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Old 10-02-2009, 07:53 PM
 
Location: Great State of Texas
86,052 posts, read 84,321,515 times
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Excellent article for those that do think there are similarities.
If the bottom falls out..it could be the mother of all buying opportunities for those with cash on hand to spend.

Worth a read regardless. In the market, there's always money to be made regardless which way the DOW goes. Keep that in mind.

"The Dow; Ominous Parallels to the 1929-1930 Era" by Sol Palha, FSU Editorial 10/02/2009
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Old 10-02-2009, 08:32 PM
 
Location: Conejo Valley, CA
12,460 posts, read 20,035,115 times
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Quote:
Originally Posted by HappyTexan View Post
If the bottom falls out..it could be the mother of all buying opportunities for those with cash on hand to spend.
You mean like in March, when all you gloomers were talking about the world ending? When you guys start talking about buying, then I'll know its time to sell.

The comparison to the great depression are getting sillier and sillier, at least a year ago there was some sense to it. The most telling comparison is with Japan, but Americans tend to have no clue about any place outside of their backyard so such comparisons in the media become ineffective.
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Old 10-03-2009, 09:57 AM
 
Location: Live in NY, work in CT
11,264 posts, read 18,806,570 times
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Quote:
Originally Posted by user_id View Post
You mean like in March, when all you gloomers were talking about the world ending? When you guys start talking about buying, then I'll know its time to sell.

The comparison to the great depression are getting sillier and sillier, at least a year ago there was some sense to it. The most telling comparison is with Japan, but Americans tend to have no clue about any place outside of their backyard so such comparisons in the media become ineffective.
A year ago I really thought we were heading to Great Depression II. Now I think what it is is a mix of the 1870s "great recession" and the little known short but quite deep 1958 recession. Rather than bore you with details all you folks who think it's 1930 right now can go look those 2 up, I have a forum piece on page 3 of this thread about the latter.
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Old 10-03-2009, 10:30 AM
 
Location: Sacramento
14,044 posts, read 27,165,238 times
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Doubt there is a stock price bubble right this moment.

S&P 500 as of today is 1,025.21, while a decade ago (Oct 3, 1999) it was 1,304.60. I kind of agree with 7 Wishes, it kind of looks more like the 1958 recession to me, except inverted to hit the most prosperous countries instead of the less developed economies.

But, to me everything has a "bottom line".

My "bottom line" about this entire discussion is that worldwide economic growth is accelerating, and an investment strategy that includes international stock markets should do quite well over the next decade or so. I disagree with the folks who think gold is where to invest, or that the economy will continue to tank.

No doubt some unforseen disruptions, be they terror or international conflicts, will cause brief but severe downturns. But overall, I think those who have the ability to ride out those disruptions will do just fine.
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Old 10-03-2009, 11:01 AM
 
Location: Denver metro
1,225 posts, read 3,223,297 times
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A year ago, like many Americans, I was also concerned that we were potentially slipping into another Great Depression. My fears have since subsided.

While I do not beleive that the economy is great right now, it has at least stabilized and appears to be recovering. I beleive that the economy hit bottom back in March/April, and that we have been in a slow but steady recovery since. I'm certainly not claiming that all of the news is great (unemployment is still continuing to rise, but unemployment rates are a lagging indicator and traditionally continue to rise for a brief time after recessions are over).

I agree with user_id... all of the doom and gloom scenarios about another depression are getting sillier by the day. I'm starting to get the feeling that this recession was over-hyped from the beginning. Welcome to the age of sensationalized media.
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Old 10-03-2009, 11:42 AM
 
Location: Great State of Texas
86,052 posts, read 84,321,515 times
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There's nothing saying we won't have another dip. Some financial folks think this may be a double dip recession. The market itself is priced forward and have taken into account a recovery happening quicker than it actually has.

I don't dismiss this possibility. There may very well be a correction. When the green shoots were spotted the market took off. But those green shoots didn't spread so quick.

You don't have to think "depression crash". You can look at the similarities and put into perspective.
There are many people hoping for a "V" recovery. I think more like "L" shaped myself.

