Originally Posted by Devil's Advocate

Originally Posted by Mike Alexander '59

S&H, working in the late 1980's, could clearly see that there was a crisis that began around 1930 and an Awakening that began in the late 1960's. They could do this because they were observing these periods with decades of hindsight (that the 1933 observer lacks).

The 1933 observers did observe the "cycle" in real-time. Since the crisis of 1933 revolved around the economy, wrt the Industrial Revolution, it was strongly believed and argued at the time that government intervention could possibly break the cruel consequences of the business cycle. Stuart Chase, writing in his 1932 book, A New Deal, noted the cycle precisely:

• Who can give offhand the prosperous years of the last century? Only a few cloistered students. But we all remember the dates... about the first of this particular variety of morning after: 1893, 1873, 1857, 1837, and some of us the panic of 1819.

These same dates are still being echoed today (check out the article William Strauss posted here) wrt the political cycle.

Previous to 1929, the U.S. economy suffered a depression or severe recession nearly 10 out of every twenty years. Today that ratio is down to about 3 out of 20 years, with much less severity. It would appear, the boom and bust of the 1933-40 period notwithstanding, this attempt to tame the business beast was largely successful.

And thus, proves that many understood exactly where they were wrt to the cycle in the real-time world of 1933. More here.

Ah I now see where you have been going. First of all the economy did not slump after the 1987 crash, no more than it did in 1998. The dates you note: 1819, 1837, 1957, 1873, 1893 are the panic dates. Two are missing, 1907 and 1929. So you see 1907 is just another one of the recurring panics that are spaced 18 years apart. This 18 year cycle is related to a cycle in land values, speculation and construction activity. I talk about it in a two part article back in 2002.

I explicitly relate it to S&H turnings in my third and fourth books. I also relate them to the Schlesinger cycle. When you point out that we don't see the panic dates anymore you are partially right. Because of government economic management, panics are a thing of the past. We don't see big economic fluctuations anymore. If you plot GDP relative to trend you will see how the oscillations damped way down after WW II. On the other hand, stock market oscillations have greatly increased in recent decades. Since 1920 the secular market trends have become very pronounced, and since 1929 have averaged 18 years in duration. In fact what has happened is one set of important financial dates the Panics in 1819 1837 1857 1873 1892 1907 and the Crash of 1929 has been replaced by another set of important financial dates, the secular trend turning points: 1929 1949 1966 1982 2000

I identified one of these turning points in real time in my first book subtitled "why stocks won't beat money markets for twenty years". It's been five years since I wrote that book and so far my prediction is dead on. Stock returns since 2000 have sucked just as land speculation sucked after every one of those 19th century panic dates.

Its when you put together the two important financial dates and look at it with "saecular" eyes that you can see something:

1819 1837 1857 1873 1893 1907 1929 1949 1966 1982 2000
1822 1844 1860 1865 1886 1908 1929 1946 1964 1984 ????

And then you can look at the Schlesinger cycle dates:

1828 1840 1860 1872 1901 1919 1931 1946 1961 1980 ????
1819 1837 1857 1873 1893 1907 1929 1949 1966 1982 2000
1822 1844 1860 1865 1886 1908 1929 1946 1964 1984 ????

As I said before the Schlesinger cycle is pretty variable in length, but as S&H noted it seems to keep pace with the saeculum. This tendency for the cycle keep pace can explain why Schlesinger was wrong about 1992. He considers the super long conservative era in the late 19th century as an anomaly. So he thinks that both kinds of eras are roughly 15-16 years long. His father noted the 1946 election as a liberal--> conservative shift and forecasted the reverse shift in 1962 and back the other way in 1978. These dates were pretty good. If you add 15 years onto 1978 you should look for the shift back from Reaganism in about 1993. Can you see why Schlesinger believed liberalism was back when Clinton won in 1992?

