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In the newsletter Shilling points out that the deflation we're seeing so far is normal, garden variety recessionary type. We get it every recession, it won't be until next year that we see if it turns into chronic deflation of 2%-3%. Previously he was predicting chronic deflation of 1-2% 'good'...

This is true. The other fact is the derivatives and credit which are draining from the system. What's the nominal value of OTC derivatives, 60T? Sure derivatives are doubled counted, but it doesn't matter. Halve it, drop it by an order of magnitude, it still dwarfs anything the Fed is attempting...

With Deflation Possibly Near, This Economist Is All Abuzz - WSJ.com I subscribe to his economic outlook newsletter, and he's done pretty well so far. Being forewarned on the housing and credit bubble I sold my house and investments three years ago, putting it all into 30 year treasuries. Insert...

Likely another suckers rally Calculated Risk: Roubini: "Reflections on the latest sucker’s rally" 'The Treasury Bubble' - that's funny.

Regarding re-running the simulation with updated data, take an extreme example for illustration. Somebody starts out with $1M and the next year it crashes to $40k (like I said - extreme example). So now that retiree can continue to spend his SWR 4%/$40k per year secure in the knowledge that he...

That's a very interesting question! Initial capital is obviously critical. I think what you are seeing is that since a monte carlo simulation is statistical, it's 'not expecting' that in the first year you ER the portfolio drops by 40%. It predicts that the first year will be some average of the...

I don't think this will match the depression, but I don't see how the data at Doug Shorts site (that I've been following for a long time) makes any prediction. I guesstimate that ultimate bottom on the S&P is around 600, which is what, 70% down maybe.

This time it'll probably stick. Pre-crash (2007), the average baby boomer retirement account was about $55k, I don't have the number but now it's probably around $35k since those accounts were heavily weighted (>60%) towards stocks. Additionally the cat is finally out about pension funds, which...

I think that's a little long - I reckon 2.5 years instead of three. Roubini held his forecasts back previously, because at the time (2005) he would have been slammed as a total kook if he would have told the truth (as all of us non public figures were). Now that it's obvious to everybody I think...

"as the WSJ says, inside a 20% chance of this turning into a depression" There's no good definition of a depression, but a recession lasting more than two years should classify as one. This probably won't end until sometime next year, so it probably counts. But that's just a name. It is what...

Everything is in cash or short term bonds at the moment. I'm waiting until stocks look like an attractive buy, then will diversify more.

The negative GDP growth will probably last until sometime next year, which would probably classify this as a depression because of it's length. But in the end I doubt it will be considered a 'Great' depression, more of a mild one. After that we'll probably enjoy sluggish growth and some form of...

Don't be silly.

Even health care isn't safe. A friend is a nurse; local nursing staff is getting cut back. One in outright layoffs (elective surgery nurses), and two is nurses aids. The loss of the aides means the nurses have to work harder, and I imagine it ripples up to the doctors.

I won't post about my case having been burned on that. But for people who want to learn from this experience, I can offer some thoughts People generally take extreme positions - either you can't predict anything, or you can predict what will happen tomorrow. People on this board seem to fall...

According to Haver Analytics (I believe, don't have the research in front of me), between 1982 to 2000 if you had bought 30 year zeros, and simply sold them and reinvested back into zeros at the end of the year, you would have beat the S&P by a factor of 4 (4X). Pretty good results during the...

I recall plenty of posts where people talk about their success. Isn't that the one of the points? Share your successes and failures? I've talked about my failures such as during the dot.com bust - but wait a minute, before REWahoo consults the history channel, maybe I'm forgetting and I did that...

I don't think I've said I think stocks will be lower, if I did I misspoke. What I believe rather is that stocks still aren't a good deal. They can go up this year for all I care, I don't think the risk/reward is worth it yet. But if they go down further then I'll invest again, because then I...

I never understood this thinking - I don't mean it's not valid, but maybe I just don't get it. Hypothetically, say you sold stocks now - 'locking in losses' as you say. But then you put it in something that doubles (say) while stocks stay flat or continue to decline. Then you shift over to...

indeed. Anybody who thought in years past (not me, but many WS wonks) that the 25 year consumer overspending was a sustainable trend was a fool.

What, no negative inflation rate choices? You guys are ever the optimists ... :whistling:

Correct. These guys are very good. Fearing a housing bubble they sent their team across the country to see what it's like locally - guess what they found? So they invested for a housing bubble. Then they invested for a systemic crash. Unfortunately they kept out of Treasuries, and bought...

Hmmm, he's not trying to sell something, is he? Never mind ...

Looks like he's using the Shiller data - dshort.com - Financial Life Cycle Planning I haven't checked what Shiller bases his on. I think it's used in FIRECalc though, for instance.

What reversion to the mean is he talking about? The S&P has actually been above long term trend for a decade or more. S&P Regression to Trend | The Big Picture