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wonderpup

Is It Really Different This Time?

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There seem to be two schools of thought on the present fun and games- one being that this is a more or less normal behavioral varaition in the financial system, with it's own, quite cuddly, name of a 'bear market'- the exepectaion being that over time it will spontanously evolve back into a bull market as the system goes about it's business.

The other view seems to be that we have reached some kind of tipping point- an inherent limit of the financial universe wherein the thing is irretrivably broken and will need a radical overhaul to get the show back on the road.

Just wondering which side of the fence you were on?

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There seem to be two schools of thought on the present fun and games- one being that this is a more or less normal behavioral varaition in the financial system, with it's own, quite cuddly, name of a 'bear market'- the exepectaion being that over time it will spontanously evolve back into a bull market as the system goes about it's business.

The other view seems to be that we have reached some kind of tipping point- an inherent limit of the financial universe wherein the thing is irretrivably broken and will need a radical overhaul to get the show back on the road.

Just wondering which side of the fence you were on?

In Bull markets the uber-bulls cry "New paradigm" or "it's different this time".

In Bear markets the uber-bears cry "financial armegeddon" or "it's different this time".

Neither have ever been proved right.

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In Bull markets the uber-bulls cry "New paradigm" or "it's different this time".

In Bear markets the uber-bears cry "financial armegeddon" or "it's different this time".

Neither have ever been proved right.

the bears aren't saying that it's different this time, they are saying that the system was SO stressed that the bottoms are likely to be a lot lower than the norm.

in housing everything tends to balance out in the end, it's surprisingly symmetrical.

we have just had a housing boom who's scope has never been seen before, the bust is likely to be just as severe.

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In Bull markets the uber-bulls cry "New paradigm" or "it's different this time".

In Bear markets the uber-bears cry "financial armegeddon" or "it's different this time".

Neither have ever been proved right.

Was Noah an uber-bear? :o

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we have just had a housing boom who's scope has never been seen before, the bust is likely to be just as severe.

A lot of people seem to feel that the house price crash is a symptom rather than a cause of the problem- an accident wating to happen kind of thing.

One suspicion is that those who are closely involved in the markets and the mythology of the markets may be guilty of seeing events through this filter, and have too much faith in the ability of the markets to adapt and contain the problem.

The other side of this coin would be people like myself, who have a limited understanding of the markets and may be overeacting to events and statistics that are not as dangerous as they appear at face value.

I just can't decide which view is correct. :(

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A lot of people seem to feel that the house price crash is a symptom rather than a cause of the problem- an accident wating to happen kind of thing.

One suspicion is that those who are closely involved in the markets and the mythology of the markets may be guilty of seeing events through this filter, and have too much faith in the ability of the markets to adapt and contain the problem.

The other side of this coin would be people like myself, who have a limited understanding of the markets and may be overeacting to events and statistics that are not as dangerous as they appear at face value.

I just can't decide which view is correct. :(

I think you are making a seriously good point here.

However, I can't help but feel that even without what we perceive (correctly or not) as a bubble in house and financial instrument prices, we would be in for a massive disruption due to the end of cheap and abundant energy.

Edited by 1929crash

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Just wondering which side of the fence you were on?

See sig for details, remembering to turn on the Sarcasm Filter for the first half.

Personally, I suspect it'll end up being rather like a slightly nastier version of the 90s recession, although nothing particularly "special". However, what'll make it feel extra-nasty is the extended period of economic calm we've had in the run-up to it. The way I see it, anyone who was in the labour market before about 1995 will have been around for at least one turning point or nasty bit - the 70s were a total rollercoaster, the 80s were doom then boom but with major regional variations, and the early 90s were icky. However, those who've entered the labour market since then have pretty much seen constant growth. Jobs have been easy to get, and not something worth really worrying about. That will change, and having to adapt to a situation where your current job suddenly becomes doubly important, simply because replacing it will be that much harder, is going to be rather tricky for some I suspect.

Okay, that lot seems rather unscientific, but the idea of post-95 labour force entrants just not being mentally adjusted to existing in tough times is based on pots and pots of anedotals from friends in that precise group. Thanks to taking a couple of years off education*, I got to experience the 90s recession, albeit in the watered-down form provided by working but living at home and having no real fixed costs. The lot I went through Uni with (mostly) didn't, and it shows up very much in their attitudes to money and work.

I'm not sure of the poster (I *think* it was Bosh, appologies if not), but someone on here had 'If all the times were good times, they'd just be called the times' as a sig. A more accurate statement regarding the 20 and early 30-somethings around at the moment I cannot imagine. That coming realisation that what they thought was both normal and unended was just one of the many variants of economic light and shade is going to hit amazingly hard, and I don't think it's impact on spending patterns is going to be easy to predict.

(That said, I'm gonna try....)

