# 1929 will look like a walk in the park compared to 2008?



## Pager (24 December 2007)

From the Sunday Telegraph in the UK, Journalists scaremongering or a possibility ?.

http://www.telegraph.co.uk/money/ma...?xml=/money/2007/12/23/cccrisis123.xml&page=1


----------



## numbercruncher (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Pager said:


> From the Sunday Telegraph in the UK, Journalists scaremongering or a possibility ?.
> 
> http://www.telegraph.co.uk/money/ma...?xml=/money/2007/12/23/cccrisis123.xml&page=1





Dont think its Journalists scaremongering, I mean they merely wrote the article from information from experts, good reading .....

Pretty scary thought really what they are saying !  , get more bearish everytime i read one of these articles 




> Quietly, insiders are perusing an obscure paper by Fed staffers David Small and Jim Clouse. It explores what can be done under the Federal Reserve Act when all else fails.
> 
> Section 13 (3) allows the Fed to take emergency action when banks become "unwilling or very reluctant to provide credit". A vote by five governors can - in "exigent circumstances" - authorise the bank to lend money to anybody, and take upon itself the credit risk. This clause has not been evoked since the Slump.




Whoa whole new meaning to " Helicopter Ben " , maybe theyll start giving money away to avoid the implosion ?


----------



## explod (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Pager said:


> From the Sunday Telegraph in the UK, Journalists scaremongering or a possibility ?.
> 
> http://www.telegraph.co.uk/money/ma...?xml=/money/2007/12/23/cccrisis123.xml&page=1




Yes, todays business age an article by David Hirst headed "Americans 'walk' from loans",  overall facts behind this as explained should send a shiver down all spines.   We can no longer trust the stalwart institutions.  And the latest Dow rally is 'a suckers rally'

Article not available on the web yet.  Check it later on theage.com.au.  I think usually after lunch time.


----------



## profithunter (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*

I love bearish articles like this, it usually means the markets are bottoming.  Its so easy for these "professionals" to jump on the bandwagon and say more bad news is coming in terms of losses and writedowns...big deal, the market has already taken a battering of bad news the last few months and factored alot of this in already.

Have a great Christmas and hears to a rally throughout Jan/Feb.


----------



## The Mint Man (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



profithunter said:


> I love bearish articles like this, it usually means the markets are bottoming.  Its so easy for these "professionals" to jump on the bandwagon and say more bad news is coming in terms of losses and writedowns...big deal, the market has already taken a battering of bad news the last few months and factored alot of this in already.
> 
> Have a great Christmas and hears to a rally throughout Jan/Feb.



Can't agree more these 'experts' are always predicting things that never happen Of course most of them only come out of the wood work once there has already been a bit of bad news, not before. Probably because when they do say something before they usually completely F@#k up!!! At least by scaremongering after a bit of bad news they can say 'oh well I wasn't completely wrong'
Hindsight is a wonderful thing

Cheers


----------



## numbercruncher (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



profithunter said:


> I love bearish articles like this, it usually means the markets are bottoming.





I cant remeber there ever being a similar situation in world markets, what are you comparing it with to label it Usually ?


----------



## vishalt (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*

Ah the UK telegraph. 

You can write anything in it and people will believe you!


----------



## Uncle Festivus (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



profithunter said:


> I love bearish articles like this, it usually means the markets are bottoming. Its so easy for these "professionals" to jump on the bandwagon and say more bad news is coming in terms of losses and writedowns...big deal, the market has already taken a battering of bad news the last few months and factored alot of this in already.
> 
> Have a great Christmas and hears to a rally throughout Jan/Feb.




Um, did you actually read the article?

These "professionals", as you call them, are the department heads of the biggest banks in the world, so you'd think they have some sort of expertise in their chosen profession. They are writing off BILLIONS (maybe TRILLIONS?), and more to come.

None of this has been 'factored in' as yet, despite the higher volatility, markets are still only just shy of recent all time highs. Ignore at your peril or have faith in other 'professionals' who tell you what you want to hear ie have vested interests!



> Goldman Sachs caused shock last month when it predicted that total crunch losses would reach $500bn, leading to a $2 trillion contraction in lending as bank multiples kick into reverse. This already seems humdrum.
> "Our counterparties are telling us that losses may reach $700bn," says Rob McAdie, head of credit at Barclays Capital. Where will it end? The big banks face a further $200bn of defaults in commercial property. On it goes.


----------



## The Mint Man (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Uncle Festivus said:


> have faith in other 'professionals' who tell you what you want to hear ie have vested interests!



