> Brian wrote:
> "I'm 28, have lived in the US all my life. I've seen good times and bad
> times, high highs, and low lows. Yet we always come through....higher than
> the low times, and lower than the high times. So whatever the gloom and doom
> predicted for the next few years, past experience tells me the end is not
> nigh"
In the early 00s we had the bubble burst, Enron, and Anderson; the
country was fine, but some of the people in it weren't.
I'm saying that the numbers point to that happening again and if it
happens all at once it will be bad. People forget that the 1929 -
1932 crash happened over the course of years, not in one day.
Here's a "fair and balanced" analysis of whether it could happen again:
It Can Happen by Robert Prechter
Title: Founder of research firm Elliott Wave International, author of
Conquer the Crash.
Probability of a 1929-like crash: High. "Every one of the
preconditions for a crash is in place, to a greater degree than ever."
Conditions needed for a crash: Extreme optimism; a narrowing of
breadth (advances versus declines) in the preceding uptrend; a market
that fails to rally to new highs.
What's different today: Nothing. "Human herding propels markets."
The Fed: "Fed intervention to push interest rates down encourages
debt. The greater the debt load, the bigger the bubble, and the bigger
the bubble, the bigger the ultimate crash."
Outlook: "The market has already completed a counter-trend rally, and
the psychology of investors, advisers and economists is dangerously
optimistic. The market is probably doing something more akin to what
happened in 1835-1842 or 1929-1932 [versus the 1970s]. According to my
analysis, the bear market has already resumed, so the crash potential
is significant."
Investment picks: Cash and cash equivalents in a safe bank.
It Can't Happen by Alfred Goldman
Title: Chief market strategist at A.G. Edwards
Probability of a 1929-like crash: "I would say zero to none. I don't
even think about it, it's negligible."
Conditions for a crash: Weak financial infrastructure, lack of global
communication.
What's different today: "The whole financial structure is different
than it was in 1929. Nations didn't talk to each other. Today, we talk
to them too much."
The Fed: "We have a very strong Federal Reserve. Their ability to help
the market during bad times is substantial."
Outlook: "The economy is the strongest it has been in 20 years. The
bear market that we had in February 2000 was the second worst since
the Great Depression. We had a tremendous crash of the stock bubble, a
collapse of telecom and Internet stocks. We had a recession, we had
Sept. 11, war, accounting scandals, corporate malfeasance, mutual fund
scandals, and it still didn't match the break of 1929. You come out
stronger."
Investment picks: Consumer nondurables and medical-related products,
including large-cap pharmaceuticals.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~|
Special thanks to the CF Community Suite Gold Sponsor - CFHosting.net
http://www.cfhosting.net
Message: http://www.houseoffusion.com/lists.cfm/link=i:5:134185
Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5
Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5
Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
