Financial topics

Investments, gold, currencies, surviving after a financial meltdown
Witchiepoo
Posts: 90
Joined: Tue Sep 23, 2008 12:20 am

Re: Financial topics

Post by Witchiepoo »

Matt1989 wrote: The current economic conditions (at face value) are worse than they were 79 years ago. The Fed has played a more active role, thus delaying the crisis; however, the fundamental structures are weakening, slowly dragging the country down with it. We're probably in a recession already (I trust my gut instinct more than the numbers provided), and more and more people are recognizing that investing is a losing bargain.

Humans have a knack for herd mentality in a crisis. Why should this be any different?
I don't think that anything you say here is inconsistent with what I said, which is that it will be a slow and painful death rather than a "panic." Once Obama/McCain/who-the-hell-cares gets into office, people will calm down for a while.

Witchiepoo
Posts: 90
Joined: Tue Sep 23, 2008 12:20 am

Re: Financial topics

Post by Witchiepoo »

The word "depression" is sooo overused and outdated.

How about ...

"Extreme Hangover"

"Panic Attack"

"Bad Trip"

Matt1989
Posts: 170
Joined: Sun Sep 21, 2008 12:30 am

Re: Financial topics

Post by Matt1989 »

Witchiepoo wrote:
Matt1989 wrote: The current economic conditions (at face value) are worse than they were 79 years ago. The Fed has played a more active role, thus delaying the crisis; however, the fundamental structures are weakening, slowly dragging the country down with it. We're probably in a recession already (I trust my gut instinct more than the numbers provided), and more and more people are recognizing that investing is a losing bargain.

Humans have a knack for herd mentality in a crisis. Why should this be any different?
I don't think that anything you say here is inconsistent with what I said, which is that it will be a slow and painful death rather than a "panic." Once Obama/McCain/who-the-hell-cares gets into office, people will calm down for a while.
I should have put more emphasis on the last two lines. I'm suggesting that the slow drop will pick up speed (which is what we're seeing now) and cause the bottom to fall out since, it being a 4T, a major panic is likely.

Matt1989
Posts: 170
Joined: Sun Sep 21, 2008 12:30 am

Re: Financial topics

Post by Matt1989 »

Witchiepoo wrote:The word "depression" is sooo overused
Aren't you a psychiatrist?

jxenakis
Site Admin
Posts: 16
Joined: Sat Sep 20, 2008 9:04 am

Re: Financial topics

Post by jxenakis »

Peltaire -- I moved your post to "Basics of Generational Theory".

http://generationaldynamics.com/forum/v ... p=180#p180

John

Witchiepoo
Posts: 90
Joined: Tue Sep 23, 2008 12:20 am

Re: Financial topics

Post by Witchiepoo »

Matt1989 wrote:
I should have put more emphasis on the last two lines. I'm suggesting that the slow drop will pick up speed (which is what we're seeing now) and cause the bottom to fall out since, it being a 4T, a major panic is likely.
People have to see themselves as the problem before they see themselves as the solution. Right now, they're all about blaming government and/or Wall Street executives, and looking for the politicians to rescue them. After Dubya has been out of office for a while, and things still suck, then it will start to sink in that we did this to ourselves. Then the real "change" begins.

Yes, I'm a psychiatrist, and yes the word "depression" is definitely overused, along with words like "ADD, Bipolar, Aspergers" ... the list goes on.

John
Posts: 11479
Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

More scary graphs

Post by John »

Message from a web site reader:
more fuel for the deflationary argument?

http://www.thedelphicfuture.org/2008/08 ... s-gdp.html

Image

On the other hand, iTulip has been posting fairly good arguments for
inflation. Yes, this is a generational crisis, but look at how other
countries fared in their crises...indebted countries that is...

DisIllusionist
Posts: 8
Joined: Fri Sep 26, 2008 11:58 am

Re: Financial topics

Post by DisIllusionist »

One of the articles John X is referring to is:

Why the Fed can’t lower rates
http://www.itulip.com/forums/showthread ... #post48133

iTulip shows "price inflation" for a couple debtor and creditor nations right after an economic collapse. I've been telling people, who express interest, we are in deflation as the credit bubble bursts. But I also say we may experience a collapse of the dollar (massive inflation) depending both on international attitudes and how reckless our leadership becomes with our currency (these of course interact). Since we are a debtor nation I think this is a possibility.

