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Realistbear

" Prepare For A Downturn--remember 1989?"

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http://uk.biz.yahoo.com/24052007/35/prepare-downturn.html

Thursday May 24, 04:55 PM
The Motley Fool
Prepare For A Downturn
Market Comment
[ May 24, 2007 ]
By Maynard Paton
Remember 1989?
It was a time when:
* the FTSE was awash with 'leveraged buy-out' activity;
* property prices were sky high and;
* there was a stock-market bubble in Japan.
Roll on 18 years and 2007 is a time when:
* the FTSE is awash with private-equity bid activity;
* property prices are sky high and;
* there is a stock-market bubble in China.
Sure, they say stock-market history never repeats itself. But rename 'leveraged buy-out' with 'private equity' and swap one rampant Far Eastern market for another and the similarities between 1989 and 2007 seem clear to me.
But why is this important? Well in 1990, the buy-outs unravelled, house prices slumped, Japanese shares collapsed -- and the FTSE All-Share fell 14%. Could 2008 witness a similar downturn? Maybe.

It will be different this time. Great Crash 2 is a category 5 storm compared with the category 2 of GC1.

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http://uk.biz.yahoo.com/24052007/35/prepare-downturn.html
Thursday May 24, 04:55 PM
The Motley Fool
Prepare For A Downturn
Market Comment
[ May 24, 2007 ]
By Maynard Paton
Remember 1989?
It was a time when:
* the FTSE was awash with 'leveraged buy-out' activity;
* property prices were sky high and;
* there was a stock-market bubble in Japan.
Roll on 18 years and 2007 is a time when:
* the FTSE is awash with private-equity bid activity;
* property prices are sky high and;
* there is a stock-market bubble in China.
Sure, they say stock-market history never repeats itself. But rename 'leveraged buy-out' with 'private equity' and swap one rampant Far Eastern market for another and the similarities between 1989 and 2007 seem clear to me.
But why is this important? Well in 1990, the buy-outs unravelled, house prices slumped, Japanese shares collapsed -- and the FTSE All-Share fell 14%. Could 2008 witness a similar downturn? Maybe.

It will be different this time. Great Crash 2 is a category 5 storm compared with the category 2 of GC1.

You always ignore my question about what else happened before the last great crash, will you do it again?

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You always ignore my question about what else happened before the last great crash, will you do it again?

Hi

I must have missed that question.

Can you spell it out for me?

Taaaa

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Miras.

Joint Miras to be precise.

It was just another factor but it was peculiar to the U.K. market

If you go back and read the history of speculative bubbles you will find people who attach enormous significance to an event that caused the pop.

The reality is that speculative bubbles burst because they are driven by delusional behaviour by crowds.

When the delusion end, the bubble ends.

The event that causes the bubble to pop is actually quite insignificant, what is important is that the bust causes enormous economic and social damage.

But at the top, the people who don't bother studying history will always say otherwise.

And so the people who remain ignorant repeat the same mistakes.

Edited by BandWagon

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If you go back and read the history of speculative bubbles you will find people who attach enormous significance to an event that caused the pop.

The reality is that speculative bubbles burst because they are driven by delusional behaviour by crowds.

When the delusion end, the bubble ends.

The event that causes the bubble to pop is actually quite insignificant, what is important is that the bust causes enormous economic and social damage.

But at the top, the people who don't bother studying history will always say otherwise.

And so the people who remain ignorant repeat the same mistakes.

Right on. The economic cycle turns and whatever is around at the time will do it. Sentiment is a huge factor and mix in some market stress with a little credit tightening and down she goes. With house prices grossly out of alignment with wages--perhaps the greatest disconnect in history--some interesting things can happen.

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speaking of speculative bubbles: the WSJ today "Why Market Optimists Say This Bull Has Legs"

Vernon Smith, a Nobel laureate economist, is so bullish on stocks that he's put money in small drug companies -- investments he "wouldn't have touched in the late 1990s," he says. Louise Yamada, a longtime Wall Street market analyst, sees the Dow Jones Industrial Average climbing to 16000 as part of a bull market that she compares with the post-World War II boom. Fritz Meyer, who develops investment strategy for AIM Investments, a $149 billion money-management group in Houston, sees stock gains stretching as far as the eye can see.

A decadelong bull market is supposed to be a once-in-a-generation ..

Top indicator?

Edited by domo

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can't wait. Im gonna laugh at alot of people on here!!

aw poor gilbo got savaged by some bears so now hes going to try to bit back with some insane gibberish. get a life troll and fekk off

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aw poor gilbo got savaged by some bears so now hes going to try to bit back with some insane gibberish. get a life troll and fekk off

not my fault i can see a crash coming, does it worry you?

More rubbish. How about comparing today to a year ago. Everything is exactly the same. Lots of profit, no danger. Everything went up in price last year, like it will next year.

so your sayin there will never be a crash again, so this means inflation keeps going up and up and up.. er i dont think so my friend

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not my fault i can see a crash coming, does it worry you?

so your sayin there will never be a crash again, so this means inflation keeps going up and up and up.. er i dont think so my friend

Inflation is a tax, and taxes are the one sure thing besides death. Why would a government give up all this revenue? Why should you give up this opportunity for free money? Because you got sucked in by the dangerous cultist spambot Surrealist Bear.

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More rubbish. How about comparing today to a year ago. Everything is exactly the same. Lots of profit, no danger. Everything went up in price last year, like it will next year.

That's right. Since GB banished boom and bust, everything will go up forever and ever :ph34r:

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QUOTE(Nick T @ May 23 2007, 12:35 PM)

Isn't Property Guru, using the name RB on HPC... or was PG joking when he said that???

Nope I am serious I am Realist Bear over there.

The mods were so busy looking for new member VI/ EAs / Trolls and shouting Awooga they did not notice the elephant in the room (Realist Bear).

The more wind up Great Crash 2 posts I make the more the muppets lap it up. Surely they can see Realist Bears posts are just a comical leg pulling exercise.

It was just a bit of fun but now Realist Bear is part of the establishment.

PG

Edited by dom

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