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pessimism porn for the economically inclined
Old 06-04-2010, 06:31 AM   #1
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pessimism porn for the economically inclined

a different spin on the current economic situation in the US. no green shoots included

Into the Abyss: The Cycle of Debt Deflation | Before It's News
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Old 06-04-2010, 08:46 AM   #2
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Interesting article and, certainly, well documented (although not proofed by me). It is sure to feed the bellies of all the pessimists out there.

Quote:
One of the most famous quotations of Austrian economist Ludwig von Mises is that “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.”
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The major problems facing the US economy today—a tsunami or [sic] debt defaults, structural unemployment, massive government budget deficits, a contraction of the broad money supply outside of the federal government and the financial system, and a lack of sustainable growth—cannot be addressed as long as excess debt levels are maintained. As von Mises clearly understood, sound economic conditions cannot be restored unless and until the excess debt, which resulted from a boom brought about by credit expansion, is purged from the system. The alternative, and the current policy of the United States, is a downward spiral into a bottomless economic abyss.
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Old 06-04-2010, 10:33 AM   #3
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Thanks, I was feeling rather depressed before reading that.
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Old 06-04-2010, 03:34 PM   #4
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yeah, those austrian economists dont mince words. these days they are strutting around spouting "i told you so".
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Old 06-04-2010, 04:15 PM   #5
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Yeah, I just finish a book written by one of those Austrian economists. They should warn people to put away knives, scissors and razor blades before opening the book.
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Old 06-04-2010, 04:25 PM   #6
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Don't worry, be happy...

The Economic Recovery Is Real - Why fears of a second recession are overblown
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Old 06-04-2010, 06:37 PM   #7
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Yeah, but would you trust this face?
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File Type: png dan_gross.png (30.7 KB, 133 views)
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Old 06-04-2010, 07:34 PM   #8
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I don't care what he looks like as long as he is correct...
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Old 06-05-2010, 09:12 AM   #9
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There you go, ruined a perfectly good pity party!
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Old 06-05-2010, 09:47 AM   #10
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no double dip -- what a short memory. clipped from the article:

The concern about a double dip is largely a function of what I’d call residual bearishness. Stung by excessive optimism in 2007, the econo-pundit community remains in a reflexive, dour crouch. Since it began in the spring of 2009, this recovery has been widely disbelieved and dismissed. Fretting about the double dip is as much about where we’ve been as where we are.

this recession goes back a decade. the author is guilty of what he accuses the double dippers of -- residual feelings. he remembers the short-lived false boom between a decade-long bust. what a crackpot -
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Old 06-05-2010, 09:56 AM   #11
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10 year sp 500 chart...which in reality is worse than it looks - as it is not adjusted for inflation

S&P 500 INDEX ($INX) - Stock chart, Index chart - MSN Money
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Old 06-05-2010, 11:05 AM   #12
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what a crackpot -
Hey, don't be intimidated by this guy. He puts on his tinfoil hat the same way you do - one leg at a time.
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Old 06-05-2010, 12:37 PM   #13
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Hey, don't be intimidated by this guy. He puts on his tinfoil hat the same way you do - one leg at a time.
i need some of his rose colored tin foil glasses
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Old 06-05-2010, 01:44 PM   #14
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no double dip -- what a short memory. clipped from the article:

this recession goes back a decade.
Oh, heck. Don't stop there. Roll with Robert Prechter Jr, who has us exiting the Grand Supercycle upward waves from the early 1700s to January 2000. As of January 14, 2000 we are now is Grand Supercycle Wave 4, where we'll eventually retest the lows of the South Sea Bubble, or at least see the Dow Jones Industrial Average breach 400 (four hundred, two zeroes).

There is also the possibility that the current Grand Supercycle is the 5th wave of the Millennium Wave that started with the end of the Dark Ages, in which case we will be re-entering a new Dark Age, after a period of deflationary depression, hyperinflation, and the collapse of civilization.