The market timing is a guess at any rate for buying and selling. It's just the more you know can help you make a more educated guess.
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Old 10-03-2009, 11:52 AM
 
5,760 posts, read 11,521,015 times
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Have mostly watched the media soft-sell and watched the media come rather late-to-awareness.

There is more a case of corporatism and retardation in the general media than doom, gloom, or any of the other phrases used to wish away the real.

If this is a 1930's model, it is running just about on course. Go back and look at the numbers for a 1930's model. While the first stock market crash in late 1929 came close to the late 2008 drop, that was hardly the end. Things floated along and back up, and came down hard again in late 1930, 31 and 32 before settling around bottom in 1933 to 1937.

If so, the next the shake-down or up will be between now and Christmas. Here are the two components I think may be worth watching --

1. Housing. With the $8000 near-instant-cash rebate expiring effective December 1, 2009 -- Will housing continue to flutter along near dead, as now, or drop hard to reflect the sudden lack of the rebate? If it drops to reflect the lack of the rebate, it will likely be by more than the $8000 rebate (per house) as instant cash has more "present value" to a would be buyer than an $8000 price reduction. If it goes down, I would expect a $10K to $20K drop per sold house to be within the reasonable range of cause and effect. Throw in the "shadow foreclosures" (housing being held by otherwise bankrupt banks, and delayed foreclosures because the banks cannot acknowledge the full loses, yet) -- and we could see a whole other level of basement in how low things will go in the housing mess.

2. Retail Sales. Major component of the overall economy is still consumerism. After (or even before) Halloween and the retailers start licking their chops for Christmas Retail Sales. Like that is going to happen this year. With real unemployment well over 10% and benefits running out this could likely be the year the Grinch wins on Christmas.

So from where is the mythic "recovery" going to come from? In real numbers and hard info, if we please?

I am thinking at this point the Happy Days Are Here Again and Blue Sky folks are as wacky as the Full Metal Doomers.
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Old 10-03-2009, 12:12 PM
 
14,249 posts, read 17,885,317 times
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Quote:
Originally Posted by Philip T View Post
I am thinking at this point the Happy Days Are Here Again and Blue Sky folks are as wacky as the Full Metal Doomers.
No way "Happy Days Are Here Again". But I do think the recession has bottomed out and that things will start to get better .... slowly. I see no evidence of a double dip.

In my own business, we see this next 9 months as being difficult but we are seeing evidence that corporations are beginning to spend again. So, just a question of riding it out.
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Old 10-03-2009, 12:30 PM
 
Location: Live in NY, work in CT
11,264 posts, read 18,806,570 times
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Quote:
Originally Posted by downtownnola View Post
I'm certainly not claiming that all of the news is great (unemployment is still continuing to rise, but unemployment rates are a lagging indicator and traditionally continue to rise for a brief time after recessions are over).

I agree with user_id... all of the doom and gloom scenarios about another depression are getting sillier by the day. I'm starting to get the feeling that this recession was over-hyped from the beginning. Welcome to the age of sensationalized media.
When I found that -10.3% annualized GDP drop for Q1 1958, the chart only went back to 1947. So I started looking for 1930s numbers. Did you know that from 1934 to 1936 we actually had ANNUAL double-digit GDP GROWTH? Yet we still had double-digit unemployment (of course, coming from 25%, rates around 15% are still improvement). But we were starting to run too much of a deficit and FDR pulled the stimulus plug and in 1937 it all reversed (with unemployment going up to near 20%).

So A) unemployment is a lagging indicator, and B) stimulus can help if given a chance (though where to place it is the issue I think).
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Old 10-03-2009, 12:51 PM
 
Location: Orange County, CA
4,893 posts, read 3,345,843 times
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The similarities with the Great Depression area is striking for sure...

Even the outsourcing and H1b labor issues of today have their counterparts during that era (i.e. Chinese railroad workers and European immigrants into the Industrial Midwest and the European colonialism of the Third World).

It's like we have learned anything from the past...
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