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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (42779)	1/8/1999 8:30:00 PM
From: Peter Singleton	Respond to of 132070

Mike, I picked "The Great Reckoning" up, but it didn't really grab me, so it got returned to the Library unread. I do like a lot of what Davidson writes when I see it posted here and there. I'm not particularly wedded to a "it's going to be worse than The Great Depression" scenario, or that there's even going to be a depression, small, medium or large. I just have the following working hypotheses: - US equities are in an historic asset bubble - this asset bubble is arguably of a greater degree than any other in US economic history, including 1929 - there are some real warning flags on the economic horizon, and some in plain view, independent of the asset bubble - asset bubbles often come down much faster than they rise - asset bubbles when they come down can have backend economic consequences, especially when they occur at long term secular market tops and / or times of political uncertainty and / or downturns in the business cycle (thanks to the link you posted yesterday), and they can also be particularly severe when they occur in the early stages of a deflationary cycle So, if you agree with a then b then c then d, yes, there is some risk that we're at the cusp of a very big, and very bad, economic event. But I wouldn't have any idea of what probability to assign to it. About all I can say is I think there's at least a 10% chance we're in the early stages of a global deflationary depression (whether small, medium or large), and I also think an intellectually coherent case can be made that if we go into a depression, it could be [not "will be"] more severe than the 1930s. But it's hard to puzzle this out any better than that. The data from the economy firing on all (actually most, now) cylinders is still pouring in, plus most people are feeling too good about the economy, the stock market, and their prospects. It's infectious ... Peter