|
|
Why it Is or Isn't Different This Time
02-21-2009, 02:31 PM
|
#1
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
|
Why it Is or Isn't Different This Time
If the current market collapse is "different this time," then there's something to worry about. If it isn't different this time, even if it's as bad as the great depression, there's less to worry about (in the past the market has always bounced back).
So, do you think it's different this time (e.g. peak oil, overpopulation, things got too far out of whack) or not (e.g. hangover from irrational exuberance, normal housing price cycles, naughty bankers)?
__________________
Al
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
02-21-2009, 02:45 PM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
|
I don't have an answer, but I have an idea of what one important indicator might be: Are the basic mechanisms of homeostatis still in place?
- Stable systems have "feedback" systems that lead to renewed stability after being upset. Free markets do this- e.g. if products or labor or capital gets too expensive, then things will self correct. The US economy is robust, and will rebound if left alone.
- The one area that looks like it may have a "negative feedback" loop (thus increasing diversion from stability) is our tax system, political system, and government spending. Once 51% of the people become net "takers" of government payments, they have a direct persoanl interest in voting for more taxes and spending on an ever smaller % of productive people. There's no positive feedback loop here--it accelerates to a very bad end.
|
|
|
02-21-2009, 02:47 PM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
|
__________________
Vietnam Veteran, CW4 USA, Retired 1979
|
|
|
02-21-2009, 03:01 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
|
Quote:
Originally Posted by TromboneAl
So, do you think it's different this time (e.g. peak oil, overpopulation, things got too far out of whack) or not (e.g. hangover from irrational exuberance, normal housing price cycles, naughty bankers)?
|
Let me consult my disco ball. I'll get back to you...
__________________
Numbers is hard
|
|
|
02-21-2009, 03:14 PM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
|
Quote:
Originally Posted by TromboneAl
If the current market collapse is "different this time," then there's something to worry about. If it isn't different this time, even if it's as bad as the great depression, there's less to worry about (in the past the market has always bounced back).
So, do you think it's different this time (e.g. peak oil, overpopulation, things got too far out of whack) or not (e.g. hangover from irrational exuberance, normal housing price cycles, naughty bankers)?
|
Yes - but sometimes it rhymes. Mark Twain or some cat like that - right?
heh heh heh - Leverage in reverse? Or do we stick with da 'pop the bubble' theory? Hmmmm??
|
|
|
02-21-2009, 03:14 PM
|
#6
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
|
I haven't been investing long enough to know what is different this time or not.
But I can say what IS different from the way I was raised - there is too much entitlement mentality in the general public. Maybe it's because I live in the Ultimate Welfare State.
Hard w*rk and its rewards seems to be a dirty concept to many of the younger demographics. "Gimme" just doesn't work anymore.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
|
|
|
02-21-2009, 03:17 PM
|
#7
|
Recycles dryer sheets
Join Date: May 2005
Location: Newport Beach
Posts: 122
|
Quote:
Originally Posted by samclem
I don't have an answer, but I have an idea of what one important indicator might be: Are the basic mechanisms of homeostatis still in place?
- Stable systems have "feedback" systems that lead to renewed stability after being upset. Free markets do this- e.g. if products or labor or capital gets too expensive, then things will self correct. The US economy is robust, and will rebound if left alone.
- The one area that looks like it may have a "negative feedback" loop (thus increasing diversion from stability) is our tax system, political system, and government spending. Once 51% of the people become net "takers" of government payments, they have a direct persoanl interest in voting for more taxes and spending on an ever smaller % of productive people. There's no positive feedback loop here--it accelerates to a very bad end.
|
Unfortunately, I have the same concerns. A year ago I would have laughed at any suggestion that it would be different this time (which is why I was still "buying on the dips"). I am now deeply concerned about the political situation and I really think we are on the brink of a tiping point where more than half the population will be living off the more productive half. That is not a sustainable situation.
Over the past few weeks, a surprising number of friends and family members have told me that they will are planning to materially scale back their work if their state and federal tax burden becomes too much.
|
|
|
02-21-2009, 03:19 PM
|
#8
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2006
Location: Collin County, TX
Posts: 9,296
|
Living my life in my own little world for 51 years I have noticed and believe; there was crap in the past, there's crap now and more than likely there will be crap in the future.
I keep plenty of 2 ply on hand.....
__________________
There's no need to complicate, our time is short..
|
|
|
02-21-2009, 03:27 PM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 5,596
|
Quote:
Originally Posted by freebird5825
I haven't been investing long enough to know what is different this time or not.
But I can say what IS different from the way I was raised - there is too much entitlement mentality in the general public. Maybe it's because I live in the Ultimate Welfare State.
Hard w*rk and its rewards seems to be a dirty concept to many of the younger demographics. "Gimme" just doesn't work anymore.
|
Perhaps Ayn Rand forsaw our future in Atlas Shrugged. "Who is John Galt"?
__________________
I purr therefore I am.
|
|
|
02-21-2009, 03:29 PM
|
#10
|
Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
|
I wonder if, in 1929, anyone wondered whether it was different that time.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
|
|
|
02-21-2009, 03:45 PM
|
#11
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
|
I think things always feel "different this time."
Quote:
Perhaps Ayn Rand forsaw our future in Atlas Shrugged.
|
I thought of that when I saw the "buy American"clause in the stimulus package.
__________________
Al
|
|
|
02-21-2009, 03:46 PM
|
#12
|
Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,715
|
This time is different
Each situation is different. What never changes is human nature.
greed - stupidity - fear - repeat...
This situation was created by excess greed leveraged by excess stupidity. The tools have been more effective than in the past, hence the overachieving results.
What's also different - so far
The entire political leadership of the developed world committed to stop the bleeding and improve the economic outlook.
Most of the leadership of the heavily populated developing countries doing the same.
Most of the leadership of the developing rabble-rousers have refocused their attention from external petro-rousing to internal petro-soothing.
Around 5% of world GDP has now been committed to turning this situation around.
The world will not come to an end, the economies will not collapse, and most people in the US will find their before vs after lives quite similar. We will forget our greatest fears and remember our courage, and after a prudent time, go and make some other stupid mistakes.
I gotta go - having a dinner party tonight, where we will actually spent the whole night talking about something even worse.
|
|
|
02-21-2009, 04:12 PM
|
#13
|
Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
|
Quote:
Originally Posted by freebird5825
I haven't been investing long enough to know what is different this time or not.
But I can say what IS different from the way I was raised - there is too much entitlement mentality in the general public. Maybe it's because I live in the Ultimate Welfare State.
Hard w*rk and its rewards seems to be a dirty concept to many of the younger demographics. "Gimme" just doesn't work anymore.
|
I hate to say, but you just entered oldfartdom. Welcome!
__________________
.
No more lawyer stuff, no more political stuff, so no more CYA
|
|
|
02-21-2009, 04:14 PM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,915
|
Quote:
Originally Posted by TromboneAl
So, do you think it's different this time (e.g. peak oil, overpopulation, things got too far out of whack) or not (e.g. hangover from irrational exuberance, normal housing price cycles, naughty bankers)?
|
There are plenty of differences this time. You've alluded to several. Question is whether the current situation will RESOLVE itself differently than in previous economic downturns and calamities. As I see it, the solutions being tried may exacerbate the problems and cause a worse outcome than doing nothing or at least doing more traditional interventions. Time will tell, of course. It appears that few of us will emerge unscathed, even though many of us did the "right" things - diversification, LBYM, voted, paid our taxes, etc.
I'm a pessimist by trade and someday I'll be right. Hope it's not this time.
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
|
|
|
02-21-2009, 04:31 PM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
|
Quote:
Originally Posted by Martha
I hate to say, but you just entered oldfartdom. Welcome!
|
Yep - starting hearing that from 1953 on - I didn't cut the grass short enough - tryed to lower the agree on price - told me to come back on payday for my money, etc,etc - never liked old farts.
Except for the Norwegian widow who paid well - in cash and didn't ask the impossible lawn/edging wise.
But now being an old phart myself - I have a Curmudgeon Certificate downloaded from this very forum - and I'm ready:
You young whippersnappers- - .
heh heh heh -
|
|
|
02-21-2009, 05:35 PM
|
#16
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
|
Quote:
Originally Posted by Martha
I hate to say, but you just entered oldfartdom. Welcome!
|
I am honored...
I may have to get creative (like Khan's diploma a ways back) and do up an Old Fart card for myself...but, on the other hand, that sounds too much like w*rk.
I have a looooooooonnnnnnggggg ways to go til I even begin to approach curmudgeon status, though.
I'm way too lightfooted (or lightheaded ) to let that catch up with me yet.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
|
|
|
02-21-2009, 11:58 PM
|
#17
|
Moderator Emeritus
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,873
|
Quote:
Originally Posted by unclemick
But now being an old phart myself - I have a Curmudgeon Certificate downloaded from this very forum - and I'm ready:
You young whippersnappers- - .
heh heh heh -
|
Ah, I always like to keep an older phart around so I can be a whippersnapper to someone.
What was it Lincoln said when he freed the retirees? you can be a whippersnapper to some of the people all of the time, some of the people all of the time but you can't be a whippersnapper to all of the people all of the time.
|
|
|
02-22-2009, 02:24 AM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2006
Posts: 7,733
|
Quote:
Originally Posted by CuppaJoe
Ah, I always like to keep an older phart around so I can be a whippersnapper to someone.
What was it Lincoln said when he freed the retirees? you can be a whippersnapper to some of the people all of the time, some of the people all of the time but you can't be a whippersnapper to all of the people all of the time.
|
If Lincoln freed the retirees what has Obama done?
Proud to still be a whippersnapper for 6 months and 5 days.
|
|
|
02-22-2009, 05:41 AM
|
#19
|
Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
|
Since I missed the "last time" by a few decades (but heard a lot of "real life" stories from the family). This time I am here so, referencing the old tales I heard, it is different. Since we are all "living it" now and the impact is different for everyone it remains to be seen if it ends differently. Frankly, my fear is that there are way too many "cooks in the kitchen" on this one. Seems like every one is an "official" in the Government and has way different ideas on what to do. Even the Politicians "in control" are starting to argue among themselves in public - not a good sign IMHO.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
|
|
|
02-22-2009, 07:18 AM
|
#20
|
Thinks s/he gets paid by the post
Join Date: Jul 2004
Posts: 1,558
|
Yup -trying to control the second order response in the middle of the severe oscillations and not knowing the effect of the input - will it go into a positive control feedback loop or a negative control feedback loop - the former allowing for an orderly return, the latter to possible out of control acceleration. This is crazy - and scary.
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|