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sdduuuude
ParticipantExperience is that which you get just after you needed it.
September 8, 2006 at 4:11 PM in reply to: 95% of US economists missed the last recession AFTER it had already started #34747sdduuuude
ParticipantJust for the record, I think there is a recession coming. I don’t know how we could possibly avoid it.
I just think the early 2007 timeline is a bit early, given the painfully slow speed at which this bubble is deflating. Not only does housing have to come down alot further, but the effects of that have to move throughout the economy. I just think it will take time – very late 2007 or early 2008, possibly highlighted by a very nasty 2007 holiday retail season.
Remember – we are boiling the frog alive, here. Not dropping it into a pot of boiling water.
Also, San Diego is on the front of the housing bubble deflation. The rest of the nation has to experience the economic pain in order to make the nationwide numbers say “recession.” SD may hit recessionary conditions earlier, but the national numbers should lag SD by several months.
sdduuuude
ParticipantColumbo – It isn’t lunacy at all.
We send our money to China because we can’t produce anything for less than they can. Why? Because it is against the law to hire anyone for the wages they pay. As a result, our minimum wage earners would have to be 10x more productive than theirs because their wages are based on a market, rather than an arbitrary non-market-based regulation.
Yes, you have to put money in the hands of the workers, but if you price them out of the market, they won’t be working.
This doesn’t affect the consumer-driven part of society, but it does answer the question of why our consumers are supporting their economy.
sdduuuude
ParticipantInteresting info, powayseller.
Unlikely you will be able to convince them of the truth, though you are dead-on. Reminds me of an old saying:
“Never teach a pig to sing. It doesn’t work and it annoys the pig.”
sdduuuude
ParticipantI believe that the real cause is the lofty value of our minimum wage, in combination with our welfare programs.
We refuse to hire people for low paying jobs, and pay people to do nothing who could be otherwise be working those low paying jobs.
sdduuuude
ParticipantCool. I’m short BZH and the housing ETF PKB.
sdduuuude
Participant“But don’t confuse predictions with economic and business and housing cycles which are repetitive and cyclical and don’t need predicting; they only need to BE UNDERSTOOD. Don’t confuse predicting with understanding market cycles.”
This is a truly astounding, naive comment. I’d say it is the oversimplification of the century and the ultimate proof that you really don’t get it. An academic simplification by a non-academic. Amazing.
I’m not even going to critique it. I’m just going to let it sit there, for all to see how easy economic analysis really is in your eyes.
sdduuuude
ParticipantPowayseller, your overconfidence is highlighted by this comment:
“… who believes this asset bubble will not revert to its mean is clearly delusional”
While you are arguing about whether or not the bubble will revert to the mean, the real question is “What is the mean?”
Mean of what? What variable will revert to the mean? The growth, the price, the median, a ratio? Not every measurable variable can revert to the mean. And do you take the mean between for the last 100 years? the last 10 years? The 4 years before 2004? the 3 years before 2001?
Will it revert to the mean in a month or in 50 years? Will it revert to the 50 year mean in a year? or the 10 year mean in 50 years?
Here you are certain that your analysis is correct, when it isn’t. And, when you are called on it, you argue the wrong point.
I have had classes where we spent a week or two learning when regression to the mean analysis is just plain useless.
There are many, many ways to use it incorrectly, and you have found one of them.
Yes, the bubble will revert to the mean.
A truly meaningless point.sdduuuude
ParticipantAll this talk of timing and cyclical markets led my mind to this graph, posted in another link:
While I see two cyclical events in the 80s and 90s, then major wierdness in 2001, I’m not so sure I see a cyclical pattern here that I can assume will continue perpetually.
Trying to predict the bottom of something that isn’t consistently cyclical is a bit of a challenge, methinks.
Look at Japan for the last 13 years, for example, after their last crash. Maybe we will see more stability after the coming bubble deflation, and there won’t be a stark “bottom.”
Maybe SD data is more cyclical, if one looks back more than two cycles, but I have only seen two cycles plotted.
D
September 6, 2006 at 8:50 AM in reply to: Roubini: How Bearish Does The Stock Market Get During a Recession? 28% Down…or Growling in Bearishness #34509sdduuuude
ParticipantThanks. Interesting article. I think there is a recession coming also, but I think it will be closer to Q108 than Q107. Things take time to percolate through the economy and this housing thing has been moving so slowly for so long, I don’t see it affecting the economy so quickly. Just my intuition.
September 5, 2006 at 8:42 PM in reply to: Roubini: How Bearish Does The Stock Market Get During a Recession? 28% Down…or Growling in Bearishness #34480sdduuuude
ParticipantI note a comment on this page where someone says he has been predicting this recession for some time now.
When exactly is it going to hit?
Timing of a prediction is important. You can’t say “a recession is coming” for 5 years, then claim success when it hits in the 6th year.
I’m not saying I disagree with the article, but I am interested in the timing of his expectations. If the recession is suppoed to hit in late 2007, then we may have many months of healthy stock market before the pre-recession bear hits. If it is coming in early 2007, maybe not.
sdduuuude
ParticipantMostly the Mountain Streets.
Was lots of inventory last Fall, but the for sale signs seem to have lightened up. Also, many of the for sale signs that are up have been there for months.
Someone with MLS info could back this up with real data. This is just my impression.
sdduuuude
ParticipantHouse bubble Haikus
Very Interesting Thread.
My Haiku sucks though.sdduuuude
ParticipantI was checking out Zillow comps for the property I sold last year in August. It seems it has not come down at all, though the comps were a couple months old.
The parts of Clairemont that I know seem to be short on both inventory and sales these days, just by my “driving around” survey. Seems like a real dead market.
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