The doomsayers
We ran across the graphic below this week and found it amusing. We’ve often taken to task the doomsday prophets in the investment community. They make their living trying to convince the world’s investors that another financial catastrophe is just around the corner. Given that there is always a reasonable chunk of the population who shares the view of the doomsayers, it’s a pretty lucrative gig. Of course their track record of predicting doom is extremely poor. As legendary economist Paul Samuelson said about the stock market: “it has predicted nine of the last five recessions”. So it is with the speakers of impending doom. See below the doom-speak from noted and oft-quoted doomer Marc Faber:
Chart 1: 
Here is just a smattering of Mr. Faber’s headlines from which the chart above is derived.
“Asset Markets Will Crash Like Titanic” – Bloomberg, January 6, 2016
“Dr. Doom calls bubble, adding to gloomy calls” – CNBC, Nov 2, 2015
“2014 crash will be worse than 1987’s” Marc Faber – CNBC, April 10, 2014
Marc Faber: “Look out! A 1987-style crash is coming.” – CNBC, August 8, 2013
Marc Faber: “We Could Experience A 1987-Style Crash This Year” – Business Insider, 5/10/2012
Faber: “The Dollar’s Value In The Future Will Be Zero” – Business Insider, 4/18/ 2011 ?The Bear Market Is Starting’ Marc Faber -CNBC, August 3, 2011
Faber on Hyperinflation: “Not A Matter Of If But When” – Business Insider, 9/23/2010
The important thing is the be aware that these showmen are just that. They are talking to a certain audience and are wrongly cast as an “expert” because they can make cogent arguments in supporting their position and have some pedigree behind them. But accurate in their predictions? See the chart above.
(For more on the folly of forecasting the stock market, see any of a number of articles from Barry Ritholtz including this one: Apprenticed Investor: The Folly of Forecasting)
(The above chart on Marc Faber was generated after his comments on CNBC recently. Here is a link to that interview: Marc Faber: S&P is set to crash 50%, giving back 5 years of gains)
Structural changes in U.S. labor
We’ve commented in the past on the changes in the labor force, typically referring to work published on Doug Short’s blog site. We return again to Mr. Short’s site for analysis of labor, this time focusing on the thick of the working age population and changes in that demographic. There has been a huge surge in the number of people working past what was once “retirement age”. Many reasons for that documented at the end of this article. But the conclusions are interesting if not sobering – the U.S. economy continues to wrestle with structural changes that have been a headwind for achieving the levels of employment we once enjoyed. Herewith is the article link: What Would It Take for the Prime U.S. Workforce to Fully Recover?
Market Update
Investors began the week still joyous over the prior Friday’s solid jobs report. In that context, the quiet, flat Monday session was just fine. Tuesday saw another flat market day in the U.S. but strength in overseas markets. Wednesday offered a bit of a pullback with stocks ticking down -0.3%. The U.S. dollar slipped notably as interest rates fell back with the 10-year U.S. Treasury bond back at a 1.5% yield. Stocks busted out of the doldrums Thursday with a +0.5% rise on the back of strength in retail shares and a rebound in oil prices. But it was a one-day wonder as markets returned to their listless trading Friday with another flat day, the fourth tight range-bound session of the week.
Warm wishes and until next week.