If you use the 18 year timing you would note that a pair of eras (the actual cycle) runs 36 years on average. If we start with the conservative to liberal shift in 1860 we would look for the next shift in the same direction in 1896. It happened in 1901, five years later. The next shift should happen in 1932, which it pretty much did. The next one should happen in 1968. It happening seven years early. The next one should occur around 2004, but could run anywhere from 7 years early to 5 years late or 1997-2009. This analysis shows that expecting a conservative to liberal swing in 1992 was way too early. Such a shift could happen now and it could happen in 2008 or even after and not be greatly out of line with past variations.

Originally Posted by Peter Gibbons

We can determine generational boundaries by looking at the cohorts and how they are behaving and reacting against archetypal patterns. S&H do it, and I don't see a problem with this. If you do, then you seem to have a serious problem with S&H methodology, unless I am misunderstanding you.

And they do this by considering the cohort biographies over entire lifetimes. So you will notice that I didn't change the Silent dates. The earliest generational boundary I changed was the Boom/Xer division. This is my age group. I don't consider that my peers are largely done having an impact on the world. Much of what we will do is still in the future. This is even more true of later cohorts. Suppose a 1968 cohort plays a major GC role. This alone is strong evidence that the Boomer/Xer division should be moved forward, because being a GC is a major saecular role. Prophets play major roles in elderhood and you really can't define their birth years until you can see what they did in elderhood.

I think right now S&H have the boundaries pretty much right. But we simply don't know what Boomers are going to do in elderhood, just as we don't know what Xers are going to do over two thirds of their adult lives. As for Millies most of them are still children.

Much of what will determine Xer or Millie is the role they will play in the Crisis. If the crisis is 15 years away, 1982 cohorts like Robert Reed aren't going to play a grunt role, but rather more of a midlevel manager role. And that will make them Xers, not Millies.

Originally Posted by Mike Alexander '59

Ah I now see where you have been going. First of all the economy did not slump after the 1987 crash, no more than it did in 1998. The dates you note: 1819, 1837, 1957, 1873, 1893 are the panic dates. Two are missing, 1907 and 1929. So you see 1907 is just another one of the recurring panics that are spaced 18 years apart. This 18 year cycle is related to a cycle in land values, speculation and construction activity. I talk about it in a two part article back in 2002.

Actually, you missed my larger point, but more on that later. I don't recall a panic in 1998, but I do recall the NASDAQ burst in 2000. Also, another important date is missing: 1921 (I re-checked A New Deal and Chase had indeed included it).

Originally Posted by Mike Alexander '59

I explicitly relate it to S&H turnings in my third and fourth books... Since 1920 the secular market trends have become very pronounced, and since 1929 have averaged 18 years in duration. In fact what has happened is one set of important financial dates the Panics in 1819 1837 1857 1873 1892 1907 and the Crash of 1929 has been replaced by another set of important financial dates, the secular trend turning points: 1929 1949 1966 1982 2000.

A market panic followed, four years after your 1966 date in April, 1970, and five years after your 1982 date in October 1987. But 1949 signaled the beginning of seven fat years, and while the post-2000 bull market stalled (resulting in a brief six month recession), it has fully recovered despite 9/11, scandal and two wars. And how does 1929 compare to the reality of the other dates???

Originally Posted by Mike Alexander '59

Its when you put together the two important financial dates and look at it with "saecular" eyes that you can see something:

1819 1837 1857 1873 1893 1907 1929 1949 1966 1982 2000
1822 1844 1860 1865 1886 1908 1929 1946 1964 1984 ????

And then you can look at the Schlesinger cycle dates:

1828 1840 1860 1872 1901 1919 1931 1946 1961 1980 ????
1819 1837 1857 1873 1893 1907 1929 1949 1966 1982 2000
1822 1844 1860 1865 1886 1908 1929 1946 1964 1984 ????

I highlighted what I consider to be some pretty big allowance for slop. The other dates are so close, what accounts for the slop? An anomaly?

My larger point was to suggest that observing long lasting trends is much more important than keying in on actual dates (however important they are). For example, the trend toward the new deal initially began in the 1880s with the publication of Das Kapital, rising labor movements, tinkering with a silver standard, and the rise of Fabian-like socialist etc etc. These trends waxed and waned through the ensuing years (like when Cleveland returned to the gold standard), yet seemed to climax during the twenty-some year span from 1929 to 1950.

Politically, the fact that the Democrats were given control of Congress for forty years following this climax suggests these powerful trends were driven locally while being very long lasting.

Contrast those tends, and how they played out, to the new trends began in the aftermath of Vietnam, and one ought to be able to get a bead on exactly where we are relative to where Stuart Chase and others saw in 1933. Identifying the trends are the most important aspect to seeing where we are headed (not a specific date at which time they will end or climax).

Originally Posted by Mike Alexander '59

Originally Posted by Peter Gibbons

We can determine generational boundaries by looking at the cohorts and how they are behaving and reacting against archetypal patterns. S&H do it, and I don't see a problem with this. If you do, then you seem to have a serious problem with S&H methodology, unless I am misunderstanding you.

And they do this by considering the cohort biographies over entire lifetimes. So you will notice that I didn't change the Silent dates. The earliest generational boundary I changed was the Boom/Xer division. This is my age group. I don't consider that my peers are largely done having an impact on the world. Much of what we will do is still in the future. This is even more true of later cohorts. Suppose a 1968 cohort plays a major GC role. This alone is strong evidence that the Boomer/Xer division should be moved forward, because being a GC is a major saecular role. Prophets play major roles in elderhood and you really can't define their birth years until you can see what they did in elderhood.

I think right now S&H have the boundaries pretty much right. But we simply don't know what Boomers are going to do in elderhood, just as we don't know what Xers are going to do over two thirds of their adult lives. As for Millies most of them are still children.

Much of what will determine Xer or Millie is the role they will play in the Crisis. If the crisis is 15 years away, 1982 cohorts like Robert Reed aren't going to play a grunt role, but rather more of a midlevel manager role. And that will make them Xers, not Millies.

So this is where we disagree, but only by degree (did that rhyme?).

I can definitely see the the Xer/Millie boundary move as it is probably yet to solidify, but I think that a boundary like the Boomer/Xer (and beyond) is already pretty much set.

If a '68er were to play a key leading role in this 4T then I'd say we probably didn't have a real GC in such a person since there is no way in hell the 1968 cohort is Prophet-like or ever will be. Trust me on this one, I'm one of them and been around them all my life.

However, there is room for what S&H call those of a "suppressed" nature [see Generations] in the '68 cohort who may have more in common with the Prophet demeanor than the Nomad one typical for their age group. It is only in this strange way that I could see a '68er GC.

Also, as for Robert Reed going Nomad on us, keep in mind that many a member of the Hero GI's were pushing into their forties by the end of WWII.

But as this may weaken your original argument regarding Robert, it actually underscores your point about the fluidity of generational boundaries, at least up to some point. I doubt the cohorts from the early oughts were anything more than Nomad cuspers up to WWII, but the extending of the draft age up to 45 probably pulled several cohorts over the border expanding the Hero archetype upwards a few notches. We in retrospect see the GI's beginning at 1901.

Originally Posted by Devil's Advocate

Also, another important date is missing: 1921 (I re-checked A New Deal and Chase had indeed included it).

Yes 1921 is a secular trend turning point. The actual bottom was Dec 1920, but most people use 1921.

A market panic followed, four years after your 1966 date in April, 1970, and five years after your 1982 date in October 1987.

They certainly did, but neither 1970 not 1987 were secular trend turning points. They reflect the ordinary bull/bear market trends.

and while the post-2000 bull market stalled (resulting in a brief six month recession), it has fully recovered despite 9/11, scandal and two wars.

How so? The major indices are well below their 2000 highs. In a secular bull market, the market recovers from ordinary bear markets (like that in 2000-2002) and goes on to significant new highs in constant dollar terms. In a secular bear market this fails to happen.

If the post 2000 era is going to be a secular bear market (as I forecast in 2000) we won't see the S&H move above 1900 by the end of this decade. In fact, I don't expect the S&P to move above 1900 before 2018.

