[quote]beebuddy wrote:
orion wrote:
beebuddy wrote:
fearlesswarrior wrote:
Good luck with your Bretton WoodsIII
Yes, and good luck to you fighting zombies during the apocalypse.
Gosh, you don´t even know that that would be a zombiecalypse…
There will be. It will come as a result of the falling dollar when Wall Street execs start losing their minds and become the walking dead. Man, if you Austrian econ guys had your heads on straight we could be pals. It seems like just about everything you & lifticus say I can agree with until you start babbling about gold and conspiracies. :)[/quote]
You do not think that it was very convenient for bankers in a fractional reserve system to establish a fiat currency and a lender of last resort?
You also do not think that it means to give someone way to much power create money out of thin air?
The Austrian business cycle theory may also not be THE answer, but if you look at the US real estate market it seems to follow the Austrian playbook to a t.
beebuddy, I apologize for getting a little emotional. We certainly got off track. The title of the post is “Recession to Bottom in 2014”.
I think it would be a little crazy not to think that it is very possible for 2014 to be close to the bottom. maybe 2012 will be closer but, that is still a long time. Thats the whole point of the post based on its title. if we can’t agree on that then we are all screwed
[quote]fearlesswarrior wrote:
beebuddy, I apologize for getting a little emotional. We certainly got off track. The title of the post is “Recession to Bottom in 2014”.
I think it would be a little crazy not to think that it is very possible for 2014 to be close to the bottom. maybe 2012 will be closer but, that is still a long time. Thats the whole point of the post based on its title. if we can’t agree on that then we are all screwed[/quote]
I’m thinking 2009 will be the worst of it, and some sectors will probably already start to recover by then. 2009 is the year to buy property IMO. I’m really looking into it.
[quote]orion wrote:
beebuddy wrote:
orion wrote:
beebuddy wrote:
fearlesswarrior wrote:
Good luck with your Bretton WoodsIII
Yes, and good luck to you fighting zombies during the apocalypse.
Gosh, you don´t even know that that would be a zombiecalypse…
There will be. It will come as a result of the falling dollar when Wall Street execs start losing their minds and become the walking dead. Man, if you Austrian econ guys had your heads on straight we could be pals. It seems like just about everything you & lifticus say I can agree with until you start babbling about gold and conspiracies.
You do not think that it was very convenient for bankers in a fractional reserve system to establish a fiat currency and a lender of last resort?
You also do not think that it means to give someone way to much power create money out of thin air?
The Austrian business cycle theory may also not be THE answer, but if you look at the US real estate market it seems to follow the Austrian playbook to a t.
edited[/quote]
Austrian economics is an ugly result of the divorce of politics from economics.
I’m thinking 2009 will be the worst of it, and some sectors will probably already start to recover by then. 2009 is the year to buy property IMO. I’m really looking into it.[/quote]
I think 2009 to possibly 2011 could be the worst of it but I definitely agree that it is the time to load up on property. This kind of opportunity comes generally only once in a life time so take advantage of it and secure your and your family’s future.
If you want more info on RE then go to www.reiclub.com I’ve been a member/lurker for years and I’ve learned more from their articles and especially forums than you possibly could from a book. People there have experience with mobile homes, renting, lease to own, short sales, wholesaling, commercial, etc. It is the T-Nation of the RE world. I’ve posted links to good topics in the past so I won’t clutter up this thread but anyone who is interested PM and I can find some good stuff for you. Seriously, if your interested don’t live with regret a couple years from now instead of having your finances secure.
On another note I’m both happy and pissed. I really wanted to buy Ford and GM stock before the bailout but won’t have the money until the beginning of the year. However, they are still both fairly affordable and I don’t see Ford (my main pick) sky rocketing since they haven’t accepted any bailout. Hopefully GE, along with some other solid picks, will stay at a decent price so my couple thousand can do some damage.
