[Carrie]

CNBC Interview with Julian Robertson: I came across this while I was surfing last night, and it made the hairs on the back of my neck stand up. According to almartinraw.com (a subscription site), CNBC had an interview with Julian Robertson, who formerly ran Tiger Management, the world's largest hedge fund. He gave an utterly apocalyptic prediction of the future & the result of the housing bubble:
$this->bbcode_second_pass_quote('', 'R')obertson said that he's worried about the speculative bubble in housing and the fact that more than 1/4 of all consumer spending is now sustained by that bubble, plus the fact that 20 million citizens could lose their homes in a collapse of the speculative bubble in housing, and that the Fed and, indeed, central banks worldwide would act in concert out of desperation to reinflate the global economy in the process, creating an inflationary spiral unheralded in the economic history of the planet.
"Where does it end?" Robertson was asked and he said, "Utter global collapse." Not simply economic collapse; complete disintegration of all infrastructure and of all public structures of governments. Utter, utter collapse. That the end is collapse of simply epic proportion.
In 10 years time, he said, whoever is still alive on the planet will be effectively starting again."

[Jack]

I didn't see the interview. A google of the name indicates he has strong credentials and a track record that would make anyone jealous.

But quite frankly...I know some people of lesser fame that are involved in the financial markets, and they are scared to death. The housing bubble is real, and we're close to a top.

Two of them are Peak Oil aware. And they regard that as the lesser problem.

[arretium]

Thanks for the post guys, fascinating reads.

I wonder if Speecop, Holmes, and Ksemler and I would all come to an agreement in this area? My hunch is we would.

[ArimoDave]

Kochevnik wrote:
$this->bbcode_second_pass_quote('', ' ')Say unemployment, bankruptcies and foreclosures skyrocket, and millions are unable to feed and/or house themselves. How many many formerly middle class Americans will the govt allow on the streets homeless and hungry (and on the 6 o'clock news every night) before it decides to do something ? Tent Cities are what I would expect to see first - like HooverVilles the last time around. More permanent housing to follow ... certainly to be situated as far from the still-employed as possible.

[Jack]

$this->bbcode_second_pass_quote('ArimoDave', '
')Wait a minute. Where did all the houses go, in this scenario? Yes, the Banks forclosed, but who
is buying the houses, and living in them? If millions are left "homeless" there are then millions of
houses left unoccupied. Could somebody explain why the houses won't be occupied?

[ArimoDave]

I'm not saying that the houses will be given away, only that people will take them, or refuse to leave.
How is a government going to force millions from their homes -- many are armed -- especially when
those charged with their removal are themselves subject to eviction?

At some point, this is where things will lead given the scenario described.

ArimoDave

PS There was a time in my life when I was a Security Officer and was stationed at
apartment complexes. One of my duties was to ensure that the vacant apartments
were not used by squatters, etc. These vacant apatments were constantly being broken
into and inhabited. I made several tresspassing arrests durring these times.

[RonMN]

If the dollar collapsed there would be no way to pay anybody...you'd be working for green toilet paper in return...therefor NOBODY would go to work, not cops, not firefighters, NOBODY! there would be nobody to evict you. Do you think bankers are going to show up at there offices to count pieces of toilet paper? Gas stations open? nope...Food stores open? nope.

[ubercrap]

Sure, if you're one of the last people to lose your livelihood near the end of the collapse, there may be nobody to collect your debt and evict you, but in the meantime, civilization will continue at some level, and those people will surely lose big time.

[Jack]

$this->bbcode_second_pass_quote('ArimoDave', 'I')'m not saying that the houses will be given away, only that people will take them, or refuse to leave.
How is a government going to force millions from their homes -- many are armed -- especially when
those charged with their removal are themselves subject to eviction?

[DomusAlbion]

A little history on Robertson:

"Because of the "irrational" technology stock craze, Robertson suffered large losses in the late 1990s. This ultimately led him to close his investment company and liquidate its $6 billion in investments - investments which had once reached a high of $26 billion."

He's still despressed of that I would imagine.

[RonMN]

Uber...you're right! I was reading this as an "instantanious" crash. But that may not be the case at all...even if all this was to actually unfold the way it's stated above.

[ArimoDave]

$this->bbcode_second_pass_quote('Jack', '')$this->bbcode_second_pass_quote('ArimoDave', 'I')'m not saying that the houses will be given away, only that people will take them, or refuse to leave.
How is a government going to force millions from their homes -- many are armed -- especially when
those charged with their removal are themselves subject to eviction?

