The Recovery Thread

[antagon]

maybe i'm too young to understand what sound economic function truly feels like. dont bubbles precipitate growth or vice versa (at least from the way it looks)? when have these been isolated from one another?

 

[loosecannon]

maybe i'm too young to understand what sound economic function truly feels like. dont bubbles precipitate growth or vice versa (at least from the way it looks)? when have these been isolated from one another?

I don't think they have. Which is kind of the point if you can bend your perspective until it jumps out at you.

Rational market theory is an illusion. Irrational market theory is and always has been the rule.

But most people never recognize a bubble until it pops. Then they say "OMG, it was so obvious but we didn't see it because it seemed like the norm to us".

 

[loosecannon]

Good point about the industrial revolution and there is the strong possibility that we are at or near the peak of the product life cycle for the industrial revolution. New products at lower (real) prices but not creating net new jobs is becoming a common problem that will become the rule rather than the exception in the future.

It is already the rule. We not only have a population bomb that is eating resources like hominy grits, we also have an ever increasing surplus population.

What will we do when the whole world realizes that the vast majority of the population serves no productive purpose within our econ framework whatsoever?

Will we change our framework or embrace massive depopulation schemes?

The "socialism evil" meme is only beginning. It will ramp up exponentially as we approach an impasse point. Paving the way for atrocities than make Hitler look gentlemanly.

 

[antagon]

maybe i'm too young to understand what sound economic function truly feels like. dont bubbles precipitate growth or vice versa (at least from the way it looks)? when have these been isolated from one another?

I don't think they have. Which is kind of the point if you can bend your perspective until it jumps out at you.

Rational market theory is an illusion. Irrational market theory is and always has been the rule.

But most people never recognize a bubble until it pops. Then they say "OMG, it was so obvious but we didn't see it because it seemed like the norm to us".

it's not irrational to jump on a popular bandwagon if you dont know it's headed for a cliff. i think it is a perfect information fault more than a rationality fail when a bubble pops.

edit: the antagon principle: all popular bandwagons are bound for cliffs.

 

[antagon]

Good point about the industrial revolution and there is the strong possibility that we are at or near the peak of the product life cycle for the industrial revolution. New products at lower (real) prices but not creating net new jobs is becoming a common problem that will become the rule rather than the exception in the future.

It is already the rule. We not only have a population bomb that is eating resources like hominy grits, we also have an ever increasing surplus population.

What will we do when the whole world realizes that the vast majority of the population serves no productive purpose within our econ framework whatsoever?

Will we change our framework or embrace massive depopulation schemes?

The "socialism evil" meme is only beginning. It will ramp up exponentially as we approach an impasse point. Paving the way for atrocities than make Hitler look gentlemanly.

the UK is a fast-forward for an america potentially headed into a uselessness/fairydust based economy. despite most folks on the dole or employed doling out the dole or dolish resources, their economy seems oddly sound on cursory inspection.*

the US has a better course to plot, but the socialists have some voodoo economics in their bag too, it seems.

edit: 'sound' minus any respectable growth (except in the value of sterling)

 

[loosecannon]

"it's not irrational to jump on a popular bandwagon if you dont know it's headed for a cliff. "

"all popular bandwagons are bound for cliffs."

 

[loosecannon]

the UK is a fast-forward for an america potentially headed into a uselessness/fairydust based economy. despite most folks on the dole or employed doling out the dole or dolish resources, their economy seems oddly sound on cursory inspection.

the US has a better course to plot, but the socialists have some voodoo economics in their bag too, it seems.

Wait till the resource wars really heat up. And that may be only 5 years from now.

 

[Toro]

it's not irrational to jump on a popular bandwagon if you dont know it's headed for a cliff. i think it is a perfect information fault more than a rationality fail when a bubble pops.

edit: the antagon principle: all popular bandwagons are bound for cliffs.

Its also not irrational if you've studied bubbles, how they work and how they pop. The greatest rate of gain is always at the end of a bubble. So if you know what you are doing, you can make a boatload of money. But you have GOT to know what you are doing. Otherwise, don't try this at home.

 

[antagon]

"it's not irrational to jump on a popular bandwagon if you dont know it's headed for a cliff. "

"all popular bandwagons are bound for cliffs."

the antagon principle is not popularized as yet. 'why rent' and 'get on the property ladder' will drown it out anyhow. these are appeals to rational decision-making through the potential use of misinformation. a trend will always compound itself because of rational bandwagoneering until it is overinvested and busts.

its not just economics: look at all this 80s retro fashion out there. BUST ALREADY. make it fuckin stop!

 

[antagon]

it's not irrational to jump on a popular bandwagon if you dont know it's headed for a cliff. i think it is a perfect information fault more than a rationality fail when a bubble pops.

edit: the antagon principle: all popular bandwagons are bound for cliffs.

Its also not irrational if you've studied bubbles, how they work and how they pop. The greatest rate of gain is always at the end of a bubble. So if you know what you are doing, you can make a boatload of money. But you have GOT to know what you are doing. Otherwise, don't try this at home.

popular bandwagons are fraught with amateurs 'trying this at home'. good for the gainsman.

 

[antagon]

the UK is a fast-forward for an america potentially headed into a uselessness/fairydust based economy. despite most folks on the dole or employed doling out the dole or dolish resources, their economy seems oddly sound on cursory inspection.

the US has a better course to plot, but the socialists have some voodoo economics in their bag too, it seems.

Wait till the resource wars really heat up. And that may be only 5 years from now.

i think that's where the uber-sterling approach comes in.

 

[loosecannon]

its not just economics: look at all this 80s retro fashion out there. BUST ALREADY. make it fuckin stop!