Originally Posted by Mike Alexander '59

Its when you put together the two important financial dates and look at it with "saecular" eyes that you can see something:

1819 1837 1857 1873 1893 1907 1929 1949 1966 1982 2000
1822 1844 1860 1865 1886 1908 1929 1946 1964 1984 ????

And then you can look at the Schlesinger cycle dates:

1828 1840 1860 1872 1901 1919 1931 1946 1961 1980 ????
1819 1837 1857 1873 1893 1907 1929 1949 1966 1982 2000
1822 1844 1860 1865 1886 1908 1929 1946 1964 1984 ????

I highlighted what I consider to be some pretty big allowance for slop. The other dates are so close, what accounts for the slop? An anomaly?

Maybe (see below). Alternately it could be the nature of the animal. Real-life correlations generally are messy.

My larger point was to suggest that observing long lasting trends is much more important than keying in on actual dates (however important they are).

This is exactly what I do. The dates are merely the times of trend changes. It's short hand for discussing this sort of data on a message board. Generally I plot the data, showing the trends and then label the turning points. In the text I will use the dates.

For example, the panic dates are linked to cycles in land value/real estate activity. The cycle was first noted by Simon Kuznets in 1930 and described in detail by Homer Hoyt in 1933. The panics themselves are not turning points, they are simply spectacular features that everybody remembers. The actual trend changes would be the tops (1818 1936 1854 1872 1890 1907 1925) and bottoms (1819, 1842, 1857, 1877, 1896, 1917, 1933) of the cycle. If these are used for the pre-1929 dates we get

1828 1840 1860 1872 1901 1919 1931 1946 1961 1980 (political cycle)
1822 1844 1860 1865 1886 1908 1929 1946 1964 1984 (S&H saeculum)
1819 1837 1857 1873 1893 1907 1929 1949 1966 1982 2000 (panic-based Kuznets cycle then Stock Cycle)
1818 1836 1854 1872 1890 1907 1929 1949 1966 1982 2000 (Kuznets cycle tops then Stock Cycle)

1819 1842 1857 1877 1896 1917 1929 1949 1966 1982 2000 (Kuznets cycle bottoms then Stock Cycle)
1822 1844 1860 1877 1894 1912 1929 1946 1964 1984 (modified saeculum)
1828 1840 1860 1872 1901 1919 1931 1946 1961 1980 (political cycle)

Using the bottoms gives a good alignment between the political cycle and the economic cycle over the time period you highlighted, with the saeculum dates coming early. But these dates are early because S&H have the Civil War crisis so short. If they included Reconstruction they would have a 1860-1877 crisis, which is of more normal length. If I then divide the 1877-1929 period into three equal pieces the get the turnings between the Civil War and Depression Crises I get the alternative saeculum I show above. And the "anomalous" deviation disappears.

But to do this I had to use a different set of dates that the ones Chase uses. Although his dates don't in and of themselves have the same meaning (in terms of trend changes) as the others, they are the "flashy" dates that people remember and the ones you cited. So I started with those. And not only that, but then I dumped S&H's civil war anomaly, which I have always thought was a weak part of their theory. But with all this extra stuff it starts to look like hand wavings, which is why my alternate response was that real-life data are messy.

For example, the trend toward the new deal initially began in the 1880s with the publication of Das Kapital, rising labor movements, tinkering with a silver standard, and the rise of Fabian-like socialist etc etc. These trends waxed and waned through the ensuing years (like when Cleveland returned to the gold standard), yet seemed to climax during the twenty-some year span from 1929 to 1950.

But no it didn't. Strictly speaking there is no trend, what exactly are you plotting here? What quantities are either rising or falling? You are using the term trend to represent a concept, an interpetation of a complex series of events. It is not an actual objective "thing". Another observer might not see what you see when looking at the same set of events.

Politically, the fact that the Democrats were given control of Congress for forty years following this climax suggests these powerful trends were driven locally while being very long lasting.

I don't ascribe the same sort of meaning to this period as you do. It's not like the GOP had been dominant before 1952. They managed to hold Congress for one term in 1947-48 and one in 1951-52. Big Deal.

