David Allen

10 Reasons to Believe That We're in a Depression

I nevedr heard anything so crazy in my life.


On Nov 19 11:52 AM Mad Hedge Fund Trader wrote:

> bdc I know what keeps Obama awake at night. Let’s say we spend our
> $2 trillion in stimulus and get a couple of quarters of weak growth.
> Then once the effects of the stimulus wear off, we slip back into
> a deep recession, setting up a classic “W.” Unemployment never does
> stop climbing. This happened to Roosevelt in the thirties. So congress
> passes another $2 trillion reflationary budget. Everybody gets wonderful
> new mass transit upgrades, alternative energy infrastructure, and
> bridges to nowhere. But with $4 trillion in spending packed into
> two years, inflation really takes off. The bond market collapses,
> the dollar tanks big time, gold goes ballistic to $5,000, and silver
> explodes to $50. Ben Bernanke has no choice but to engineer an interest
> rate spike, taking the Fed funds rate up to a Volkeresque 18%. Housing,
> having never recovered, drops by half again. This all happens in
> the 2012 election year. Obama is burned in effigy, a Mormon is elected
> president, and the Republicans, reinvigorated by new leadership,
> retake both houses of congress. We invade Iran. Crude hits $500.
> This is not exactly a low probability scenario. Remember Jimmy Carter?
> This is why junk bond yields are still stubbornly high at 12.5%,
> and credit default swaps live at lofty levels. Are the equity markets
> pricing in this possibility? No chance. The risk of Armageddon is
> still out there. Personally, I give it a one in three chance. Pass
> the Xanax.

As History Repeats Itself, Time to Buy Gold and Silver

One great difference in 1930 and 2009: In 1930 the Smoot-Hauley Tariff Act became law, and then devastation reigned supreme in both the stock market and world trade.


On Mar 29 12:31 PM Bundee wrote:

> Expecting the market to tank in June 2009 because it tanked in June
> 1930 is really crystal ball predicting, but expecting the market
> to rise even a little in this environment is wishful thin king at
> best.
>
> Quote:
> Stock prices move in reaction to the current and perceived state
> of the economy and attractiveness of equity investments. Since you
> fail to explain how economic conditions and political reactions to
> those conditions today mirror what happened in 1930, this "analysis"
> - - which could be replicated by any 6 year old child - - is a complete
> waste of space.
>
> Hardly a waste of space if you look long and hard at what heppened
> then and now-
>
> 'perceived state of the economy and attractiveness of equity investments'
>
>
> 1930-Investors were hit financially when the bottom fell out of wall
> street and average investors lost millions.
>
> 2009-Investors were hit financially when the bottom fell out of wall
> street and average investors lost BILLIONs (401K's became 201K's).
>
>
> 1930- Investors were told 'the recovery is just around the corner,
> stocks have never been cheaper, buy now for the stock deal of a lifetime'
>
> and investors watched their stocks fall in value even further.<br/>
>
> 2009- Investors are being told 'the recovery is just around the corner,
> stocks have never been cheaper, buy now for the stock deal of a lifetime'
>
> We will see if stocks recover, but with a World Wide recession hammering
> investments, a return of stock prices to pre 2008 prices is unlikely.
>
>
> 1930- Investor confidence was devastated, wall street was looked
> upon as filled with racketeers, crooks, shysters, etc.. Trust in
> wall street and investment advisors was gone.
>
> 2009- Investor confidence has been devastated, wall street is looked
> upon as filled with racketeers, crooks, shysters, etc.. Trust in
> wall street and investment advisors is gone.
>
> 1930-Banks close due to bad investments they made.
>
> 2009 banks close due to bad investments they made.
>
> Considering the evidence, you can't really blame the author for saying
> that history tends to repeat, now can you?
>
> ..........
> On Mar 29 11:57 AM NYNapoleon wrote: