What is it with all the doomsday predictions

[Eugene]

We’re not going to have the replay of 1929, because we didn’t have Keynesianism, we didn’t have FDIC, we didn’t have unemployment insurance. Some people say that what made the Great Depression so bad was really the chain of bank failures in 1931-32. That had the effect of destroying vast amounts of wealth and scaring people away from keeping money in banks. And then deflation led to double-digit unemployment, and Hoover basically sat and watched Rome burn.

If anything, you can draw a parallel between January 2009 and March 1933.

FDR came into office in March 1933. On the day before his inauguration, Dow closed at 54. By the end of June, Dow passed 100.

Shovel jobs will not be an adequate replacement for the FIRE economy that we’re now losing.

They will be more than adequate. That FIRE economy you’re talking about was nothing more than borrowing money from the Chinese, giving many little pieces to guys on Wall Street, and giving the rest to an unemployed Hispanic homeowner in Chula Vista. If we replace THAT with shovel jobs paid for by borrowing more money from the Chinese, aggregate output of our society will increase.

[peterb]

“We’re from the government and we’re here to help”
The NY Fed threw 6 times it’s allowable level of funds at the banks in 1930. It didnt help. Again, our problem is not liquidity, it’s solvency. $12/hour jobs will do nothing more than keep us from riots. And that’s for those that are able to do this kind of work. All these tactics and govt intervention is to stave-off collapse and choas. I would not characterize this as a recovery. Life-support would be more accurate. Much like FDR’s WPA projects. War in the Europe brought us out of this contraction, not works projects. First by paying us to supply them, then by us joining the conflict.

Check out the technical charts and series of events. The paralell is very much in 1929, not 1933, as you suggest. I really dont see how you can come to such a conclusion?! If anything, one could contend that we’re in 1930, but not 1933! The Dow had fallen about 80% by then and completed a 3 year contraction. which is a historical norm.

[peterb]

“We’re from the government and we’re here to help”
The NY Fed threw 6 times it’s allowable level of funds at the banks in 1930. It didnt help. Again, our problem is not liquidity, it’s solvency. $12/hour jobs will do nothing more than keep us from riots. And that’s for those that are able to do this kind of work. All these tactics and govt intervention is to stave-off collapse and choas. I would not characterize this as a recovery. Life-support would be more accurate. Much like FDR’s WPA projects. War in the Europe brought us out of this contraction, not works projects. First by paying us to supply them, then by us joining the conflict.

Check out the technical charts and series of events. The paralell is very much in 1929, not 1933, as you suggest. I really dont see how you can come to such a conclusion?! If anything, one could contend that we’re in 1930, but not 1933! The Dow had fallen about 80% by then and completed a 3 year contraction. which is a historical norm.

[peterb]

“We’re from the government and we’re here to help”
The NY Fed threw 6 times it’s allowable level of funds at the banks in 1930. It didnt help. Again, our problem is not liquidity, it’s solvency. $12/hour jobs will do nothing more than keep us from riots. And that’s for those that are able to do this kind of work. All these tactics and govt intervention is to stave-off collapse and choas. I would not characterize this as a recovery. Life-support would be more accurate. Much like FDR’s WPA projects. War in the Europe brought us out of this contraction, not works projects. First by paying us to supply them, then by us joining the conflict.

Check out the technical charts and series of events. The paralell is very much in 1929, not 1933, as you suggest. I really dont see how you can come to such a conclusion?! If anything, one could contend that we’re in 1930, but not 1933! The Dow had fallen about 80% by then and completed a 3 year contraction. which is a historical norm.

[peterb]

“We’re from the government and we’re here to help”
The NY Fed threw 6 times it’s allowable level of funds at the banks in 1930. It didnt help. Again, our problem is not liquidity, it’s solvency. $12/hour jobs will do nothing more than keep us from riots. And that’s for those that are able to do this kind of work. All these tactics and govt intervention is to stave-off collapse and choas. I would not characterize this as a recovery. Life-support would be more accurate. Much like FDR’s WPA projects. War in the Europe brought us out of this contraction, not works projects. First by paying us to supply them, then by us joining the conflict.

Check out the technical charts and series of events. The paralell is very much in 1929, not 1933, as you suggest. I really dont see how you can come to such a conclusion?! If anything, one could contend that we’re in 1930, but not 1933! The Dow had fallen about 80% by then and completed a 3 year contraction. which is a historical norm.

[peterb]

“We’re from the government and we’re here to help”
The NY Fed threw 6 times it’s allowable level of funds at the banks in 1930. It didnt help. Again, our problem is not liquidity, it’s solvency. $12/hour jobs will do nothing more than keep us from riots. And that’s for those that are able to do this kind of work. All these tactics and govt intervention is to stave-off collapse and choas. I would not characterize this as a recovery. Life-support would be more accurate. Much like FDR’s WPA projects. War in the Europe brought us out of this contraction, not works projects. First by paying us to supply them, then by us joining the conflict.

Check out the technical charts and series of events. The paralell is very much in 1929, not 1933, as you suggest. I really dont see how you can come to such a conclusion?! If anything, one could contend that we’re in 1930, but not 1933! The Dow had fallen about 80% by then and completed a 3 year contraction. which is a historical norm.