I hear you! One of the most beautiful 20 yo women I ever met loved nothing more than dancing all night and shaking her luscious booty to the BeeGees. 30 years after they were the bane of the 70's.

 

[loosecannon]

i think that's where the uber-sterling approach comes in.

Have's and have not's. Even the developing nations are gonna be forced to rethink everything that brought us this far. Everything!

 

[william the wie]

The so called underclass is astonishingly rich by historical standards. If you look at the US definition of poverty it includes modern plumbing and various other amenities that Louis XIV could only dream of. With a slow cooker from goodwill the broke can live at levels that defined rich just a century ago through the use of food stamps. Enough 15 bean soup to feed a family of four for a week runs about $6.

 

[editec]

We keep having bubble because we imagine that supply side economic is the ONLY way to go.

So the investment class ends up with more money to invest in production but the consumer class cannot purchase enough to justify the increased amounts of invesment in production.

The price of investments goes up as more and more investment money chases smaller and smaller profits.

Supply and demand ALSO describes investments, folks. Investments are the SUPPLY side of that equasion.

People have to be able to SPEND before suppliers can make profit.

When the investorment classes have all the money and the consumer classes don't, the economy ceases working very well.

This is why the GOP is wrong about the inheritance taxes and the end of their tax breaks for billionaires policies.

The rich have too much of the money, right now. They've had too much money for the last 40 years!

It's the working classes who need to make more money.

But after 40 years of supply sider policies, (tax and trade laws, union busting and so forth) the working class is broke.

You people who think Ayn Rand is a deep thinker aren't thinking too deeply about how societies (and their economies) really work.'

 

[antagon]

nothing will ever prevent bubbles, editec. as long as prices are allowed to fluctuate according to demand, that will always be in the cards. having been through a few, i dont think it's so bad. it doesn't require much more than responsibility and humility not to get caught out by scams in the boom, such that my sympathy for those 'victims' is muted. whether on the supply or demand side, on a decentennial basis, more or less, we will win some and lose some. growing up is about recognizing the perils of adulthood, not railing against the forces of nature.

 

[georgephillip]

"More bad news out of the housing market today as Zillow, a leading online real estate marketplace, released their third quarter report and it largely echos what we saw in yesterday’s Clear Capital report – the housing market is double dipping.

"Home values fell an average -4.3% in the third quarter. Stan Humphries, the Chief Economist at Zillow says the housing market decline is likely to surpass the Great Depression’s decline and that prices are unlikely to recover before next summer:

'While not unexpected, the unceasing declines in home values signal that we’re in for a long, bleak winter of continued troubles for the housing market. The length and depth of the current housing recession is rivaling the Great Depression’s real estate downturn, and, with encouraging signs fading, will easily eclipse it in the coming months.'”

When Humphries says the "housing market decline is likely to surpass the Great Depression's decline..." does it follow the entire US economy is likely to collapse in the same way as during the First Great Depression?

ZILLIOW: HOME PRICE DECLINE...

 

[antagon]

i dont think there's a strong enough link between housing and the economy in the 30s. the perpetual home development charge really started in the 50s. since then, there has been a huge market for homes and the idea of home ownership has become vogue where it was certainly not the case in the 19th and early 20th century when things were handled like a monopoly board.

it is hard to say if the housing outlook will cause a depression. home-related employment was a major service sector, and the labor market will undoubtedly have to show its flexibility over the next 5 years for a full recovery there. even with the lower prices which are likely to be around for years, the issue of low consumption is a concern, but it is only on the buyer's market.

time for the REO homeowners to collect some rents on the fallow/ferral home market?

 

[Foxfyre]

The so called underclass is astonishingly rich by historical standards. If you look at the US definition of poverty it includes modern plumbing and various other amenities that Louis XIV could only dream of. With a slow cooker from goodwill the broke can live at levels that defined rich just a century ago through the use of food stamps. Enough 15 bean soup to feed a family of four for a week runs about $6.

This is the one fact that the more socialist minded among us seem to most overlook.

(Socialism in this context means those who think it just and important to redistribute wealth from the rich to the less rich.)

The USA's poor enjoy some of the highest standard of living in the world. There are billions of people who covet living as well. Hundreds of millions would trade their circumstances to live just as our homeless live. And because of our Constitution, respect for unalienable rights, the great experiment that is the USA gives our poor opportunity to pull themselves out of poverty. That is opportunity that most of the rest of the world's poor do not have.

And it is because we have rich people who are citizens in the same boat with poorer people that our poor do as well as they do. I think we shouldn't mess with that system.

 

[antagon]

The so called underclass is astonishingly rich by historical standards. If you look at the US definition of poverty it includes modern plumbing and various other amenities that Louis XIV could only dream of. With a slow cooker from goodwill the broke can live at levels that defined rich just a century ago through the use of food stamps. Enough 15 bean soup to feed a family of four for a week runs about $6.

This is the one fact that the more socialist minded among us seem to most overlook.

(Socialism in this context means those who think it just and important to redistribute wealth from the rich to the less rich.)

The USA's poor enjoy some of the highest standard of living in the world. There are billions of people who covet living as well. Hundreds of millions would trade their circumstances to live just as our homeless live. And because of our Constitution, respect for unalienable rights, the great experiment that is the USA gives our poor opportunity to pull themselves out of poverty. That is opportunity that most of the rest of the world's poor do not have.

And it is because we have rich people who are citizens in the same boat with poorer people that our poor do as well as they do. I think we shouldn't mess with that system.

this relatively favorable circumstance for american poor has been facilitated by socialism.

(socialism in this context means policies subsumed in a capitalist economy effected through progression or coercion in an income tax system and health and human services expenditure).