I've plumped for the next few years being slightly worse than the 90s for two reasons. Firstly, the boom's be entirely national. Nowhere's escaped it, and so nowhere will escape the bust. For those bits that got really badly clobbered in the 90s, it might not seem much worse, but those bits that never really had the 80s boom, this time round's going to feel horrendous. Secondly, I think the drop-off in consumer spending will take longer to occur (more punters who are yet to adjust due to no prior experience, credit still easier to obtain than it was last time round), but when it does, it'll go off an absolute cliff. When I hear tales from friends about the company they work for being in poorer shape than last year, sales being down, and then there being no connection made to the prospect of job losses, it just makes me think that instead of an orderly slowdown, we're going to see an irrationally long period of false sunshine, followed by a everything hitting a brick was very fast thanks to a total over-reaction the other way.

All I can say is I'm really, really glad I don't have Starbucks or Nandos franchise right now.

* I wasn't poncing about Mexico, I was working in a shop. I simply despise formal education. One size fits dull, conformist, oxygen thieves, regardless of accademic ability.

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Guest Steve Cook
There seem to be two schools of thought on the present fun and games- one being that this is a more or less normal behavioral varaition in the financial system, with it's own, quite cuddly, name of a 'bear market'- the exepectaion being that over time it will spontanously evolve back into a bull market as the system goes about it's business.

The other view seems to be that we have reached some kind of tipping point- an inherent limit of the financial universe wherein the thing is irretrivably broken and will need a radical overhaul to get the show back on the road.

Just wondering which side of the fence you were on?

Tipping point.

Overhaul not possible

The end of a period of history

The end of the Hydrocarbon Age

Edited by Steve Cook

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Guest Steve Cook
A lot of people seem to feel that the house price crash is a symptom rather than a cause of the problem- an accident wating to happen kind of thing.

One suspicion is that those who are closely involved in the markets and the mythology of the markets may be guilty of seeing events through this filter, and have too much faith in the ability of the markets to adapt and contain the problem.

The other side of this coin would be people like myself, who have a limited understanding of the markets and may be overeacting to events and statistics that are not as dangerous as they appear at face value.

I just can't decide which view is correct. :(

It is different this time

Our economic system always ends up f*cking up periodically. This, in itself, is not particularly noteworthy from a historical perspective. We have lent too much money into existence. A lot of it is being detroyed in the form of debt default. We are currently playing the inflationary game to try and make all of the nasty debts go aways. If we succeed we get hyperinflation. If we lose, we get a re-run of the 1930s.

The thing that is different is that we got out of the 30s and the 70s by growing our economies out of the sh*t (ok...WWII helped a bit with the 30s... :blink:). We did this on the back of cheap energy. This time around we don't get to do that. From now on in, the real world economy, irrespective of whatever nominal games our CBs might play, is going to contract.

It is not going to stop contracting.

We are at the very beginning of a 50 year long emergency.

EDIT:

actually, 50 years may be being alittle optimistic...make that 30

Edited by Steve Cook

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Tipping point.

Overhaul not possible

The end of a period of history

The end of the Hydrocarbon Age

.....will occur when we start to run low on oil in maybe 40 or 50 years....

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Guest Steve Cook
.....will occur when we start to run low on oil in maybe 40 or 50 years....

you may be right injin. The timing of the tipping point is entirely debatable. I would say that we are at the very beginning of a decades long emeregency. If we are lucky, we don't get some apocolyptic event like a World war. Each day will simply be a little bit tougher than the last. Until, eventually, 50 years hence, we find ourselves in a different world.

Edited by Steve Cook

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It is different this time

Our economic system always ends up f*cking up periodically. This, in itself, is not particularly noteworthy from a historical perspective. We have lent too much money into existence. A lot of it is being detroyed in the form of debt default. We are currently playing the inflationary game to try and make all of the nasty debts go aways. If we succeed we get hyperinflation. If we lose, we get a re-run of the 1930s.

The thing that is different is that we got out of the 30s and the 70s by growing our economies out of the sh*t. We did this on the back of cheap energy. This time around we don't get to do that. From now on in, the real world economy, irrespective of whatever nominal games our CBs might play, is going to contract.

It is not going to stop contracting.

We are at the very beginning of a 50 year long emergency.

It's not the economies that were saved, it was the banking systems.

The bankers and elite want a "cake and eat it" system where we have a free market but they have no need to be subject to it. They've used various lunatic frauds to achieve this and whenever one unraveled they upped the fraud into something even more lunatic. Paper is gold! Paper is valuabel all on it;s own! PC numbers are paper! Woohoo! The onyl way they get out of this one is if they can mak emoney telepathic or something.

Now, they have nowhere left to go and so the collapse that should have occured in 1929 that wiped out all the big businesses and big banks is going to finally arrive.