Contrast those trends, and how they played out, to the new trends began in the aftermath of Vietnam, and one ought to be able to get a bead on exactly where we are relative to where Stuart Chase and others saw in 1933. Identifying the trends are the most important aspect to seeing where we are headed (not a specific date at which time they will end or climax).

Obviously one would like to pick the relevant phemonoma to examine. But the sort of things you focus on are colored by your political desires. To a certain extent, you can only see what you want to see, just as Schlesinger couldn't see the significance of the long conservative era in the late 19th century.

Originally Posted by Peter Gibbons

...there is no way in hell the 1968 cohort is Prophet-like or ever will be.

Originally Posted by Peter Gibbons

A 1987 cohort member can consider themselves a Silent. That doesn't make it so.

So, if a 1987 cohort believes his cohort is really X, this doesn't make it so, but if a 1968 cohort thinks this, it does?

If a '68er were to play a key leading role in this 4T then I'd say we probably didn't have a real GC in such a person since there is no way in hell the 1968 cohort is Prophet-like or ever will be.

Playing a visionary leadership role in elderhood is part of the definition of what it is to be a prophet. Cohorts who did this 140 years ago are identified as prophets. If a 1968 cohort played such a role and you ignored it, that would be inconsistent. Consider FDR. Had he been born in 1883 would he be Lost, or would S&H have made the division in 1883/84 instead of 1882/83?

Originally Posted by Mike Alexander '59

Originally Posted by Peter Gibbons

...there is no way in hell the 1968 cohort is Prophet-like or ever will be.

Originally Posted by Peter Gibbons

A 1987 cohort member can consider themselves a Silent. That doesn't make it so.

So, if a 1987 cohort believes his cohort is really X, this doesn't make it so, but if a 1968 cohort thinks this, it does?

I can say I'm French, but that will not make me French. I can say I am a '68er Silent, but that does not make me one. There is nothing about me that can help me pull off being French (trust me on that one). And there is nothing about the '68 cohort, to which I belong, that makes it in any way archetypally Artist. And since "age location" is just that, a location (if 4th dimensionally), I cannot correctly say I belong in the Silent location because I am simply not there. I can say it, but it would make as much sense as saying "I am currently standing on Pluto".

That said, ever flavor of archetypal demeanor exists in varying degrees in every generation. It's just that non-type traits are "suppressed", not common, not encouraged. Things get fuzzy at cusps, but that's about it. The Prophet characteristics normally suppressed in core Xers are more common, if still overshadowed, in early cohort "late Joneser" Xers. But I'd say these folks are still Xers (more on that at the end of the post).

Originally Posted by Mike Alexander '59

If a '68er were to play a key leading role in this 4T then I'd say we probably didn't have a real GC in such a person since there is no way in hell the 1968 cohort is Prophet-like or ever will be.

Playing a visionary leadership role in elderhood is part of the definition of what it is to be a prophet.

I would reverse this. Most Prophet leaders will play visionary roles in elderhood, but not necessarily all playing visionary roles are Prophets. I don't know how visionary you'd consider George Washington, but he certainly played the role of a Great Crisis Leader (if not exactly a Gray Champion, a term I would specifically reserve for Prophets) and was certainly a Nomad. Sh*t happens. Sometimes history isn't neat, even for the Saeculum.

Originally Posted by Mike Alexander '59

Cohorts who did this 140 years ago are identified as prophets. If a 1968 cohort played such a role and you ignored it, that would be inconsistent. Consider FDR. Had he been born in 1883 would he be Lost, or would S&H have made the division in 1883/84 instead of 1882/83?

Though you may not be implying it that it does, I would still suggest that one person acting a certain way does not an archetype boundary make. I don't know if S&H made the 1882 cohort part of the Mishies solely because of FDR, for example, but if they did, I think it was unwise.

If a fellow '68er played some kind of truly visionary role in this 4T, I would consdier it uncharacteristic but I would not ignore it. I very much doubt that will happen anyway, at least insomuch as his "visionary" characteristics, if he really had them, probably wouldn't be viewed that way by people anyway because of his age location.

