Re: Financial topics
Posted: Mon Aug 03, 2009 1:40 am
Generational theory, international history and current events
http://gdxforum.com/forum/
Higgenbotham wrote:John wrote:I don't want to put words into anyone's mouth, but I believe that
Higgenbotham, Gordo, and freddyv all said some time ago that they
were going short. I imagine that they're all in a great deal of
(financial) pain right now.
Sincerely,
John
And down goes the tax revenues as well - off, in the biggest drop since 1932. Hmmm, that year keeps popping up.I hope I am wrong but how can we ever deal with the debt we as a nation have unless we actually face reality? We are not facing reality and those of us that believe Generational Dynamics is truly predictive should be able to see that this is going to be a long process, just as long as the process that got us into this mess. I believe that the only real mistake John (and I) has made in all of this is not seeing just how long of a process this crisis era will be. It's easy to get caught up in the similarity to history but our crisis era will play out in its own, unique way and will often do what we least expect of it. We will not have a Great Depresson and Hitler; perhaps we will have a Long Depression and a coup?
Maybe it's not too late to rule out your Shanghai scenario:Higgenbotham wrote:... The bubble in Shanghai reached a new high last night and likewise in New York just a few minutes ago, exceeding the historical models I am using as well as (it appears anyway) the likely time window set up by Didier Sornette and others who used different methods to estimate that the bubble in Shanghai would burst between July 17 and 27. If they used 80% probability for that time window, then 7 days beyond it would put it well into the the upper 90's assuming normal distribution of outcomes. ...
The longer the Chinese procrastinate, the less likely they can deflate the bubble in an orderly way. So I don't think it's too late for the scenario, but my posts do show that, try as one might, it is very difficult to time the top of a bubble. I remember what you mentioned about the transaction fees from a couple years ago because I was short at that time and looking for an accident in Shanghai. My timing was off by 2.5 months on that one. To me, the current scenario looks much more dangerous because people are speculating on objects (stock shares) based on a belief in the revival of earnings which have been drastically reduced. So it seems kind of similar to speculating on tulip bulbs or South Sea shares.xakzen wrote:Maybe it's not too late to rule out your Shanghai scenario:
http://www.msnbc.msn.com/id/32262705/ns ... d_business
I remember a few years ago the CCP tried to cool off stock speculation and it's transaction fee increases were blamed for the inevitable crash. They will probably try something different this time with the same results.
--FredRichard Russell wrote: Incidentally, two of the greatest attributes an investor can possess are —
(1) Phenomenal patience. Most amateurs are impatient and they demand action. The desire for action has probably cost more people more money than anything else I know of. Please re-read “Rich Man, Poor Man” article on the home page.
(2) A knowledge of history, and an appreciation of risk. The great fortunes in the stock market have been made in the BUYING. There is no substitute for buying great values. Great values usually present themselves at true bear market bottoms at a time when nobody will touch them
...
We’ve experienced 27 years of generally rising prices from 1980 to 2007, in which profits were easily and readily available. However, over time, the markets tend to even out. Therefore, I foresee a long period ahead when the opposite holds true, and in which it will be very difficult to accumulate profits and very easy to lose money. I hope I’m wrong, but that’s what I expect
I do not believe anyone has ever been successful deflated a bubble (and at least been able to claim credit for having done so). Much as Greenspan complained of "irrational exuberance", several Chinese officials at the time complained about their then stock bubble in 2007(?) to no effect. It wasn't until they imposed the fees that the bubble popped. Again this time they will likely have to limit credit to pop this one.Higgenbotham wrote:The longer the Chinese procrastinate, the less likely they can deflate the bubble in an orderly way.
I agree and the antic dote about the man investing his life savings into the Shanghai bubble is proof.This article also shows something mentioned a month or so ago, that being that nothing at all has been learned in the past 2 years. That's part of why I believe that the "real" generational stock market crash is still coming up.
Higgenbotham wrote:During what I believe were similar stages of the Tulip Bubble and the South Sea Bubble, there appeared open revulsion or formal governmental attempts to curb the bubbles (August 18, 1720 Bubble Act enforcement during the South Sea Bubble for example). So far in China and the US, there is only talk of curbing the bubbles (Chinese authoritites hinted last week and in the US there is HR 1207). Despite my belief to the contrary, the markets still seem unperturbed by HR 1207, swine flu, earnings or anything else. The bubble in Shanghai reached a new high last night and likewise in New York just a few minutes ago, exceeding the historical models I am using as well as (it appears anyway) the likely time window set up by Didier Sornette and others who used different methods to estimate that the bubble in Shanghai would burst between July 17 and 27. If they used 80% probability for that time window, then 7 days beyond it would put it well into the the upper 90's assuming normal distribution of outcomes. But as we know, the world is not normally distributed. I continue to stay short and watch in amazement!