... guess what ? it did come .. Fama's recession will come also , and moreover
      tremendous inflation .. when ??? might not be until 2030 .... the real message should be that no matter what
      the climate is , it is very prudent for all investors to be prepared as though a collapse is a the threshhold .
      be a good Boy Scout ... BE PREPARED ... G

    • No, he doesn't SEE, he says the possibility STILL exists - just like it did in 2013.

      Fama indexes all his investments and believes that the market is efficient, so he's not saying he's bailing on stocks and bonds.

      What he's saying is that "there MAY come a point where the financial markets say none of their debt is credible anymore and they can't finance themselves," which means they may NOT.

      "IF there is another recession" Well IF you believe that there WILL be another global recession, you need to liquidate all your holdings and wait until it hits and buy low. Of course, IF there's NOT another one, you'll be out of the market, which, as Fama notes, is efficient. You may be waiting for years for a global recession that never comes, while inflation eats away at your cash.

      What to do? If you believe that Fama's warning is gospel and that his investing strategy is sound, then index all your holdings and get the total market return, reinvesting the dividends, which will allow an accumulation of more shares at the cheaper recessionary price; like Fama.

    • STOCKHOLM: One of the three Americans who won this year's Nobel prize for economics said bloated public deficits on both sides of the Atlantic meant that recession remained a real risk for 2014.

      Eugene Fama, who shares this year's 8 million crown ($1.2 million) prize with Robert Shiller and Lars Peter Hansen, said on Saturday that highly indebted governments in the United States and Europe posed a constant threat to the global economy.

      "There may come a point where the financial markets say none of their debt is credible anymore and they can't finance themselves," he told Reuters in the snow-covered Swedish capital, where he will receive his prize on Tuesday.

      "If there is another recession, it is going to be worldwide."

      Fama, who has been called the father of modern finance and shared the economics prize for research into market prices and asset bubbles, played down this week's strong US labour market data.

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