Just because you're paranoid, doesn't mean they're not after you. Seriously though, the die-hard pessimists seem to make the worst traders. Bill Fleckenstein makes lovely (and perhaps accurate) arguments for a coming collapse in domestic equities, but it's kinda sad to see him still waiting for a "safe time to go short" and getting shaken out after every hundred-point rally. I guess most permabears are still somewhat shellshocked since '00. But it doesn't necessarily mean their arguments should be completely dismissed.
Doug still makes a great point which is we sell more online today than at the height of the bubble. There was a shake out in that field. Once over a hundred companies made automobiles in usa, then the industry fell to a few really profitable companies. Look at the shake out in retail, montgomery wards, service merchandise all the electronic stores and music stores that bit the dust.
"Seriously" ? Oh yeah "seriously" history has proved indeed that those who pretended to be "serious" were in fact laughable and that the very argument being "serious" just reveals that you try to hide behind a smiley whereas you have absolutly none of real argument ! Just read below and dare say that you won't reflect yourself like in a mirror: In 1929 writing a "Special Letter" to his Babson Reports on October 14th explaining twelve characteristics of a "bear market.", Roger Babson's made a serious warning and this is what the "die-hard optimists" answered which proved unconstestably their pretentious silliness ... the same kind of answer you can hear today from the ever-gullible-of-new-age-era: Even prior to this response to an already sagging 1929 stock market, Babson had been suggesting that the level of credit (which might more properly called debt) was much too high for a sustainable economy and implored everyone to eliminate his debts less he become sucked into the vortex of a market collapse. In the Retail Ledger of January, 1928 an article runs, "Babson Fears End of Prosperity: Can't Last Forever, He Says in His Year's Message to Business. (Jan. 17)." Put your business and your personal affairs on a safe foundation. Get out of debt, wholly if possible, otherwise, reduce your indebtedness as much as possible. There is no reason why the wheel of fortune will not continue to turn for many generations as it has in the past. Panics and depressions may some day be eliminated, but little has yet been done to bring such a millennium about. The Federal Reserve system may have put banks in an impregnable position, but it has not changed human nature. People are in debt today to an extent never before. Sooner or later the dam will break, to be followed by unemployment, failures and hard times. This reply in the Clients Service Bulletin by the American Appraisal Company dated January, 1928 follows Babson's prouncement: If enough folks will interpret the admonition about the "safe foundation" and the "budget system" as a direct warning that they better have an appraisal right away, "we," speaking editorially and personally, eventually or possibly by about next December may be able to comply with the instructions about debt. But at this writing what with Christmas bills on the one hand and March 15th on the other, we view the suggestion "Get out of debt" with the same perplexity as the bashful young man who had been advised to "assume an easy and graceful attitude in the presence of ladies." However, we'll do our derndest, Roger, and thanks for giving us the idea. It always has seemed to us that what you say about service is the best or at least the safest policy to pursue. ------- Hahahahaha laughable no to read this : 'we view the suggestion "Get out of debt" with the same perplexity as the bashful young man who had been advised to "assume an easy and graceful attitude in the presence of ladies."' That's why those who pretend to make laugh of that will be the ones who will be catched in their stupidity and pretention.
In fact it's not a question of being hard-die optimist of hard-die pessimist, it's a question of being REALISTIC and NOT IGNORE THE LAW OF ECONOMICS and that there is no "NEW LAW OF ECONOMICS" they serve since even before 1929 !!! Only the gullible and ignorant can believe in "NEW ECONOMIC" stuffs whereas it is the same farce served so many times that when one knows history of economics it is really laughable to see things repeat again and again ... like the stupid herd in stock market except that it is on the scale of a whole life ! Secondly you are very short term sighted; it seems that your horizon is like an insect within 1 year whereas I speak as for economics for in ten years horizon so don't confound me with the die-hard pessimist that is Prechter since many times I didn't agree with him as I said here I suspect him to be a manipulator (in fact he came from the Big Brokers so not really trustable): http://www.elitetrader.com/vb/showthread.php?s=&threadid=30255&perpage=6&pagenumber=5 "I admit that today there is Prechter who plays the doom and gloom but I suspect this guy is a manipulator: it is since twenty years that he announces the Great Depression, for example when the Dow was just under 10000 he was predicting a plunge to 5000, whereas I said that it would pass 10000 (I have the proof on googlenewsgroup for that). He is a manipulator because he can't ignore that Elliott himself has said that the market's Bull should terminate around 2012, which is funny because my model points towards the same period although I'm not sure that we will reach the target of 16000 I have calculated since I don't know if the law still hold for such scale I don't have thousands of years of stock market history to test it, I can just make the hypothesis that if market stays fractal then the law would be the same. Now for long term the best is not Elliott nor my model it's just the fundamental: demography dictates long term cycles of economics and wars because when people get old, well they are just useless assets. To get rid off them economically speaking it is ... just economic if one follows the logic of some: why feed useless old people instead of pocketing their money if one has the power to do so ? And why not pocket it before they just realise that ? Of course those who control Wall Street, banks and corporates all over the world are Saints, they have proved so multiple times, there is no need to think that they are so immoral to just do that. What's bad when one want to make profits since it is economic business just at very big scale of a nation or the whole world ? Below God there is the Business God on earth let's honor him since he can be so great."
Most every body seems to be over looking the fact that the average family disposable income is only 3%. It was 0 before the fed lowered interest rates 13 times.There is a limit to how long this will last.Disposable income was 50% in1992.Look at the household durable goods numbers which have been weak for the last half year.This tells me that people are buying houses but dont have the ability to put much in them.I've also been watching this happen in my neighborhood.New homeowners that move of their possesions in with several trips in there car,whereas the previous owner needs a moving company to move their posessions.
Comparing the debt to GDP ratio between 1932 and today is misleading. The spike during 1932 was due to a contraction in GDP, not debt expansion. Today's levels are totally unprecedented.
The writings by Gross are very telling. GE and GM are finance companies, not huge conglomerates. If interest rates go higher, suddenly half of GE's earnings are in doubt. How much of the S&P's earnings are finance and interest rate related?
Not this quarter but last quarter of 03 GM didnt make a profit selling cars , the profit came from the lending they did.
Hollywood, Where do you get your data? The FED data shows a different story and I am not able to find a data series for "family disposable income." THese charts from FREDII (St. Louis FED) show a different story: