Is there a pessimism bubble?
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Now, approximately 70% think obama will be re-elected in 2012...so most of that 55% must think the depression will be over by then eh?
There are plenty of reasons the previous bubble popped. We are in a bit of a mess. Pessimism bubble? Of course. The press really took it off the cliff for one and only one reason. Their wish came true, and the date of the veil lifting is nigh.
Here's how stupid people are: A good portion of the population think the unemployment rate is 40% or higher.
I'm not saying every day should be rose water, milk and honey, but cripes that speech by.....well if we don't spend X.XXX.XXX.XXX.XXX.XX dollars by Feb 17, by GOD we are going down.....what a bunch of garbage.
Here's how stupid people are: A good portion of the population think the unemployment rate is 40% or higher.
I'm not saying every day should be rose water, milk and honey, but cripes that speech by.....well if we don't spend X.XXX.XXX.XXX.XXX.XX dollars by Feb 17, by GOD we are going down.....what a bunch of garbage.
MolaKule
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Quote:
Is there a pessimism bubble?
Yes, with the pessimism bought on by the LW press to foster their own self-prophecies.
Is there a pessimism bubble?
Yes, with the pessimism bought on by the LW press to foster their own self-prophecies.
Big O has a lot of New Keynesians on his staff and I'm sure that's where he's getting his que. Krugman, Romer and Summers are all fiscal stimulus advocates. The thing that really sucks about macro-economics is that there is a lot of ideology and not enough data and history. And the thing I don't get about macro-economists is they always talk like there is a free lunch from either inflating or spending big bucks. It's a perplexing field. The monetarists and supply siders conducted their social experiment from 80s-2008 and now the new Keynsians will get their shot. I don't expect good outcomes either way because both sides are more interesting in pushing their agenda than being honest about the tradeoffs.
Gentlemen, why such worry? Watch the news, the economy and all other woes will be on the upswing in a matter of a few weeks.
Originally Posted By: VeeDubb
Intrade prediction market is predicting a depression in 09 with probability of 55%!
Interesting. But how will we know if they are correct?
A few months there was a lot of grumbling on TV about being in a recession, but they just wouldn't declare it. The reason the word "recession" is meaningful, is that it has a specific technical definition (two consequtive quarters of GDP reduction). Its not just some abstract label people throw around as they see fit. But this means it is something that can only be officially declared in hind sight.
Depression, on the other hand, is not so neatly defined.
Quote:
There is no widely agreed definition for a depression, even though some have been proposed...
A proposed definition for depression is a sustained recessionary period in which the population is forced to dispose of tangible assets to fund every day living, as was seen in the US and in Germany in the 1930s.
Without a technical definition, they may declare their prediction accurate themselves.
As the title question, yes I think so.
Three years ago we reduced (but didn't stop) our contributions to retirement accounts. Instead we saved the money to put more down on a house when we moved. At the time I told my wife the market was at the upper end of the long term PE ranges, so I'd rather save it for the house.
We moved a year ago, and intended to continue directing that $ to the mortgage for a couple years.
Now, that the PE is at the low end of the long term ranges, we intend to redirect that cash to retirement investments.
BTW, I don't engage in short term market timings - I'm just adjusting to substantial differences to the long term average price of the market.
Intrade prediction market is predicting a depression in 09 with probability of 55%!
Interesting. But how will we know if they are correct?
A few months there was a lot of grumbling on TV about being in a recession, but they just wouldn't declare it. The reason the word "recession" is meaningful, is that it has a specific technical definition (two consequtive quarters of GDP reduction). Its not just some abstract label people throw around as they see fit. But this means it is something that can only be officially declared in hind sight.
Depression, on the other hand, is not so neatly defined.
Quote:
There is no widely agreed definition for a depression, even though some have been proposed...
A proposed definition for depression is a sustained recessionary period in which the population is forced to dispose of tangible assets to fund every day living, as was seen in the US and in Germany in the 1930s.
Without a technical definition, they may declare their prediction accurate themselves.
As the title question, yes I think so.
Three years ago we reduced (but didn't stop) our contributions to retirement accounts. Instead we saved the money to put more down on a house when we moved. At the time I told my wife the market was at the upper end of the long term PE ranges, so I'd rather save it for the house.
We moved a year ago, and intended to continue directing that $ to the mortgage for a couple years.
Now, that the PE is at the low end of the long term ranges, we intend to redirect that cash to retirement investments.
BTW, I don't engage in short term market timings - I'm just adjusting to substantial differences to the long term average price of the market.
Intrade's definition of a depression: "...is defined as a cumulative decline in GDP of more than 10.0% over four consecutive quarters. This is calculated by adding together the published (annualized) GDP figures (as detailed below). If these annualised figures add up to more than -10.0% over four consecutive quarters then the contract will expire at 100."
This is why I find the 55% so shocking. If we get 10% decline in the next year, we're looking at armeggedon. This is why I'm seriously considering shorting this market. If it comes true, then h$ll, my intrade bet is the least of my worries because I should have been long on ammo, food, and guns
This is why I find the 55% so shocking. If we get 10% decline in the next year, we're looking at armeggedon. This is why I'm seriously considering shorting this market. If it comes true, then h$ll, my intrade bet is the least of my worries because I should have been long on ammo, food, and guns
Originally Posted By: VeeDubb
I should have been long on ammo, food, and guns
Alcohol and tobacco sales are a growth industry at the moment.
I should have been long on ammo, food, and guns
Alcohol and tobacco sales are a growth industry at the moment.
If we would all turn the "Fear Mongering News" off and go about our daily lives I'm sure that number would be a lot lower... The market reactions are driven by fear and misinformation... Positive Thinking usually leads to positive results!
(and no I'm not talking about the movie: The Secret)
You can probably bet that 80% of the 55% don't know the definition of a depression and they number equally high amongst those who think the unemployment rate is 40%.
Can't we just fix this depression with high doses of Lithium, Zoloft, Paxil, Effexcor(sp?) in the water supply?
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Originally Posted By: salesrep
I feel that the press has been on the optimistic side.
Agreed. I am actually spending the 3rd week of January and probably most or all of the 4th week of January in the boonies.
I feel that the press has been on the optimistic side.
Agreed. I am actually spending the 3rd week of January and probably most or all of the 4th week of January in the boonies.
There are some cleaning up at the expense of others.Scares me when I will be forced to pay for those getting the big bucks.
Originally Posted By: Steve S
There are some cleaning up at the expense of others.Scares me when I will be forced to pay for those getting the big bucks.
I certainly didn't vote for welfare for bankers.
There are some cleaning up at the expense of others.Scares me when I will be forced to pay for those getting the big bucks.
Originally Posted By: moribundman
Originally Posted By: salesrep
I feel that the press has been on the optimistic side.
Agreed. I am actually spending the 3rd week of January and probably most or all of the 4th week of January in the boonies.
Catching up on survival skills?
Originally Posted By: salesrep
I feel that the press has been on the optimistic side.
Agreed. I am actually spending the 3rd week of January and probably most or all of the 4th week of January in the boonies.
Catching up on survival skills?
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Working on the cave.
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