The combination of a collapsing economy* and collapsing currency would be incredibly ...shall we say... disruptive. I fear this scenario more than a deflationary depression since I think social breakdown would occur. Feel free to comment or disagree (but with civil and well reasoned arguments, please).

*My opinion is that the damage to the real economy has already been done and has been obscured by the the illusionary growth in the financial economy.

John
Posts: 11479
Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

Re: Financial topics

Post by John »

A message from a web site reader, in reaction to my latest web log
article, questioning whether your 401K funds are safe.

** Are your 401K funds safe?
** http://www.generationaldynamics.com/cgi ... b#e081003b


Here is the message:
There is one way out of the 401K debacle if you think you are about to
get screwed. 401Ks typically have a loan option. You can take out
perhaps up to 50% (the amount equal to the IRS penalty) and hide that
somewhere else. Of course you will have to repay that loan... I
wonder what the IRS will do if people all of a sudden lost their
entire 401K yet still had a loan out (and then lost their job, too).
Gives me a headache... Oh well, if the crash happens I will find out.
I took out a loan to provide a downpayment on a house (saved me from
mortgage insurance, heh heh).

Actually, when I tried to find out about my money market fund it was
over a year ago, before all of this stuff started headlining the news.
They had no answers then and I'm sure if anything is wrong they will
certainly stonewall me now.
I honestly don't know if this idea will work for most people. If you
borrow money against your 401K, and then your 401K loses value, then
you still have to repay the loan, and your 401K has still lost its
value. But the situation may be different for each individual, so
check with your lawyer or financial adviser.

John
Last edited by John on Sat Oct 04, 2008 5:10 pm, edited 1 time in total.
Reason: Adding a response

John
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Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

Bailout of the World passes Congress. Now what?

Post by John »

The political pressure to pass the BOTW was enormous, even though
nobody could clearly state what the BOTW would do.

I haven't been hearing things like "The bailout will prevent the
entire financial system from melting down."

Now what they're saying is, "The bailout will make the recession less
bad."

And the recession is getting real. There's bad news every day, such
plummeting manufacturing numbers and plummeting employment numbers in
just the last couple of days.

And that's just in the U.S. One big indicator of worldwide trade is
the Baltic Dry Index, which measures demand for shipping of dry
goods. Here's the current graph:

Image

http://investmenttools.com/images/wfut/crb/bdi.gif

Note: The above graphic will change with time.

The BDI has surged to bubble levels over the last few years because
of the Chinese economy bubble. But with the end of the Beijing
Olympics, the Chinese economy bubble is also deflating, and the BDI
is falling with it.

The bailout bill vote in the House of Representatives has been
worldwide news. People around the world have been following the vote
with rapt attention, as their economies run down. The concept is:
"The Americans did this to us with their worthless mortgage-based
securities, so now we expect American money to help us out."

That's going to be a good trick. The Fed and other central banks
have already injected a trillion dollars of liquidity, and things
have continually gotten worse, so it's hard to see how a few hundred
billion more is going to turn things around.

I hear comments from pundits and politicians like, "I feel people have
a positive view of the future," and "The economy is biased toward
growth." That's sort of true, but when they give examples, the
examples are always from the 1990s (the dot-com bubble) or 2003 (the
credit and real estate bubbles).

What they refuse to understand is how drastically people have
changed. The massive fraud and deception that was commonplace up
till the beginning of 2007 -- thanks to the lethal combination of the
stupidity of the Boomers and nihilism of the Generation-Xers -- has
now been reversed. Mutual trust has been replaced by mutual
suspicion. Mutual tolerance has been replaced by mutual
condemnation.

These are massive attitude and behavioral changes of generational
behavior. Everyone seems to expect that the Bailout of the World
bill will cause these massive attitude and behavioral changes to
reverse. Why would they believe that? Because they're thinking of
the Unraveling era, the 1990s, when the motto still was, "Whatever
feels good, do it."

John

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