[quote]beebuddy wrote:
fearlesswarrior wrote:
We are not near the bottom, there are still a landslide of loans that will default. And thats alomost impossible to predict because of the 3-5-7 year ARM loans. We also dont know when those loans were written.
The Fed is also going to print almost $8 Trillion!!! Along with many central banks around the world printing out billions in their paper currency.
Major inflation is on the way in the next couple of years. Can you say $10.00 per gallon???
Numbers dont lie… see below
Sounds like a bunch of bullshit to me. There is only one more round of loans set to default, and why the hell would the fed print that much money!? Also, I would have to be braindead to click even one of your five links with “gold” in the title. There will be another Breton Woods with China and everything will be fine.[/quote]
Doesn’t anyone notice that all the doomsday, runaway inflation references come from a website named 24 Hour Gold.
They couldn’t possibly have any ulterior motive in scaring people into rushing to gold, would they? Would they?
[quote]beebuddy wrote:
Austrian economics is an ugly result of the divorce of politics from economics.[/quote]
The fact that you don’t understand the difference between politics and economics is why you don’t understand economics.
Economics doesn’t seek to tell people how they should act, it only seeks to explain what happens when they do.
If you don’t understand that you cannot understand economics. Maybe you should read some intro theory and quit bashing something you do not understand.
[quote]beebuddy wrote:
orion wrote:
beebuddy wrote:
orion wrote:
beebuddy wrote:
fearlesswarrior wrote:
Good luck with your Bretton WoodsIII
Yes, and good luck to you fighting zombies during the apocalypse.
Gosh, you don´t even know that that would be a zombiecalypse…
There will be. It will come as a result of the falling dollar when Wall Street execs start losing their minds and become the walking dead. Man, if you Austrian econ guys had your heads on straight we could be pals. It seems like just about everything you & lifticus say I can agree with until you start babbling about gold and conspiracies.
You do not think that it was very convenient for bankers in a fractional reserve system to establish a fiat currency and a lender of last resort?
You also do not think that it means to give someone way to much power create money out of thin air?
The Austrian business cycle theory may also not be THE answer, but if you look at the US real estate market it seems to follow the Austrian playbook to a t.
edited
Austrian economics is an ugly result of the divorce of politics from economics.[/quote]
On the contrary, it was the Austrian emperor Joseph II that decreed that public servants not only had to learn the law, but also economics, in order to understand the consequences of their decisions.
That lead to the unique situation that there were advanced university degrees that contained elements of law, economics and political sciences in the capital of one of the five great European powers.
So, Austrian economics started as an attempt to bring those areas of knowledge closer together.
[quote]LIFTICVSMAXIMVS wrote:
beebuddy wrote:
Austrian economics is an ugly result of the divorce of politics from economics.
The fact that you don’t understand the difference between politics and economics is why you don’t understand economics.
Economics doesn’t seek to tell people how they should act, it only seeks to explain what happens when they do.
If you don’t understand that you cannot understand economics. Maybe you should read some intro theory and quit bashing something you do not understand.[/quote]
Don’t be so retarded, senor. You’re making economics sound like something as useless as anthropology, sociology, or psychology. I’m of course referring to the near-death of the study of political-economy.
Ha! It means one has bought into the system.[/quote]
No it doesn’t, you monkey. Do you realize how hard is it to get fired from a university? There are isolated incidents of professors being silenced or pushed out for, but overall it takes murder to be fired.
[quote]rainjack wrote:
Fractional reserve banking is not as much a cause of this collapse as is mark-to-market accounting.
And the SEC is opposed to even so much as a suspension of that bullshit.
If it weren’t for mark-to-market, we would not have had the meltdown.
[/quote]
I think you’re confusing mark to market with mark to model and mark to management accounting. (it’s also quite possible that I’m confused too.) With true mark to market, the value of assets would have been accurately assessed as being nearly worthless because there was no market for the assets. The problem was that companies resorted to mark to model when mark to market failed.
