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Old 08-20-2010, 01:29 PM   #21
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Dex, I seem to remember reading in a previous post that you wanted to pull out of the market by the end of August, did you decide to do it? I am getting nervous again.
So am I - I'm thinking of averaging out of my stock mutual funds next week and bond mutual funds the following week - I'd like to get the dividends if it looks reasonable to do so. The bond mutual funds are Corp High Yield funds and Pimco Emerging Markets Bonds - both have been good to me.
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Old 08-20-2010, 01:32 PM   #22
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I would really like it if there was a speaker who offer an opposing view to Ferguson's using the same techniques - history, economics, politics, human nature.
Paul Krugman is Fergusons's nemesis, but he doesn't know history, his viewpoint is more a narrow Keynesian political/economic one.
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Old 08-20-2010, 01:33 PM   #23
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I like history and stock market technical analysis because it is intellectually challenging as you say and to see what I can glean about now and the future.

I would really like it if there was a speaker who offer an opposing view to Ferguson's using the same techniques - history, economics, politics, human nature. But that type of opposing view has not been presented. Usually, what we get is something like 'People in the 60s said we would all starve because of over population but science solved that problem. We will be OK in the future.' I don't know how to classify that type of retort but it doesn't work for me.
I certainly remember a lot of dire outcomes predicted over the decades that didn't come to pass. It's a valuable lesson in that things usually DO NOT turn out as expected.

For me - I don't try to say "We will be OK in the future". That is just fortune telling again from the optimistic side.

IMO it's more useful to admit that we can't predict the future - positive or negative. When you admit that, you realize most of the future is really out of your hands, and it is better to focus on the here and now and daily life. It does mean that you have to trust yourself to deal with things as they happen, rather than trying to anticipate a large number of possible future scenarios and figuring out what to do ahead of time. The latter approach can become exhausting if you don't watch it.

I'm not saying I never think of how I would react if X occurred. Scenarios pop into my head all the time. As an engineer I was very good at anticipating things that could go wrong with a design, and I had very good debugging skills, so thinking of possible outcomes comes naturally to me. It's just that I spend the minimum amount of time and energy on it, and move on with my life. Especially as so much of it is completely out of my control.

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Old 08-20-2010, 01:41 PM   #24
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Paul Krugman is Fergusons's nemesis, but he doesn't know history, his viewpoint is more a narrow Keynesian political/economic one.
Yes, I've read his writings and agree - they lack the depth of Ferguson's presentations.

I don't see how Paul Krugman is Fergusons's nemesis. Ferguson talks about historical characteristics of nations and the implications. Krugman is more about a current problem and how to get beyond it.
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Old 08-20-2010, 01:54 PM   #25
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I don't understand Ferguson's definition of 'collapse'. That we won't be the cops of the world? Suits me. If other nations develop strong economies and lift their citizens from privation, not a problem even if our consumption decreases.

What does concern me is civil disorder resulting from the failure to employ many of our citizens. That kind of collapse worries me. Krugman is focused on that immediate risk.
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Old 08-20-2010, 01:59 PM   #26
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So am I - I'm thinking of averaging out of my stock mutual funds next week and bond mutual funds the following week - I'd like to get the dividends if it looks reasonable to do so. The bond mutual funds are Corp High Yield funds and Pimco Emerging Markets Bonds - both have been good to me.
May I ask where you will park the cash?
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Old 08-20-2010, 02:01 PM   #27
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I don't understand Ferguson's definition of 'collapse'. That we won't be the cops of the world? Suits me. If other nations develop strong economies and lift their citizens from privation, not a problem even if our consumption decreases.

What does concern me is civil disorder resulting from the failure to employ many of our citizens. That kind of collapse worries me. Krugman is focused on that immediate risk.
My guess is his example of what happened to the UK.

The difference or unknown factor it the world interdependence we have now versus what the world was like from the mid 1940s - 1960ish
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Old 08-20-2010, 02:01 PM   #28
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Yes, I've read his writings and agree - they lack the depth of Ferguson's presentations.

I don't see how Paul Krugman is Fergusons's nemesis. Ferguson talks about historical characteristics of nations and the implications. Krugman is more about a current problem and how to get beyond it.
They take pot shots at one another.
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Old 08-20-2010, 02:07 PM   #29
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They take pot shots at one another.
Just like here on E-R.org...
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Old 08-20-2010, 02:10 PM   #30
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May I ask where you will park the cash?
Money market funds - my main concern is capital preservation. If my thinking is correct, the stock market could go down until Dec. I would then average into High Yield Corp Bonds and possibly a little into the Pimco Emerging Market Bond fund.