One thing I must say to you though, is that I am now quite unsure about the status of the 1961 cohort. This is not because of any one person, but because of a bunch of personalities I'm seeing from that cohort that are acting suspiciously Boomer-like. I've always thought the Boomer/ Xer delineation was extraordinarily blurred (thus the strength of the "Joneser" concept) but I am now questioning the 60/61 cut off. I might be persuaded to move it down a year, but I'm not there yet. Maybe I should start the 61-64 thread back up. :wink:

Good conversing with you as always Mr. A.

Dear Mike,

Originally Posted by Mike Alexander '59

> No. It's OK to invest in a bubble as long as you don't buy near
> the top.

Ummmmmmmmmmmmmmmmm .... and how do you know whether you're near the
top?

Originally Posted by Mike Alexander '59

> Relatively view people seem to have been wiped out in the Nasdaq
> crash.

Insofar as this is true, it proves my point. The whole purpose of a
generational financial crisis is to force all of a civilization's
businesses into bankruptcy, so that the entire civilization will have
to start with a clean slate.

The financial crisis I'm talking about will be like the Great
Depression -- cause massive bankruptcies and homelessness.

You know, I'm having trouble figuring out what you actually believe.
You said in some other note recently that you expect price/earnings
ratios to fall very sharply to the below 10 range. That would be the
financial crisis I'm talking about.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

Dear Vince,

Originally Posted by Vince Lamb '59

> That would result in a re-ordering of secular institutions, but it
> wouldn't be seen as a crisis at the time.

I'm not sure what you mean by this. Could you expand on it?

Originally Posted by Vince Lamb '59

> By that reasoning, a case could be made that WWII started when
> Japan invaded Manchuria in 1931, but that no one realized that a
> world war had started until 1939. Would you consider that to be a
> parallel to what you see going on today?

Yes, I think you're right about this. In fact, if you really wanted
to stretch it, you could say that WW II began with the the
Smoot-Hawley Act of 1930. It was a tariff act, designed to protect
American jobs during the Depression, but it was regarded as a
full-fledged act of war by the Japanese, because it shut down Japan's
biggest cash crop, silk, which they could no longer export to
America. After that, one thing led to another: Japan invaded
Manchuria, America and the League of Nations imposed an oil embargo
on Japan, further crippling their economy, Japan walked out of the
League in 1933, which was clearly done in anticipation of war.

If you ask almost any American what caused WW II, he'll almost
certainly say Hitler. (At that point, I like to ask why Hitler
decided to bomb Pearl Harbor.) But I agree that the war began in the
Pacific before it began in Europe.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

Originally Posted by John J. Xenakis

In fact, if you really wanted
to stretch it, you could say that WW II began with the the
Smoot-Hawley Act of 1930. It was a tariff act, designed to protect
American jobs during the Depression, but it was regarded as a
full-fledged act of war by the Japanese, because it shut down Japan's
biggest cash crop, silk, which they could no longer export to
America. After that, one thing led to another: Japan invaded
Manchuria, America and the League of Nations imposed an oil embargo
on Japan, further crippling their economy, Japan walked out of the
League in 1933, which was clearly done in anticipation of war.

If you ask almost any American what caused WW II, he'll almost
certainly say Hitler. (At that point, I like to ask why Hitler
decided to bomb Pearl Harbor.) But I agree that the war began in the
Pacific before it began in Europe.

Funny thing - this time two years ago I thought plunging into Iraq would be the equivalent of Hawley-Smoot for this 4T.

Originally Posted by John J. Xenakis

You know, I'm having trouble figuring out what you actually believe. You said in some other note recently that you expect price/earnings ratios to fall very sharply to the below 10 range. That would be the financial crisis I'm talking about.

I expect P/Es below 10 by the end of the secular bear market (secular crisis) which would be in the 2018-2020 period. The S&P500 level of today in 2018-2020 would likely show a P/E below 10.

Sean,

If the climax of the Crisis occurs in the 2030's, will 1968 cohorts be in the right phase of life to be performing the manager function that Nomads do in Crisies? They will be age 62-72 during this decade. Suppose by 2050 it is obvious thet the climax of the crisis DID occur in the 2030's. Then how on earth can your cohort rationally be considered to be Nomads.