[stockstradr]

I strongly agree with the posts by 4plexowner and peterb, essentially warning everyone: “when you are sure this US stock market has bottomed, think again (because it might still have a very nasty leg down ahead of it)”

Just guessing here, but this is the future I envision:

I think US stocks will eventually come down to about 600 or 650 (S&P500) then I’ll jump to ride the expected nice fool’s rally, and sell as soon as it has come up say 20%. This will be sometime in 2009. Then after the mini-rally, I will get out of US stocks and stay out, but I will buy heavily into Chinese stocks when I see Shanghai index fally below 1200.

So I believe returns for US stocks will be horrible for many years to come.

[stockstradr]

I strongly agree with the posts by 4plexowner and peterb, essentially warning everyone: “when you are sure this US stock market has bottomed, think again (because it might still have a very nasty leg down ahead of it)”

Just guessing here, but this is the future I envision:

I think US stocks will eventually come down to about 600 or 650 (S&P500) then I’ll jump to ride the expected nice fool’s rally, and sell as soon as it has come up say 20%. This will be sometime in 2009. Then after the mini-rally, I will get out of US stocks and stay out, but I will buy heavily into Chinese stocks when I see Shanghai index fally below 1200.

So I believe returns for US stocks will be horrible for many years to come.

[stockstradr]

I strongly agree with the posts by 4plexowner and peterb, essentially warning everyone: “when you are sure this US stock market has bottomed, think again (because it might still have a very nasty leg down ahead of it)”

Just guessing here, but this is the future I envision:

I think US stocks will eventually come down to about 600 or 650 (S&P500) then I’ll jump to ride the expected nice fool’s rally, and sell as soon as it has come up say 20%. This will be sometime in 2009. Then after the mini-rally, I will get out of US stocks and stay out, but I will buy heavily into Chinese stocks when I see Shanghai index fally below 1200.

So I believe returns for US stocks will be horrible for many years to come.

[stockstradr]

I strongly agree with the posts by 4plexowner and peterb, essentially warning everyone: “when you are sure this US stock market has bottomed, think again (because it might still have a very nasty leg down ahead of it)”

Just guessing here, but this is the future I envision:

I think US stocks will eventually come down to about 600 or 650 (S&P500) then I’ll jump to ride the expected nice fool’s rally, and sell as soon as it has come up say 20%. This will be sometime in 2009. Then after the mini-rally, I will get out of US stocks and stay out, but I will buy heavily into Chinese stocks when I see Shanghai index fally below 1200.

So I believe returns for US stocks will be horrible for many years to come.

[stockstradr]

I strongly agree with the posts by 4plexowner and peterb, essentially warning everyone: “when you are sure this US stock market has bottomed, think again (because it might still have a very nasty leg down ahead of it)”

Just guessing here, but this is the future I envision:

I think US stocks will eventually come down to about 600 or 650 (S&P500) then I’ll jump to ride the expected nice fool’s rally, and sell as soon as it has come up say 20%. This will be sometime in 2009. Then after the mini-rally, I will get out of US stocks and stay out, but I will buy heavily into Chinese stocks when I see Shanghai index fally below 1200.

So I believe returns for US stocks will be horrible for many years to come.

[4plexowner]

“what made the Great Depression so bad was really the chain of bank failures in 1931-32”

two more bank closures friday after the close

that puts us to 25 so far for 2008

add in a handful of credit unions going into receivership

do you define almost 30 as a chain of bank failures or do we have to wait a few more weeks?

~

Keynesian economics were very much in place during the 20’s and 30′ – not sure what you are saying with your comment – you might argue that the electronic financial system of today allows us to pump Keynesian economics more effectively than was possible during the 20’s/30’s but Keynesian economics was alive and well during that time frame

extra credit question: why do Austrian economist never earn the Nobel prize?

[4plexowner]

“what made the Great Depression so bad was really the chain of bank failures in 1931-32”

two more bank closures friday after the close

that puts us to 25 so far for 2008

add in a handful of credit unions going into receivership

do you define almost 30 as a chain of bank failures or do we have to wait a few more weeks?

~

Keynesian economics were very much in place during the 20’s and 30′ – not sure what you are saying with your comment – you might argue that the electronic financial system of today allows us to pump Keynesian economics more effectively than was possible during the 20’s/30’s but Keynesian economics was alive and well during that time frame

extra credit question: why do Austrian economist never earn the Nobel prize?

[4plexowner]

“what made the Great Depression so bad was really the chain of bank failures in 1931-32”

two more bank closures friday after the close

that puts us to 25 so far for 2008

add in a handful of credit unions going into receivership

do you define almost 30 as a chain of bank failures or do we have to wait a few more weeks?

~

Keynesian economics were very much in place during the 20’s and 30′ – not sure what you are saying with your comment – you might argue that the electronic financial system of today allows us to pump Keynesian economics more effectively than was possible during the 20’s/30’s but Keynesian economics was alive and well during that time frame

extra credit question: why do Austrian economist never earn the Nobel prize?

[4plexowner]

“what made the Great Depression so bad was really the chain of bank failures in 1931-32”

two more bank closures friday after the close

that puts us to 25 so far for 2008

add in a handful of credit unions going into receivership

do you define almost 30 as a chain of bank failures or do we have to wait a few more weeks?

~

Keynesian economics were very much in place during the 20’s and 30′ – not sure what you are saying with your comment – you might argue that the electronic financial system of today allows us to pump Keynesian economics more effectively than was possible during the 20’s/30’s but Keynesian economics was alive and well during that time frame

extra credit question: why do Austrian economist never earn the Nobel prize?

[Author]

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