In essence, the companies said that “last year the assets were worth X, so since we can’t assess the market value today, we’ll model the asset’s value as X plus Y percentage increase.” The model was to follow the same price curve as prior years when in fact the price curve had changed. When they had no model at all, they valued assets at mark to management, which is basically a wild guess at the value.
The best analogy I read was that of buying a rare baseball card at auction. What is it’s value? If you paid $200,000 for it, you can say your model is that it’s worth at least $200,000 because that’s what you paid for it. Now suppose you put it “on the market” by auctioning it off again. Now suppose nobody came to the auction! According to mark to market, the value is a big fat ZERO because there is no market for it; nobody wants to buy it. That’s very inconvenient for you, especially if you used it as collateral for a loan.
Right now, the estimate of S&P 500 earnings is around $50. The historical average PE is 15, which gives an SP of roughly 750 (currently above 850). This means the market will go lower generally and few will make money.
Should the PE go to 10, a fair probability over the next year, we’re looking at an S&P 500 at…500. This would be a loss of another 40% or so. I challenge anyone to make much money when a collapse like that is happening, accounting gimmickery and all.
Right now, the estimate of S&P 500 earnings is around $50. The historical average PE is 15, which gives an SP of roughly 750 (currently above 850). This means the market will go lower generally and few will make money.
Should the PE go to 10, a fair probability over the next year, we’re looking at an S&P 500 at…500. This would be a loss of another 40% or so. I challenge anyone to make much money when a collapse like that is happening, accounting gimmickery and all.
Nouriel Roubini (the economist being interview on all the major financial news sources, and prof @ NYU Stern) has been providing a similar analysis over the past few months. He expects earnings surprises to bring the S&P down to 500 at worst and 600ish at best.
Seems like the only people expecting a bottom before 2010 are people with a lot at stake to keep the prices up. OH!!! But the recession started 12 months ago and that is the length of an average recession. Sorry but we’ve got a long way to go.
[quote]yorik wrote:
rainjack wrote:
Fractional reserve banking is not as much a cause of this collapse as is mark-to-market accounting.
And the SEC is opposed to even so much as a suspension of that bullshit.
If it weren’t for mark-to-market, we would not have had the meltdown.
I think you’re confusing mark to market with mark to model and mark to management accounting. (it’s also quite possible that I’m confused too.) With true mark to market, the value of assets would have been accurately assessed as being nearly worthless because there was no market for the assets. The problem was that companies resorted to mark to model when mark to market failed. [/quote]
[quote]rainjack wrote:
yorik wrote:
rainjack wrote:
Fractional reserve banking is not as much a cause of this collapse as is mark-to-market accounting.
And the SEC is opposed to even so much as a suspension of that bullshit.
If it weren’t for mark-to-market, we would not have had the meltdown.
I think you’re confusing mark to market with mark to model and mark to management accounting. (it’s also quite possible that I’m confused too.) With true mark to market, the value of assets would have been accurately assessed as being nearly worthless because there was no market for the assets. The problem was that companies resorted to mark to model when mark to market failed.
I am not confused.
[/quote]
Rainjack I’m curious to hear an accountant’s opinion on the flaws with mark-to-market.(at least your t-profile says you are an accountant/previous posts i’ve seen of yours deal with accounting) I’m a student who just did a research project on it, I had a serious problem with the amount of discretion allowed to those labeling their financial instruments as “level 3” or based solely on the companies opinion. I was pretty surprised as a student to find out that you could pull shit like that off… I was using the Blockbuster/Enron’s “Braveheart” and similar situations as support against it…
I’ve heard my professor’s opinions, but not very many accountants opinions on it… what would you have us do with those items without a market/unique
[quote]rainjack wrote:
I am not confused.
[/quote]
Then please elucidate; why is mark-to-market the cause of all our current economic woes? There’s no guarantee the source of my information was correct, after all. I’m always open to learning new things.