Suppose the Crisis begins in 2010, 81 years after the last one. It would likely end around 2030, when the oldest Xers will be 69. The last crisis ended an 81-year saeculum and the oldest Nomads were 63. The crisis before that ended a 71-year saeculum for which the oldest Nomads were 43. Had the saeculum been 81 years the oldest Nomades would be 53. The crisis before that ended a 90 year saeculum and the oldest Nomads were 70. Had that saeculum been 81 years long the oldest Nomads would have been 61. So it seems that 81-year saeculae are consistent with the oldest Nomads in the Crisis being 53-63 years old. Thus, a Crisis ending in 2030 should have the oldest Xers being born in the 1967-77 period. On the other hand a Crisis ending in 2020 (consistent with it being underway now) would be consistent with the oldest Xers being born in the 1957-67 period. The 1961 data S&H provides for the first Xers fits in well with a Crisis now, but not one beginning in 2010.

Dear John,

Originally Posted by JTaber 1972

> Funny thing - this time two years ago I thought plunging into Iraq
> would be the equivalent of Hawley-Smoot for this 4T.

I agree with this in the general sense that any 4T period contains
shocks and surprises for both sides.

But it's hard to see that this is a close equivalence. Hardcore
Islamists have a whole list of grievances against America, including
the war in Afghanistan. So if anything is equivalent, it would be
the Afghan war.

But even hardcore Islamists know that America is not going to stay in
Iraq or Afghanistan for long. They know that we don't want to be
there, and that there's a great desire to get out. So that really
isn't their greatest grievance with us.

However, there is one particular grievance that they have that tops
all the others, and that's our unwavering support of Israel.



When the Ottoman Empire collapsed in the 1920s, Islam lost its
"Rome," the Caliphate in Istanbul.

The Islamists look at the map above, and what they see is a huge area
of green, with a tiny red dot in the middle. What the Islamists want
to do is to eliminate that tiny red dot completely, and turn it
green. Then they'd like to join all the green countries together
into one giant new Muslim empire, with the Caliphate located in
Jerusalem.

Nothing else will satisfy them, and our presence in Iraq really has
nothing to do with it.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

Dear Mike,

Originally Posted by Mike Alexander '59

> I expect P/Es below 10 by the end of the secular bear market
> (secular crisis) which would be in the 2018-2020 period. The
> S&P500 level of today in 2018-2020 would likely show a P/E below
> 10.

P/E ratios have been above 20 since 1995. Surely, Mike, you can't
really believe that the P/E ratios are going to be above 20 for
almost 25 years. There's absolutely no historical support for any
such claim.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

Originally Posted by John J. Xenakis

Dear Mike,

Originally Posted by Mike Alexander '59

> I expect P/Es below 10 by the end of the secular bear market
> (secular crisis) which would be in the 2018-2020 period. The
> S&P500 level of today in 2018-2020 would likely show a P/E below
> 10.

P/E ratios have been above 20 since 1995. Surely, Mike, you can't
really believe that the P/E ratios are going to be above 20 for
almost 25 years. There's absolutely no historical support for any
such claim.

Yes I do. There was no historical support for P/Es to rise above 33. Yet they did. You can argue that the late 1990's were a bubble, but so were the late 1920's. And the latter was a bigger bubble because it burst harder. You can argue that Fed rate cuts softened the blow, but do you know that the Fed cut rates immediately after the 1929 crash? And they continued to cut rates afterward, ultimately by about the same amount as they did this time. They did deviate from today's playbook in 1931 and this deviation has figured prominenetly in monetarist criticisms of post-1929 Fed policy.

So why did P/E get so high? I give a possible reason in this article from 2001. These observations are part of the reasons I prefer to use P/R instead of P/E as a long-term valuation tool. Unlike P/E, P/R gave a useful signal in 1999 that the bull market was ending soon. Not only that, but P/R gave a useful signal that the market had gone low enough by summer 2002 for a new bull market to be imminent. as I described in another [url=http://www.safehaven.com/article-84.htmarticle[/url] in Oct 2002.