My thought is that we are in a secular bear trend since 2000. If my memory serves me secular bears have lasted between 13 - 18 years. Some people are talking about a bottom between '13 - 16.
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Old 08-20-2010, 02:16 PM   #31
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My thought is that we are in a secular bear trend since 2000. If my memory serves me secular bears have lasted between 13 - 18 years. Some people are talking about a bottom between '13 - 16.
My thoughts exactly.

Thanks for the answers.
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Old 08-20-2010, 05:30 PM   #32
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I didn't want to invest 44 minutes in a video, so I looked for a transcript somewhere. Instead, I found this talk by Ferguson http://www.piie.com/publications/pap...guson-2010.pdf

Which includes:
Quote:
Milton Friedman famously says, and we have at least one of his pupils in the room,
that inflation was always and everywhere a monetary phenomenon. I want to suggest
to you that public debt crises are always and everywhere a political phenomenon.
They’re consequences of political weakness. Excessive expenditure and insufficient

taxation, failures to make decisions about unsustainable fiscal policies are political; they are not the results of profound economic processes.

That strikes me as true. I remember the stagflation of the 1970's and a book by Lester Thurow which said we know how to solve our problems, we just don't have the political will. Then, along came Paul Volcker and RR who seem to have had the will, and the stagflation came to an end.

I'd like to believe that we'll find an elected person who's willing to say "tax more, spend less" but I haven't seen that person yet.

My personal financial plans include occaisional self-reminders that I can live pretty economically and still live as well as my parents.
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Old 08-20-2010, 06:30 PM   #33
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The "Doom & Gloom" crowd seems to be missing a couple of points:

The U.S. and its economy are still the major economic/military force in the world. That will change some day, and we certainly can see problems ahead. But right now, most other countries seem poised to go down the toilet sooner than us. And yet, they mostly haven't.

Even when a country undergoes an economic crisis, many people manage to live reasonably well and enjoy life. We are so much above subsistance living that most of us have a big cushion before dropping down to the level that most of the earth has been living at for centuries.
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Old 08-20-2010, 06:50 PM   #34
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I apparently can't resist continuing to ask - "what's the point?"

Audrey
To sell his latest book. To garner speaking engagements. To be interviewed by major news shows. To be seen a trusted source of information.

What was the point for Roubini? The same.

Not to take away from the abilities of either Ferguson or Roubini. They do believe what they are espousing. It is intellectually challenging to follow the arguments. It does not provide any of us with protection for events that may/may not happen -- but it does provide the all of us with 'context.'

And context helps me cope with the stresses when they happen.

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Old 08-20-2010, 06:52 PM   #35
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I didn't want to invest 44 minutes in a video, so I looked for a transcript somewhere. Instead, I found this talk by Ferguson http://www.piie.com/publications/pap...guson-2010.pdf

Which includes:

That strikes me as true. I remember the stagflation of the 1970's and a book by Lester Thurow which said we know how to solve our problems, we just don't have the political will. Then, along came Paul Volcker and RR who seem to have had the will, and the stagflation came to an end.

I'd like to believe that we'll find an elected person who's willing to say "tax more, spend less" but I haven't seen that person yet.

My personal financial plans include occaisional self-reminders that I can live pretty economically and still live as well as my parents.
Thanks for posting that link. He talks more about the future in it.
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Old 08-21-2010, 11:18 AM   #36
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Originally Posted by dex View Post
I would really like it if there was a speaker who offer an opposing view to Ferguson's using the same techniques - history, economics, politics, human nature. But that type of opposing view has not been presented. Usually, what we get is something like 'People in the 60s said we would all starve because of over population but science solved that problem. We will be OK in the future.' I don't know how to classify that type of retort but it doesn't work for me.
My issue is with the past performance of predictions in general. A vast majority of them do not come true. So, for me, looking for an opposing point of view is moot - that may not come true either.


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My guess is his example of what happened to the UK.
So what did happen to the UK? It lost its "empire", but the UK is still one of the richest countries in the world, has a strong social safety net and is a heck of a nice place to live in. Was the result so bad? imho, I don't think so.

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It's kind of funny, because I live along a dangerous border. It's not dangerous here, but things are perilous not far away. I could see things "blowing up suddenly" along the TX border. That possibility seems a lot more immediate and probable to me than US civilization collapsing soon. Yet I live with it. Audrey
There is a name for this bias that we have as humans, but I can't think of it right now. We worry less about risks that have a higher probability of happening (dying by oneself in a car accident) than those that have greater impact, but a far lesser probability of happening. (dying in an airplane crash along with 300 others)

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Thanks for posting that link. He talks more about the future in it.
Thanks. Personally, I don't like Niall's speaking style, but enjoy reading his articles. I have to get to The History of Money one of these days.
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Old 08-21-2010, 12:04 PM   #37
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I have to get to The History of Money one of these days.
It's likely to be a long book, a very ancient Egyptian coin was found in Israel recently.
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