Video-o-rama: Wishing you well, Mr O

By Prieur du Plessis, on January 24th, 2009 posted in: Investment, Markets, Money

Four-day weeks are notoriously volatile, and the past few days were no exception. But despite a daily dosage of grim economic news and a deterioration in the investment outlook, the headlines were captured by the inauguration of the US’s 44th president, Barack Obama.

Commentators were in agreement that Mr O commenced his tenure against the worst economic background in living memory and that his Administration had its work cut out to resurrect the US from its economic malaise (also see “Obama’s honeymoon faces daunting tasks“). As a result, good viewing material was produced with the likes of Warren Buffett, David Swensen, Bill Gross, John Mauldin, John Bogle, Stephen Roach and Joseph Stiglitz in attendance.

A few of the more interesting video clips that attracted my attention are shared below.

But before we lend our ears to some of the familiar voices deliberating the outlook for the economy and financial markets, spend a few minutes viewing the first two parts of Max Keiser’s delightful new BBC series. Entitled “The Oracle” the videos take a fresh look at the causes and consequences of the financial crisis.

BBC News: The oracle with Max Keiser
“Back in 2006, when bankers and hedge-fund managers strode the world, Max Keiser predicted that a crisis in the global banking system would be triggered by subprime debt. How right he was. Now, he’s bringing his predictive powers to BBC World News in a new series called The Oracle – starting with an entertaining and irreverent look at the global economic crisis. “

Click here or on the image below for part 1 of the interview.

Click here for part 2 of the interview.

Source: BBC News (via YouTube), January 16, 2009.

NBR: Warren Buffett reminisces about Wall Street
The Chairman & CEO of Berkshire-Hathaway sat down with NBR’s Susie Gharib to discuss the past, present and future of Wall Street.

Source: NBR, January 22, 2009.

Charlie Rose: A conversation with David Swensen

Source: Charlie Rose, January 21, 2009.

CNBC: Barack Obama’s inaugural address

Source: CNBC, January 20, 2009.

CNBC: Warren Buffett – Barack Obama will help the economy, but don’t expect short-term miracles

Click here for the article.

Source: CNBC, January 18, 2009.

John Authers (Financial Times): Without a watchful eye
“Following the successive eight-year terms of Bill Clinton and George W. Bush, markets probably agree with President Obama’s call for a ‘new era of responsibility’.”

Click here for the article.

Source: John Authers, Financial Times, January 20, 2009.

CNBC: Obama & the TARP=
Debating the use of the TARP for foreclosure diminution with Barney Frank, House Financial Services Committee Chairman, and Joseph Stiglitz, Columbia University & Nobel Prize-winning economist.

Source: CNBC, January 19, 2009.

Bloomberg: Gross – $500 billion in deficit spending needed
“Bill Gross, manager of the $132 billion Total Return Fund at Pacific Investment Management Co, talks with Bloomberg’s Kathleen Hays from Newport Beach, California, about prospects for deficit spending as the federal government attempts to fund efforts to stimulate the economy. Gross also discusses the outlook for Treasuries, municipal bonds and corporates.”

Source: Bloomberg, January 21, 2009.

Yahoo Finance: Mauldin says government will keep spending until economy reflates
“Barack Obama’s stimulus package has now grown to $825 billion, news that comes as no surprise to John Mauldin, president of Millennium Wave Advisors.

“‘We are in uncharted waters. But the captains of the boats are all Keynesians,’ Mauldin says, meaning they believe government spending is key to fighting the downturn. ‘They will keep spending until the economy reflates.’

“Mauldin, who has been notably bearish on the economy and stocks in his popular Thoughts from the Frontline e-letter, does not believe the government will be successful in turning the economy anytime soon; ‘this recession is going to be the longest in anyone’s memory,’ he writes. ‘It is going to seem like it is never going to end.’

“Still, he does believe the government spending will prevent the most dire economic outcome and that from the rubble of Wall Street a new, private banking system will emerge – even as the government continues to prop up the old, failed model.”

Source: Aaron Task, Yahoo Finance, January 16, 2009.