Shiller's P/E has been not very useful for making effective investment decisions since 1995. So even though I think Shiller's P/E will return to its historical low value by the end of this secular bear market, I make this prediction using P/R, not P/E.

Originally Posted by John J. Xenakis

Dear John,

Originally Posted by JTaber 1972

> Funny thing - this time two years ago I thought plunging into Iraq
> would be the equivalent of Hawley-Smoot for this 4T.

I agree with this in the general sense that any 4T period contains
shocks and surprises for both sides.

But it's hard to see that this is a close equivalence.

I never said it was. I meant it in terms of the wrong thing to do, with repercussions we might not have grasped. You simply laid out some of the repercussions then - there were more than I was aware of.

Dear Mike,

Would you be able to easily bring the following chart up to date?



What's your explanation for the sharp drop in P/R in the late 1910s?
The P/E and P/R values seem to track pretty closely except for that
one period. It looks to me like the definition of "R" (cumulative
retained earnings) changed in that time, possibly because of
trustbusting laws and the income tax?

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com

Originally Posted by John J. Xenakis

Dear Mike,

Would you be able to easily bring the following chart up to date?

The post-2000 dip bottomed at 0.71 and since early 2003 has risen to about 0.95-0.98.

What's your explanation for the sharp drop in P/R in the late 1910s?

Inflation, same as the drop in the late 1970's.

It looks to me like the definition of "R" (cumulative
retained earnings) changed in that time, possibly because of
trustbusting laws and the income tax?

The calculation is the same from 1871 on (when earnings and dividend data become avalable).

Dear Mike,

I'm going to give a very lengthy reply, and with your permission (or,
more precisely, with your forgivenss), I'm going to post it in my
"Objections to Generational Dynamics" thread, since I'd like to keep
all my stuff in one place as much as possible.
http://fourthturning.com/forums/view...=121032#121032

Sincerely,

John

So far all of the most intense Awakenings have occurred during either Saeculum I or Saeculum-I-under-stress: The Reformation, the Puritan, and the Transcendental awakenings. The Boom Awakening was intense, but not quite as intense as those.

Under Saeculum I Prophets are listed as being in the Primacy life phase during an Awakening. They are in the dominant phase of adulthood-who is to restrain them? Indeed, would their dominance have an inflammatory effect on themselves/each other?

In contrast the Saeculum II Prophets are in the relatively weak phase of young adulthood. Adaptives and even a few elder Heros are involved in the Awakening, but they are calmer than the older Prophets of a Saeculum I awakening.

Under Saeculum I the Artist generation is in the Primacy phase. I should think there is a greater chance of a Renaissance during a Saeculum I First Turning than during a Saeculum II First Turning. (Though Artists in the Primacy is probably not sufficient for a Renaissance).

This is not to say that other factors don't affect the intensity of an Awakening, or that all Saeculum I awakenings are more intense than all Saeculum II awakenings. (The Awakeners seem to have had a relatively mild awakening for Saeculum I).

Tim,

I like your analyses.

Thanks

The power of the primacy phase was demonstrated by Renaissance/Reformation, when Saeculum I was released from the restraints of a traditionalist society. Indeed, Saeculum I may have helped the transition from Medieval to Modern.

An implication is that a Saeculum II awakening is unlikely to be quite as transformative as a Saeculum I awakening in-a-nontraditional-context. Perhaps a comparable degree of transformation would take more than one Saeculum II awakening.

Originally Posted by Tim Walker

Thanks

The power of the primacy phase was demonstrated by Renaissance/Reformation, when Saeculum I was released from the restraints of a traditionalist society. Indeed, Saeculum I may have helped the transition from Medieval to Modern.

An implication is that a Saeculum II awakening is unlikely to be quite as transformative as a Saeculum I awakening in-a-nontraditional-context. Perhaps a comparable degree of transformation would take more than one Saeculum II awakening.

You could be right. But so far we only have two 2T's from Saec II as a sample set. We'll need more. Too bad we won't be around. :wink: