On the recession, from September 2007...

[slipslidingaway]

http://contraryinvestor.com/2007archives/mosept07.htm

"...For now, many expecting the US to bypass an official recession point to payroll strength as a key rationale for this viewpoint supportive of consumer spending. But the facts show us that tried and true leading indicators of payroll trends are pointing in exactly the opposite direction of strength. For now, the year over year rate of change in payroll growth is below the lows seen in the mid-cycle economic slowdowns of the mid 1980’s and 1990’s. Historical precedent is telling us to be very suspect of those expecting US payroll growth to remain strong. These folks are guessing and hoping. We’ll leave you with one last question. If indeed US payroll employment growth slows meaningfully ahead, as we expect as per the collective message of current data, can we really believe the consumer spending and credit acceleration dependent US economy won’t blink? Stop listening to the talking heads and other assorted Street fortunetellers guessing about the direction of the US economy ahead and the potential for recession, and start looking at the factual data right in front of our faces. The real economic data may not be as entertaining, colorful or as hilarious as the circus clowns on CNBC, but we guarantee you the admission ticket for the investment entertainment show can be oh so costly. Remember, once you've purchased a ticket to the television Street pundit/circus barker show of life, there are no refunds."


And from August 2007...

http://contraryinvestor.com/2007archives/moaug07.htm

"...Although we believe each individual chart tells its own story, our main point in this discussion is that collectively, these relationships represent multi-year or multi-decade trend breaks for now. They are now occurring in simultaneous fashion. Just a coincidence? We think not. Moreover, we suggest an important need for continual monitoring as these trends quite similarly hug trends in powerful demographic changes. Could it really be that as the boomers push near and into retirement, what has been their dramatic impact on asset inflation through continual expansion in household leverage is changing? We believe this is indeed the primary question and message to continue to monitor in these relationships. As we’ve suggested many a time, the credit cycle is the key. And this is a slice of the broader credit cycle as it applies to households. Households key to longer-term consumption trends important to both the US domestic and many a foreign exporting economy. You know we’ll be checking back in on a quarterly basis to monitor whether these initial trend changes remain intact, or are simply blips on the ever-growing leverage expansion screen."


"Our monthly research, commentary and perspectives on the financial markets. This report is updated in first weekend of each month and is an open access report. Current report: December 2008"

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