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

To: Ilaine who wrote (27881)	1/26/2003 1:18:16 PM
From: Mike M2	Read Replies (1) \| Respond to of 74559

CB, what do you call the dot.con, telecon, fibercon, semiconductor sectors - I see them as micro boom that went bust . I doubt Milton Friedman would argue that unlimited credit would have saved these sectors. Japan is a modern day example of the boom/ bust or perhaps you still hold the view that all is well in the land of the setting sun. BTW I bought Bernanke's book but haven't read it yet. mike

To: Ilaine who wrote (27881)	1/26/2003 3:07:14 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

CB, I think booms do cause busts. That's because booms are not just economies performing very well, but include a large wealth effect, misallocation of resources [bad investments which don't deliver expected profits], bad buying decisions such as buying cars which are wayyyyy to expensive for one's actual value. Quitting work because on paper one is wealthy too. So production of expensive products goes up and effort [production] given on actually useful things goes down. When the realization that one is not wealthy hits [because profits are not forthcoming and debts are mounting], one stops buying the luxury stuff, but can't afford the normal stuff [people batten down the hatches] and has trouble getting a job because so much has gone bankrupt. Markets take time to clear and courts take time to process bankrupt assets so the bust extends for quite some time. I've seen several booms and busts in my lifetime. Same old pattern. I've never seen a depression!! Don't want to. Mqurice

To: Ilaine who wrote (27881)	1/26/2003 5:00:37 PM
From: LLCF	Read Replies (2) \| Respond to of 74559

<What I dispute, based on what I've read, is the simplistic assertion that "the bigger the boom, the bigger the bust,> You argue this is not true ceteris paribus??? dAK

To: Ilaine who wrote (27881)	1/26/2003 5:05:17 PM
From: TobagoJack	Read Replies (2) \| Respond to of 74559

Hello CB, simple observation shows that busts follow booms follow busts, and easy logic leads to belief that bigger smaller busts rarely follow the big booms. So, for the purpose of seeking financial survival and wealth redemption, as opposed to intellectual curiosity and historic revisionism, simple observation and easy logic will do for me, as in 'act first, ponder later, on the beach, next to hut, with drink in hand'. Chugs, Jay