So basically yet another regurgitation of the same sky is falling trap we've been hearing for months. Yes, I said trap instead of crap. It's slang for crap. The things that are getting hit hard right now are the things that were overvalued to begin with.
While all the predictions were somewhat negative, but realistic about the economy, to use the term "scary" is media sensationalism at its finest.
Objectively, we all need to prepare ourselves to weather this economic storm. Whether or not that's "scary" is a personal opinion. Personally, I'm not scared. However, I'd like to believe that I will continue to react to the situation in rational ways (unlike the political classes, unfortunately, who seem to be in full panic mode).
It's better to stay in things with low returns rather than to lose 50% of your wealth. You should preserve capital. It'll be hard and challenging enough.
"When people are fearful be greedy when people are greedy be fearful"
12 months ago most of these people's advice was terrible what makes people think it's gotten better after that? It's possible to make good money by riding the economy at large, but generating actual wealth vs. paper fortunes necessitates the same approach in up and down markets. Find an inefficiency in the current system and exploit it.
Keep in mind we're all pretty young here at HN and are years from retirement (and if you're like me also pretty broke). If you were older and heavily invested in the market/your home and 2-5 years away from retirement, you'd be pretty scared about how you're going to support yourself as you get older and your health fails.
What bothers me is how CNN has decided that succession implies insight. By the screens, they:
1. "saw the mortgage-related meltdown coming"
2. "warned of a subprime contagion back in July 2007"
3. "called both the dot-com and housing bubbles"
5. "predicted two years ago that the credit bubble would devastate Wall Street"
7. "was among the first to warn that the big banks had big problems"
The problem is that none of these people might have any insight. Yes, they said something, then it came true. However, astrologists say things that come true. They're more wrong than they're right, but you can easily find astrologists who have gotten a few big things correct. CNN has plastered up at least 5 of them as having the insight to see this mess coming. If you and I decide today to make predictions - me that 2009 will see a resurgence and you that 2009 will be more of the current pain, one of us is going to look like a financial genius. Well, at least to those who infer insight from a succession of events. One of them even says, "I was right a year ago, and I think I'll be right this year too."
I have made one correct prediction for the future, therefore future predictions of mine are likely to be correct. I guess I'm sick of the doom and gloom the media wants to sell us. Part of what happens in economic crisis is that people stop trusting the economy. In that distrust, people do things that aren't economically useful like hoarding (since they fear for the worst). It's a natural reaction and these stories heighten that reaction making the crisis considerably worse. People say credit is tight. People (banks) hear that and don't want to lend money since they might need it to cover something unexpected. As banks stop lending, credit actually becomes tight.
While I certainly don't believe this crisis is merely a factor of public perception, public perception can (and has) led to real problems in other nations and does cause problems like our current situation to become worse than it is - similarly, when we're all happy about the economy, our perception puts ourselves into a bigger boom than is real.
Live simply. Don't overextend. Save for the rainy days. Ignore the news.
On a somewhat related note, I 'called' the Yahoo/Microsoft deal years before it was even discussed (I still think it will happen)
Can I have a CNN Tech article now please?
Predictions mean nothing, what you do about those predictions is what matters. Out of all of these people, who profited or did something to take advantage or help people?
oh come on, this predictions are just the tip of the iceberg. they address a system obviously in a downward trajectory, but fail to assume the system itself could go out the window.
we are at the end of a multi-decade global experiment in massive debt and abuse of fiat currency. printing paper is fine but it has to be checked by the creation of real value in the economy. we threw that out the window years ago...there is ONE HALF A QUADRILLION dollars in global debt outstanding (all public, private, govt debts). there is no government or any other body that has any real power to address this massive imbalance. what do they do? if they repudiate their currencies, the governments are essentially committing suicide. if they try to monetize all the debt, they create zimbabwe-like inflation everywhere. if they let asset prices deflate, you get a twenty year ultra-recession.
its too late for policy fixes now. the time for that was 1982. when (not if) the US debt hits twenty trillion or so (at our current rate, will happen before 2018), its game over. no more USA. the dollar will become worthless. by the way, unless all the baby boomers die tomorrow, you are already on the hook for at least fifty trillion (US govts own estimates) for their healthcare and social security by 2030. so in reality your kids may see the US debt go to $100 trillion. when (not if) the dollar becomes worthless, the world economy is done, over.
before 2020, people in the USA will be shooting each other with guns in order to obtain food and water. the deed to your house will be your ability to defend your property with a gun. like russia after the bolsheviks, you will come home to find three families squatting in your living room. if they have more guns, its their house. don't believe me? get out of your browser and go drive to areas of detroit or other relics of the rust belt, they are already looking like eastern europe after the fall of the soviets. its already started folks. don't feel too comfy in california, the state is essentially broke already.
if you think this is a freakshow rant, go read up on the french revolution. you know what caused it? DEBT. they simply refused to believe that they could go into so much debt that their society would actually fall apart
or why not look at weimar germany? look at who pulled them out of their currency catastrophe?
an american stalin will emerge before 2025, if the US hasn't already engaged in a civil war in which americans use atomic weapons on other americans
i am open to even one cogent response as to how the US and world can realistically hope to even slow down the ultimate debt meltdown. obama is going to throw another trillion on to the debt in his first three months with his massive stimulus plan, so don't tell me he is going to fix it
The thing about being a contrarian means that you're bound to be declared a prophet at least two or three times in your career. That's probably a nice feeling and great for book sales.
