Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (9929)	9/20/2001 12:36:45 PM
From: Ilaine	Read Replies (2) \| Respond to of 74559

Hi Don - one of the arguments I've read recently is that prior to the Industrial Revolution, there were no "business cycles." There were occasional "booms and busts", e.g., tulip mania and the South Sea Bubble. The concept that aggregate output could create an imbalance between aggregate supply and aggregate demand which would lead inevitably to a self-correction is recent. Following up on your argument, is it possible that what we perceive as booms and busts are coincidences? Using a traffic jam as an example - each person is driving to work for his/her own reason. My reason causes me to be on the road at the same time you are, but my reason didn't cause you to be on the road. You are on the road for your own reason. Too many people trying to use the road at the same time can mean that we all have to slow down because there isn't enough road for all the cars at once, but the reason for the jam is a large number of coincidental uses of the road. No causal connection. Further - you know how a jam caused by a wreck will continue even after the wreck is cleared away? It's very mysterious - everyone slows down at once and then speeds up again, and one asks "what was that about?" but if you don't see broken glass or a smashed car on the side of the road there's no explanation. I don't know what that's called. Fractals? Is it possible that what we perceive as busts are caused by a similar phenomenon?

To: Don Lloyd who wrote (9929)	9/20/2001 7:31:12 PM
From: LLCF	Read Replies (1) \| Respond to of 74559

And hence the need to use common sense in forcasting, it's different each time in so many ways. Each DAY is different than the last. Just a wild for instance, economists compare the U.S. economy to European ones... economists argue our system better due structural labor and legal differnces and many other issues... what about the availability of practically free land available in the U.S. since the beginning?? How can you even begin to measure the system when one has these resources available. So I propose starting with the big, common sense picture: what will reverse the current downtrend?? What will stop the implosion, or afterwards begin the recovery? If there is no stopping it, how far will it go?? What is the possible worst scenario, can we really see bread lines??? How does that [not] happen? IMO, we need to look at unemployment, what sectors, if any, could see massive unemployment, which are safe? For a start I'd say that real estate is NOT safe, we're going to have a bust out here the size of Manhatten... banks tied to it are going to get creamed IMO... I'd go so far as to say most lending went WAY overboard, banks in general have a long way down... even WITHOUT investment income drying up and all that obvious bad stuff. More later, son wants to swim. dAK