You know, back in 03/04, the aptly named Brenda Buttner of Fox News
Channel,
was doing her usual ****lling for the Bush administration, and warned
viewers about
'the Kerry Crash', the crash that was going to happen if John Kerry was
elected. I
happened to think that a 'Dubya Depression' was much more likely. Not that
I am
looking forward to it at all. I would much rather make money in a bull
market.
However, isn't it time that these individuals were impeached, and a new
set
of people entered the White House, so that at least the US and world
economies
can be saved? I think a lot of the measures that can be taken to soften
the
blow are legislative.
There has to be a point where even Nancy Pelosi says - for the good of
the country (and the world), these individuals have to be removed?
I hope this means the end of Republicanism and Conservatism for the
next 30 years.
Alex
http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm?postversion=2008020307
'It's going to be much worse'
Famed investor Jim Rogers sees hard times ahead for the United States -
and a big op****tunity
looming in China.
By Brian O'Keefe, senior editor
Jim Rogers says the Fed, and Fed Chairman Ben Bernanke, are out of
control.
Legendary investor Jim Rogers made a bundle by anticipating a boom in
commodities. Now he's focusing
on the People's Republic. (more)
FORTUNE 500
Current Issue
NEW YORK (Fortune) -- You might expect Jim Rogers to be gloating a little
bit. After all, the famed
investor has been predicting a recession in the U.S. economy for months
and shorting the shares of
now-tanking Wall Street investment banks for even longer. And with fears
of a recession sparking
both a worldwide market sell-off and emergency action from Federal Reserve
chairman Ben Bernanke,
Rogers again looks prescient - just as he has over the past few years as
the China-driven
commodities boom he predicted almost a decade ago began kicked into high
gear. But when I reached
him by phone in Singa****e the other day there was little hint of
celebration in his voice. Instead,
he took a serious tone.
"I'm extremely worried," he says. "I have been for a while, but I just see
things getting much worse
this time around than I expected." To Rogers, a longtime Fed critic,
Bernanke's decision to ride to
the market's rescue with a 75-basis-point cut in the Fed's benchmark rate
only a week before its
scheduled meeting (at which time they cut it another 50 basis points) is
the latest sign that the
central bank isn't willing to provide the fiscal discipline that he thinks
the economy desperately
needs.
"Conceivably we could have just had recession, hard times, sliding dollar,
inflation, etc., but I'm
afraid it's going to be much worse," he says. "Bernanke is printing huge
amounts of money. He's out
of control and the Fed is out of control. We are probably going to have
one of the worst recessions
we've had since the Second World War. It's not a good scene."
Rogers looks at the Fed's willingness to add liquidity to an already
inflationary environment and
sees the history of the 1970s repeating itself. Does that mean
stagflation? "It is a real danger
and, in fact, a probability."
Where the op****tunities are
The 1970s, of course, was when Rogers first made his reputation - and a
lot of money - as George
Soros's original partner in the Quantum Fund. And despite his gloomy
outlook for the U.S., he still
sees op****tunities in today's world. In fact, he sees the recent
correction as a potential gift for
investors who know where to head in global markets: China.
Rogers has been fascinated with China ever since he rode his motorcycle
across the country two
decades ago, and he's been a full-fledged China bull for several years. In
December he published his
latest book, an investor-friendly tome titled "A Bull in China: How to
Invest Profitably in the
World's Greatest Market." And that same month he sold his beloved
Manhattan townhouse for $15.75
million to a daughter of oil tycoon H. L. Hunt and moved his family
full-time to Singa****e - the
better to be closer to the action in Beijing and Shanghai. (He bought the
New York mansion 30 years
ago for just over $100,000; not a bad return on his investment.)
But in a November interview I conducted with Rogers, he admitted that he
was rooting for a serious
correction in China to cool off an overheating market and bring back
prices to a reasonable level.
With the bourses in Shanghai and Hong Kong both some 20% off their recent
highs as of late January,
Rogers says he's starting to consider new investments.
"I'm delighted to see what's happening in Shanghai and Hong Kong," he
says. "As I've said, if things
hadn't cooled off, the Chinese market was in danger of turning into a
bubble. I find this most
encouraging. The government's been doing its best to try and cool things
off. Mainly they've been
trying to deal with real estate but it's having an effect on stocks, too.
I would suspect the
correction isn't quite over in China. But I'm gearing up. I didn't put in
any orders for tomorrow
but I'm starting to prepare my list of things to buy in China. Whether I
buy this week or this month
or this quarter, who knows. But I'm starting to think about buying new
shares in China for the first
time in a while. And I'm not thinking about buying in America."
Ultimately, Rogers doesn't think that the troubles in the United States
will be much of a drag on
the prospects for the People's Republic. "Anybody who sells to Sears
(SHLD, Fortune 500) or Wal-Mart
(WMT, Fortune 500) is going to be affected, without question," he says.
"Some parts of the Chinese
economy are going to be untouched, however. They won't even know America's
in recession. They won't
care if America falls off the face of the earth."
"We are probably going to have one of the worst recessions we've had since
the Second World War.
It's not a good scene."
Jim Rogers
What's on his China buying list? Rogers says it will depend in large part
on which stocks come down
to the right level, but he's keeping his eye on certain high-growth
sectors including tourism,
agriculture, power generation and airlines.
The pullback in commodity prices on recession fears hasn't dampened his
enthusiasm for resources
investments, either. More like a cyclical correction in the middle of a
long-term bull market.
"Certainly some commodities are going to be affected," says Rogers. "But
it's not as if the markets
haven't figured this out. Remember the old expression: 'Dr. Copper is the
best economist in the
world.' Well, Dr. Nickel and Dr. Zinc figured out a few months ago what I
thought I had figured out,
that we were going to have a recession. Nickel is already down 50%. Other
commodities may fall more.
But I don't see the economics of agriculture being much affected at all.
Maybe there will be a few
less cotton ****rts bought. Maybe there will be a few less tires bought.
But the supply is under more
duress than the demand."
Once again Rogers draws on the 1970s in his analysis. "Think about the
story of gold in the '70s,"
he says. "Gold went up 600%, and then it started correcting. It went down
nearly every month for two
years, nearly 50% from the high point. And everybody said, 'Well, that's
the end of the gold market.
It was just a fluke. It's over.' It scared everybody out. And then gold
turned around and went up
850% from that level. This is what happens in markets. But the
fundamentals of the secular bull
market in commodities are not over any more now than they were for gold in
the '70s."
Where he expects the pain to be most intense is on Wall Street. He says he
hasn't covered his short
positions on the investment banks or Citigroup (C, Fortune 500) and won't
for a while. "Those things
are going to go way, way, way down," says Rogers. "The investment banks
are down now because of the
problems in the credit market. Wait until the effects of the bear market
come along. If you just go
back and look at other bear markets, investment bank stocks have gone down
enormously. We haven't
gotten to that stage yet. It's going to bring their balance sheets under
duress. This is going to
get much worse. But that's where there have been excesses for the past
decade or so. And whenever
you have a bear market come along the great excesses of the previous
period are the ones that get
cleaned out the most."
He'll be watching - from Singa****e.
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