For those of us who spend time building businesses, these sorts of articles don't really mean anything. I'm still not going to crawl into a hole somewhere, so I don't see the point in reading "scary" predictions.
Agreed, in fact the time I waste reading the article (and commenting on it) does more harm to me and my business than the predictions contained within.
14 comments
[ 2.6 ms ] story [ 39.3 ms ] threadObjectively, we all need to prepare ourselves to weather this economic storm. Whether or not that's "scary" is a personal opinion. Personally, I'm not scared. However, I'd like to believe that I will continue to react to the situation in rational ways (unlike the political classes, unfortunately, who seem to be in full panic mode).
"When people are fearful be greedy when people are greedy be fearful"
12 months ago most of these people's advice was terrible what makes people think it's gotten better after that? It's possible to make good money by riding the economy at large, but generating actual wealth vs. paper fortunes necessitates the same approach in up and down markets. Find an inefficiency in the current system and exploit it.
I can hear the Digg votes clicking away.
I have made one correct prediction for the future, therefore future predictions of mine are likely to be correct. I guess I'm sick of the doom and gloom the media wants to sell us. Part of what happens in economic crisis is that people stop trusting the economy. In that distrust, people do things that aren't economically useful like hoarding (since they fear for the worst). It's a natural reaction and these stories heighten that reaction making the crisis considerably worse. People say credit is tight. People (banks) hear that and don't want to lend money since they might need it to cover something unexpected. As banks stop lending, credit actually becomes tight.
While I certainly don't believe this crisis is merely a factor of public perception, public perception can (and has) led to real problems in other nations and does cause problems like our current situation to become worse than it is - similarly, when we're all happy about the economy, our perception puts ourselves into a bigger boom than is real.
Live simply. Don't overextend. Save for the rainy days. Ignore the news.
Can I have a CNN Tech article now please?
Predictions mean nothing, what you do about those predictions is what matters. Out of all of these people, who profited or did something to take advantage or help people?
we are at the end of a multi-decade global experiment in massive debt and abuse of fiat currency. printing paper is fine but it has to be checked by the creation of real value in the economy. we threw that out the window years ago...there is ONE HALF A QUADRILLION dollars in global debt outstanding (all public, private, govt debts). there is no government or any other body that has any real power to address this massive imbalance. what do they do? if they repudiate their currencies, the governments are essentially committing suicide. if they try to monetize all the debt, they create zimbabwe-like inflation everywhere. if they let asset prices deflate, you get a twenty year ultra-recession.
its too late for policy fixes now. the time for that was 1982. when (not if) the US debt hits twenty trillion or so (at our current rate, will happen before 2018), its game over. no more USA. the dollar will become worthless. by the way, unless all the baby boomers die tomorrow, you are already on the hook for at least fifty trillion (US govts own estimates) for their healthcare and social security by 2030. so in reality your kids may see the US debt go to $100 trillion. when (not if) the dollar becomes worthless, the world economy is done, over.
before 2020, people in the USA will be shooting each other with guns in order to obtain food and water. the deed to your house will be your ability to defend your property with a gun. like russia after the bolsheviks, you will come home to find three families squatting in your living room. if they have more guns, its their house. don't believe me? get out of your browser and go drive to areas of detroit or other relics of the rust belt, they are already looking like eastern europe after the fall of the soviets. its already started folks. don't feel too comfy in california, the state is essentially broke already.
if you think this is a freakshow rant, go read up on the french revolution. you know what caused it? DEBT. they simply refused to believe that they could go into so much debt that their society would actually fall apart
or why not look at weimar germany? look at who pulled them out of their currency catastrophe?
an american stalin will emerge before 2025, if the US hasn't already engaged in a civil war in which americans use atomic weapons on other americans
i am open to even one cogent response as to how the US and world can realistically hope to even slow down the ultimate debt meltdown. obama is going to throw another trillion on to the debt in his first three months with his massive stimulus plan, so don't tell me he is going to fix it
For those of us who spend time building businesses, these sorts of articles don't really mean anything. I'm still not going to crawl into a hole somewhere, so I don't see the point in reading "scary" predictions.