[RonMN]

Sorry dave, I usually don't follow the mad max senerio but this article has me a little spooked. I'm hopping the old guy is simply loosing it & making up stuff...but i doubt it.

[MicroHydro]

Several nations have recently been through national bankruptcy and currency collapse. Study these to understand the near term future of the US. The most outstanding recent example would Argentina. Here is one story with some links: http://www.ctdata.com/articles/2002/08/09/0812258.shtml
"Buenos Aires looks the same in some film clips, but in others, it looks like scenes from a science fiction movie."

The financial elite have been loan sharking and forclosing on third world countries for decades, with ruinous consequences for the victims. See Confessions of an Economic Hit Man http://www.amazon.com/exec/obidos/ASIN/ ... 65-7909762

The fat American calf is just the next to be slaughtered.

[DomusAlbion]

I think Robertson has had one too many mini strokes.

Some quotes:

He said "The American consumer is effectively now supporting the rest of the planet, 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."

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."

The guy is potty. I searched all CNBC sites and could find no reference to the Robertson interview by Ron Insana. I did find references to the interview on a site trying to sell gold and interestingly a White Supremecist site. I'm not buying into this.

[Carrie]

I'm pretty convinced that the interview actually took place. Here's some more confirmation - it's mentioned in "Squawkblog" on the MSN Spaces site. It's in the May 25th entry and says it occured yesterday:

spaces.msn

The really weird thing, though, is that all this apocalyptic talk isn't even mentioned here!

The content of the interview as stated in the article seems to be confirmed by this blogger who was responding to comments about the article:
$this->bbcode_second_pass_quote('', 'R')oger Nusbaum said...
that is the interview. He sees the potential for real problems and is not sure how we will avoid them.

However there were no tears involved as I saw the interview. What I know of Mr. Robertson, I would take it as he sees a potential problem, it plays out or not but he does not get emotional when it comes to economic and financial matter. My take.

[Jack]

$this->bbcode_second_pass_quote('ArimoDave', '
')
Is this the most realistic scenario, however? If it is, then the place we end up is with no money,
and bartering becomes the norm. Since most in the US have a capitalistic nature, will the
public let this situation actually transpire? Or, will some other less dire set of circumstances
really occur. If so, what would life really be like?

[ubercrap]

$this->bbcode_second_pass_quote('Carrie', 'I')'m pretty convinced that the interview actually took place. Here's some more confirmation - it's mentioned in "Squawkblog" on the MSN Spaces site. It's in the May 25th entry and says it occured yesterday:

spaces.msn

The really weird thing, though, is that all this apocalyptic talk isn't even mentioned here!

The content of the interview as stated in the article seems to be confirmed by this blogger who was responding to comments about the article:
$this->bbcode_second_pass_quote('', 'R')oger Nusbaum said...
that is the interview. He sees the potential for real problems and is not sure how we will avoid them.

However there were no tears involved as I saw the interview. What I know of Mr. Robertson, I would take it as he sees a potential problem, it plays out or not but he does not get emotional when it comes to economic and financial matter. My take.

[gg3]

Let's work our way back from "Confessions of an Economic Hit Man." The book's blurb refers to him being (paraphrase) recruited by the top-secret NSA to go to foreign countries and implement mean & nasty economic policies... Sorry folks, that's just wrong. NSA does signals intelligence, communications security, and basic technology development. NSA also invented the large-scale integrated circuit and then gave it to the civilian world. Your average NSA employee has a degree in math or something close. My average scepticism about this particular book just got two notches higher.

Now on to the original posting... the lengthy quote about the Robertson interview is really sloppy as hell. It doesn't make clear where Robertson's words begin and the poster's words end, or vice-versa. There are, at minimum, sloppy paraphrases and unattributed statements that could be either Robertson or the poster speaking. The mix of economic doom forecasting and political rant is typical of people for whom ideology has overtaken objectivity. So up goes the scepticism factor by another couple of notches.

Now I may be mistaken, and am about to go read the other topic on this subject. But at present I think the scepticism is justified.

In any case, we do not need people shouting fire in a crowded theatre that already smells of wood smoke. What we need is for people to stand up and quietly get everyone in their particular row to walk, calmly, toward the nearest exit.

[julianj]

It does seem unneccessarily apocalyptic. Russia and Argentina have suffered economic meltdowns in recent memory, and while they were pretty grim, they weren't any where as near Mad Max ish as some of the above posts. I can't see any govt wanting to have 25% of its (armed) citizens homeless and hungry.