Posted on 07/20/2005 12:54:47 PM PDT by Heebert
In a recent interview on CNBC with Ron Insana, one of the "old-timer" funds manager, Julian Robertson, predicted "utter global collapse" as a consequence of the bursting of the world-wide property bubble.
Often called "Never Been Wrong Robertson", the former head of Tiger Management (once the largest hedge fund in the world), is extremely worried about the speculative bubble in real estate.
Specifically, he is very worried about a world that is sustained by American consumer spending which is in turn 1/4 sustained by a property bubble. He predicts that 20 million people could lose their homes once the property bubble bursts.
Even more worrisome, he thinks central banks around the globe out of desperation will try to re-inflate the world economy with more liquidity that will create an inflationary spiral unseen in the economic history of mankind.
"Where does it end?", Insana asked Robertson. "Utter global collapse," he answered. But not just economic collapse ... collapse of epic proportions. Collapse and disintegration of all infrastructure, including government. Inflation will run into the double and triple digits. "Food production will fall. People will be carrying around U.S. dollars in wheelbarrows like Germany," he said.
There will be "total collapse of public infrastructure. Total collapse of medical care systems. All public pension plans, Social Security will collapse. All corporate pension plans will collapse."
"The American consumer is effectively now supporting the rest of the planet," he continued. "Consumption rates in all other nations are falling, have fallen to the point that the tax revenues to governments, that the business and industries those nation states are providing is now a net negative number relative to total debt service and public cost, that this exists in virtually every nation state on the planet now."
And for much of this "doom", interestingly, he blames the Bush-Cheney "regime".
"They have now consolidated power and money on the planet to the maximum extent possible. The planet's net liquidity, that is its, net free cash flow. Is now a negative number. The planet is not simply sinking into a sea of red ink; it is already sunk. The people just don't realize it yet," he said.
According to Robertson, "the Bush-Cheney regime is preparing the nation for transition from democracy into dictatorship because a dictatorship will be necessary to control, in 5 years time, food and water riots." He said "the federal government, that part of Patriot II Act, the internal exile, that the government is going to have to build now huge detention compounds on federal lands, probably in the West where the land is available, to potentially house 50 million or more citizens that will be in financial ruin."
In 10 years time, whoever is left will be effectively starting again, he said.
"More importantly, and I'm trying to think how we imply this or how we express this to the people, what extraordinary times we are living in and how the destruction of the planet has been engineered by the Bushonian Cabal from 1980 to 1992, and then from 2001 to present, which has effectively destroyed the economic liquidity of the planet," he said.
Robertson ended the interview by saying that he hopes he is not alive to see this.
"The lucky ones are the ones who are my age now," he said.
We're in for rough times, but Robertson is way out on a leftist limb with his predictions. I suspect from the language that he is using that if Kerry had been elected President and the same exact economic conditions prevailed as today, there wouldn't be much of a problem looming at all, in his judgment. ;)
And then the kicker. It's all Bush's fault. A cabal.
Yes. There is a real estate bubble in places. And yes, it will burst and hurt people. But roads will not immediately melt and crumble. Hospitals will not immediately cease to operate.
Even in the Great Depression, a lot of people had jobs, and some people even did pretty well. The poor who could farm got by. Some rich people who lost paper wealth and had nothing else and no great skills did pretty badly. People who worked in tobacco factories did fine, since unemployed people had time to smoke and somehow managed to get cigarettes. I would imagine that tobacco was not the only depression-proof business.
But yes. I agree that real estate prices have reached the point of insanity now. This includes where I live, Fredericksburg, VA. Nuts. Absolutely nuts.
Mr Doom and Gloom. Probably one of thosee yahoos who swore that on 1/1/2000 near every electronic device in the world would freeze up, planes would crash, elevators would stop between floors, nuclear missiles would launch themselves and land in neighborhoods down the street, water would turn colors, cows would go on strike, and Michael Jackson would turn white.
OK, so it seems it isn't Robertson, but the author of the article putting leftist words in his mouth. Makes more sense.
So now we've gotta start consuming more, to make up for the lazy under-consuming foreigners in slacker nations? Is that the message?
SD
Actually, never been wrong Robertson was forced out of the industry by substandard performance. He couldn't hang onto his clients. The bull/bear 1995-2003 forced out numerous managers. Robertson's was an exceptionally high profile, and especially unceremonial exodus.
Two, the old geezer might like to take a look at a first year course in international finance and a glimpse at the capital account before making foolish assertions about our spending habits.
Third, I'd like to know how much of his portfolio is short these overpriced assts.
What a moron.
20 million move ins will create a HUGE need for movers and remodeling people - sounds like a jobs program. I bet these cry babies are the same ones that bet on Jimmy "the motorcycle guru" and lost their shirts in commidities and the markets. These never wrong guys are people. They are part of the same industry that traded stock after hours and played pump and dump games.
"People will be carrying around U.S. dollars in wheelbarrows like Germany," he said.
Naw. Most of us use bank cards now.
More likely that the hedge fund manager was hedging the wrong way lol.
So much irony, so little time... Mr. Never Been Wrong, is the former head of Tiger Management because he made the wrong investments and he had to liquidate the company.
Had that line been the first line we could have been spared reading this tripe. He has all his basic facts wrong, and it would appear he knows they are wrong. The economy is on the upswing and it has nothing to do with property. Further, consumption is RISING in most countries, not falling.
yah,that 8 year break in the action was all free fluffy bunnies for all...what a crack pot.
"Naw. Most of us use bank cards now."
We'll be carrying bank cards around in wheelbarrows.
Tobacco farming along with the great success of the boardgame Monopoly produced by Parker Brothers.
That is completely silly. Another manager trying to get attention. Cavutto would love him! No substance, just babble.
The bubble is a classic Cavutto botch. Fannie Mae, Freddie Mac and numberous economists have studied housing markets and bubbles for years. Who does Cavutto have on his show? Hysterical fund managers who know nothing about real estate or housing (talk about Hubris!).
I live in Loudoun County and it has been insane for years. We decided to stay in our current house and not "move up" just because I don't trust the market.
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