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.

Pastimes : The Big Picture - Economics and Investing -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (555)	7/21/1998 7:39:00 AM
From: Arik T.G.	Read Replies (1) \| Respond to of 686

tippet, >>Suppose, for the sake of argument, that within the next year there is a very severe decline in the price of equities -- i.e. ~ 29 magnitude....What kind of fundamental shifts can we expect in the economy in the years following? Wow. Big ones. There will be a big mess. I believe that a large part of the decline in stock prices will occur before 010100. y2k uncertainty will enhance the stock market panic. I believe that we will have a big panic (run on the banks?) early '99. People will look for safe investments outside the system (gold coins?) The sharp decline in consumer confidence will cause major consumption changes. Big Growth companies will show decline in earnings, other might show losses. A depression feeds on itself, same as the bubble does. The overcapacity in production will be exposed, and in the weeding process many companies will be closed. A big rise in unemployment in '00 will undermine consumer confidence even more. If y2k problem will cripple the economy as much as some believe (months of brownouts, disorders in banking and government agencies), then the diminished demand will meet diminished supply. For a good description of the full impact of y2k, should this event be of Biblical proportions, read "Lucifer's Hammer" by Niven and Pournell. The book describes California after a big comet hits the earth (sounds familiar?). Arms and ammunition, and a diesel 4x4 with lots of gas, are the most needed items when society breaks, if you judge by that book. I bet that's the best doom and gloom you've read in a while. Hey, I'm just looking at the worst case scenario. ATG