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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (39471)	9/2/2008 6:00:14 PM
From: TobagoJack	Read Replies (1) \| Respond to of 217815

a big hair gun-toting hypocrite wastrel who cannot even lead / rule daughter, in other words :0) in any case, this just in in-tray PLAYER #1: I did some work over a year ago based on a study of the Asian crisis ("Causes of the 1997 Asian Financial Crisis: What can an early warning system model tell us?"), and developed a general financial crisis set of indicators for the US - chart attached. Interesting how it shows the level of crisis is lower than during many other periods. Components of the algorithm and more data, including a link to the source study, at nowandfutures.com - for what its worth. PLAYER #2: i'm sure you meant the 'level of crisis probability is/was lower than during other periods' - since the crisis is already here (and clearly it's an exceedingly bad one). i've quickly glanced at your list of criteria, and i believe you may consider adding a few - such as e.g. level of consumer debt-to-income ratio, ratio of additional debt per unit of GDP growth, ratio of total credit market debt to GDP, likely position in the Kondratiev cycle (as detemined by the bond yield long term trend and stocks/bonds correlation) to name a few possibilities. the major difference between the US situation and that of the Asian 'tigers' during the '97 - '98 crisis is that the US is the provider of the world's reserve currency, which creates a fairly unique situation (it has e.g. allowed both internal and external debt to grow much more than would otherwise have been likely). the focus of the current crisis is private sector debt , and more specifically, consumer debt, and the attendant effect on the banking system. this is roughly comparable to Japan's situation post 1980's boom, and i note that Japan probably looked even less crisis prone at the time its crisis started, since it had a large trade surplus and a high savings rate. PLAYER #1: Sort of - I view it as both the actual history for comparisons and as a view of the current probabilities too. Mostly its just intended to show another way to look at the whole financial crisis area. I did think about adding other criteria and your list has some very good ones, but the main reason I didn't is that it would substantially weaken the connection to the original study and therefore its overall validity. I'm not an economist too, just some guy with an interest in the area and taking my best shot. I do agree that the reserve currency status of the dollar does color it a bit, but it also enhances it too in the sense that other non US factors show up more easily on it too. The Mexican crisis, Asian crisis and even the LTCM event among others show up clearly. The oddest thing to me about it is how the severity has so far been lower than most other crises over the decades, and that doesn't exactly make me sleep any better.