Thank ******. :)

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you may be right injin. The timing of the tipping point is entirely debatable. I would say that we are at the very beginning of a decades long emeregency. If we are lucky, we don't get some apocolyptic event like a World war. Each day will simply be a little bit tougher than the last. Until, eventually, 50 years hence, we find ourselves in a different world.

I think that after a banking collapse, everything is easier for everyone. Right now people are running up an ever steepening inflationary hill and thinking that it's normal.

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It's not the economies that were saved, it was the banking systems.

The bankers and elite want a "cake and eat it" system where we have a free market but they have no need to be subject to it. They've used various lunatic frauds to achieve this and whenever one unraveled they upped the fraud into something even more lunatic. Paper is gold! Paper is valuabel all on it;s own! PC numbers are paper! Woohoo! The onyl way they get out of this one is if they can mak emoney telepathic or something.

Now, they have nowhere left to go and so the collapse that should have occured in 1929 that wiped out all the big businesses and big banks is going to finally arrive.

Thank ******. :)

Absoloutely bang on the nail injin.

"telepathic money"....I love it.... :lol:

You made me smile.....

That's your good deed done for the day injin.... ;)

In terms of the collapse of the bankers.....I kinda hope you're wrong...and I kinda hope you're right

Edited by Steve Cook

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Absoloutely bang on the nail injin.

"telepathic money"....I love it.... :lol:

You made me smile.....

That's your good deed done for the day injin.... ;)

:lol:

I seem to have started typing with boxing gloves on again though!

Shh about the telepathic money, the banksters will be wanting it asap.

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I think that after a banking collapse, everything is easier for everyone. Right now people are running up an ever steepening inflationary hill and thinking that it's normal.

yep

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Tipping point.

Overhaul not possible

The end of a period of history

The end of the Hydrocarbon Age

Yes.

But also the dawn of a new period.

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Yes.

But also the dawn of a new period.

yep.

It's not the new era I am worried about. It's the getting there that scares the sh*t out of me

Edited by Steve Cook

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Shh about the telepathic money, the banksters will be wanting it asap.

Thank you Sir, that will do nicely.

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There seem to be two schools of thought on the present fun and games- one being that this is a more or less normal behavioral varaition in the financial system, with it's own, quite cuddly, name of a 'bear market'- the exepectaion being that over time it will spontanously evolve back into a bull market as the system goes about it's business.

The other view seems to be that we have reached some kind of tipping point- an inherent limit of the financial universe wherein the thing is irretrivably broken and will need a radical overhaul to get the show back on the road.

Just wondering which side of the fence you were on?

In 1993 consumer debt accounted for approx 64% of UK GDP .... in 2007 consumer debt was approx 102% of UK GDP.

As a measure of GDP this is less than the US and our banks are yet to experience the same level of defaults.

Global and domestic inflation by any measure is rampant .... disposable income and savings rates are at record lows.

The Boe has lost control of monetary policy .... the cost of borrowing will be set by the banks as they try to re-capitalize.

The public purse is empty and its credit facility is maxed out.

Ect, ect, ect

Of these points the one that astounds me most is the first one, just the amount of consumer debt involved ... and I'm an optomist !!!

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yep.

It's not the new era I am worried about. It's the getting there that scares the sh*t out of me

Why?

This is a genuine question - I can think of some concerns, but not sure which one(s) scare you.

Also, as I approach 40, I'm finding that though the world seems to be becoming more hostile, I am repeatedly learning that it is the situations and encounters that I fear that I gain the most from engaging with*.

*exclusions involve those wearing fatigues, fur and back patches.

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That coming realisation that what they thought was both normal and unended was just one of the many variants of economic light and shade is going to hit amazingly hard,

I think this is maybe part of what's gone wrong- how many of the people recently making decisions regarding risk have only known a world where credit was cheap and apparently limitless- a financial equivelent of the horn of plenty.

As an older person I am quite staggered by the casual way some people have loaded up with debt- but can you blame them?- the whole culture was ramming it down their throats at every opportunity.

I think that when people wake up to just how badly they've been screwed there will be a lot of anger about. Hopefully it will be directed at the banks and their political stooges and not the usual suspects like single mums on benefit ect.

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Why?

This is a genuine question - I can think of some concerns, but not sure which one(s) scare you.

Also, as I approach 40, I'm finding that though the world seems to be becoming more hostile, I am repeatedly learning that it is the situations and encounters that I fear that I gain the most from engaging with*.

*exclusions involve those wearing fatigues, fur and back patches.

We have massively overshot our planet's carrying capacity on the back of a cheap and seemingly endless supply of energy.

As the energy supply diminishes, so will the human population.

There will be huge die off. It will not stop until our population has been driven back to 1/2 a billion or so. Once there, there are are a myriad of energy supply solutions. All of them renewable.

Between now and then, its going to get very ugly. No one is going to go into the night willingly.

human_population_growth.GIF

post-11259-1216252359_thumb.png

Edited by Steve Cook

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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