Yahoo Finance: John Mauldin’s 2009 outlook – deflation, recession, new market lows
“John Mauldin, president of Millennium Wave Advisors, was one of the few analysts whose forecasts for 2008 proved accurate (and worth repeating). Mauldin made bullish bets on gold and Treasuries, and remained wary of stocks. Although he did believe the US was in recession heading into 2008, which wasn’t consensus at the time, Mauldin readily admits he wasn’t negative enough on the economy (again distinguishing himself from most forecasters who never seem to admit their failures).

Looking out into 2009, Mauldin’s forecast can be summed up in two words: Deflation and Recession – with new lows for the stock market thrown in for good measure.

“‘We have a structural program in that deflation has the potential to get some very real traction going forward,’ he writes in his popular Thoughts from the Frontline e-letter. ‘Why? Because not just in the US, but all over the world, we built too much of almost everything. And when demand due to the recession drops as well, prices fall as producers try to stay in business.’

“As discussed in the accompanying video, Mauldin’s baseline scenario features:

Deep recession throughout 2009 and a ‘muddle through’ scenario in 2010 and 2011, the earliest he believes housing inventories can be worked off.

The potential for a short-term rally in stocks as money redeemed from hedge fund comes back into the market (directly or via other managers) but new lows in the summer as earnings continue to disappoint.

The potential for a 1974-like bottom in late 2009 as valuation compression generates selective opportunities.

“This outlook, it should be noted, presumes government stimulus prevents a more dire economic outcome.”

Source: Aaron Task, Yahoo Finance, January 16, 2009.

CNBC: Outlook for the O-Conomy
“A look at the future of the economy, with John Bogle, The Vanguard Group founder/former CEO, Greg Valliere, Stanford Financial Group, and Dennis Gartman, The Gartman Letter.”

Source: CNBC, January 20, 2009.

CNBC: Roach – Worst is ahead for the US
“The worst is ahead for the real economy in the US, says Stephen Roach, chairman, Asia at Morgan Stanley. As he sees no V-shaped recovery there, he tells CNBC’s Martin Soong & Sri Jegarajah what to expect on the US consumption and employment front.”

Source: CNBC, January 19, 2009.

CNBC: Stiglitz – spending versus tax cuts
“Debating the merits of tax cuts versus spending with Joseph Stiglitz, Columbia University & Nobel Prize-winning economist.

Source: CNBC, January 19, 2009.

Financial Times: UK announces new bank bailout
“The UK government on Monday announced a raft of measures in an effort to promote bank lending and rescue the economy. Peter Thal Larsen, FT’s banking editor, tells Daniel Garrahan that the first bailout of British banks was oversold by Gordon Brown and the government could yet be forced to step in and take full control over the banking sector.”

Click here for the article.

Source: Financial Times, January 19, 2009.

CNBC: Richard Branson on UK bailout
“Virgin Group President Sir Richard Branson famously missed out on buying Northern Rock last year, after the UK government rejected his consortium’s offer. Branson speaks to CNBC about the latest bailout package.”

Source: CNBC, January 19, 2009.

CNBC: Trichet hints at further rate cut
“European interest rates have not necessarily bottomed at 2%, European Central Bank President Jean-Claude Trichet told CNBC Wednesday. ‘We have a very important rendezvous in March,’ he said.”

Source: CNBC, January 21, 2009.

John Authers (Financial Times): Thinking the unthinkable for China
“With a Chinese economic contraction now at least thinkable, new data could stoke the fears that already stalk the financial system.”

Click here for the article.

Source: John Authers, Financial Times, January 21, 2009.

CNBC: Roach – Asia is in big trouble
“Asia is not going through a cyclical or inventory correction, says Stephen Roach, chairman, Asia at Morgan Stanley. He tells CNBC’s Martin Soong and Sri Jegarajah that export-dependent Asia, especially China, is in big trouble as it has failed to stimulate internal private consumption.”

Source: CNBC, January 19, 2009.

Financial Times: Barclays Capital’s Larry Kantor says emerging-market crisis looms
“The stress in the developed world has infected the emerging world. Latin America is likely to come out of the crisis relatively well, but countries in Eastern Europe could be affected the worst. The most vulnerable countries are those that depend most on trade, with big current account deficits. China is getting hit hard but, like the US, it has the determination to take significant action. The two countries in the world where recovery could come first are the US and China.”