I figure that I can probably increase my safe withdrawal rate slightly.

Elliot waves make for a great story, just as epicycles made a great story for pre-Copernican astronomers. I'm not big on the whole predestination, Cycles Control All gig, myself.
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Old 06-05-2010, 02:07 PM   #15
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Oh, heck. Don't stop there. Roll with Robert Prechter Jr, who has us exiting the Grand Supercycle upward waves from the early 1700s to January 2000. As of January 14, 2000 we are now is Grand Supercycle Wave 4, where we'll eventually retest the lows of the South Sea Bubble, or at least see the Dow Jones Industrial Average breach 400 (four hundred, two zeroes).

There is also the possibility that the current Grand Supercycle is the 5th wave of the Millennium Wave that started with the end of the Dark Ages, in which case we will be re-entering a new Dark Age, after a period of deflationary depression, hyperinflation, and the collapse of civilization.

I figure that I can probably increase my safe withdrawal rate slightly.

Elliot waves make for a great story, just as epicycles made a great story for pre-Copernican astronomers. I'm not big on the whole predestination, Cycles Control All gig, myself.
i'm familiar with prechter. he's been swinging and missing a lot. i'm not into cycles or TA either.

i can see a large inflation adjusted loss spanning the last decade though. wonder if prechter predicted that? probably not.
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Old 06-05-2010, 03:12 PM   #16
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i'm familiar with prechter. he's been swinging and missing a lot. i'm not into cycles or TA either.

i can see a large inflation adjusted loss spanning the last decade though. wonder if prechter predicted that? probably not.
The last time his newsletter recommended traders be long in stocks was in 1997 (S&P 500 at 750-800). He missed the losses of the last decade, as well as the gains of the late 1990s, and 13 years of dividends. Not exactly great.

The Hulbert Financial Digest found that out of 32 portfolios by 25 newsletters, the Elliot Wave Theorist came last for the period 1988-1997, with an annualized return of 5.84%; during that same period, the S&P 500 had annualized returns of 18.04%. That's not particularly good for something that claims to be such a detailed model. He completely missed the most significant bull market in recent history.

To his credit, he outperformed the market during the recent bear cycle, by simply continuing to be out of the stock market. Then again, buy and hold bond investors had similar performance.

Obviously, I don't buy into his Grand Supercycle doomsday forecasts.
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Old 06-05-2010, 03:44 PM   #17
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i'm familiar with prechter. he's been swinging and missing a lot. i'm not into cycles or TA either.
I'm not into cycles either. But I'm a big fan of T&A.
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Old 06-05-2010, 03:58 PM   #18
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I'm not into cycles either. But I'm a big fan of T&A.
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Old 06-05-2010, 09:30 PM   #19
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The last time his newsletter recommended traders be long in stocks was in 1997 (S&P 500 at 750-800). He missed the losses of the last decade, as well as the gains of the late 1990s, and 13 years of dividends. Not exactly great.

The Hulbert Financial Digest found that out of 32 portfolios by 25 newsletters, the Elliot Wave Theorist came last for the period 1988-1997, with an annualized return of 5.84%; during that same period, the S&P 500 had annualized returns of 18.04%. That's not particularly good for something that claims to be such a detailed model. He completely missed the most significant bull market in recent history.

To his credit, he outperformed the market during the recent bear cycle, by simply continuing to be out of the stock market. Then again, buy and hold bond investors had similar performance.

Obviously, I don't buy into his Grand Supercycle doomsday forecasts.
here's another prechter gaffe - Prechter: Gold To Fall 40% From Here

Elliot Wave maven Robert Prechter is usually a dollar bull (despite being a gloomer), and as such he usually dislikes [COLOR=#1d637d! important][COLOR=#1d637d! important]gold[/COLOR][/COLOR].

According to Reuters, Prechter is out with a new call on gold. Specifically, he expects it to fall 40%, saying the metal "is over-owned and overvalued and is about to resume a bear market, if [it] hasn't already."
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