That works both ways buddy


----------



## moXJO (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*

Funny how the media ramps the market or scares the public with regularity. Media moguls must make a fortune knowing what their papers or news outlets are going to focus on for the month. I know the crunch is coming but after the amount of bearishness around last week that was one of my signals to get a few longs on Friday.A forum bearometer or bullometer would make a killing.


----------



## Uncle Festivus (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



The Mint Man said:


> That works both ways buddy




Maybe not, I look at the facts & make my own decisions. The bull market has meant it has been a no brainer to investing or trading the stockmarket - if you take your direction from other peoples opinion then the onset of a different type of market will mean indecision, which is what's happening now. 

Investments based on fact will always beat investments based on hope or others peoples opinion.


----------



## Trembling Hand (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



numbercruncher said:


> I cant remeber there ever being a similar situation in world markets, what are you comparing it with to label it Usually ?




DOT Com Bust...... trillions lost
Asian Financial Crisis....trillions lost
LTCM blow .....billions lost
Russian Dept default.....same
South American Dept default.....same

All in the last 10 years all costing billions to trillions in write downs and supposedly pending doom.


----------



## explod (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



trembling Hand said:


> DOT Com Bust...... trillions lost
> Asian Financial Crisis....trillions lost
> LTCM blow .....billions lost
> Russian Dept default.....same
> ...




The dot.com bust was but a walk in the park compared to the FACTS on the current situation emerging.

And the current situation was evaluated and well predicted in a number of books published up to five years ago.

It is the lazy arm chair investors and analysts who are going down the tubes.

Are you long gold yet?

I am an optimist who takes advatage of what the market tells me.


----------



## Trembling Hand (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



explod said:


> The dot.com bust was but a walk in the park compared to the FACTS on the current situation emerging.




FACTS so far up to this point in time is that more has been lost in terms of jobs and money to the dot com bust.

Am I sitting in gold waiting for the world to end? No.


----------



## Uncle Festivus (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



trembling Hand said:


> DOT Com Bust...... trillions lost
> Asian Financial Crisis....trillions lost
> LTCM blow .....billions lost
> Russian Dept default.....same
> ...




Yes, all separate & contained within the global market by strength in other markets (and huge injections of debasement dollars), but now we have a debt driven co-ordinated credit confidence contagion that nobody knows if, when or how it will end - the longer it goes without resolution the more likely a global hard landing, let alone a US hard landing.

Don't you think the EU Central Banks doling out, I think the figure was 500 BILLION, to 'calm' the markets, a drastic measure by any standard. Is it working? We have EU & US credit constipation & a general banking loss of confidence, crashing property markets in Spain, UK and the US. These are not normal markets or times. If you think a CB bail out of a single bank eg Northern Rock was OK, how about a bail out of an entire country eg Spain.


----------



## Trembling Hand (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Uncle Festivus said:


> but now we have a debt driven co-ordinated credit confidence contagion that nobody knows if, when or how it will end -




There is my point. I'm not selling up, buying gold bullion and building a basement hideaway yet. As this thing has yet to play out. Is it not possible that the doom and gloom with the end of the financial world and a depression greater than 1929 may be just a bit too much of a call???

There is not one person on this forum that couldn't flip there whole portfolio in minutes, Change direction or run for the hills. In the mean time there has been plenty of $$ to be made being a bit optimistic.


----------



## wavepicker (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



explod said:


> The dot.com bust was but a walk in the park compared to the FACTS on the current situation emerging.
> 
> Are you long gold yet?
> 
> I am an optimist who takes advatage of what the market tells me.




Hello explod, the signs are there that some severe might emerging here for world markets. BUT is Gold and Silver a safehaven?? I am not sure about this. Let's look back into time and see how Silver performed in the last Great Depression following the Crash of 29.(POG was fixed back then)

Silver still followed commodities and paper assets down during the deflation to a final low in Dec 1932.

The fact that people "rushed into Gold" in the early 1930's has been a mainstay of the gold advocates' argument. They rarely tell you the whole story though. One main reason people bought Gold then is that the U.S. governement had fixed the price, at $20.67/ounce. While everything else collapsed, Gold was soaring in relative value, and it's value gains were guaranteed. Who wouldn't buy it? If the government had fixed the price of any other substance, people would have invested in that instead. Today, gold like silver during the Great Depression, is free to trade at market price, which means that it can go down during a dollar deflation. There is no guaratee that it will do this, only a good case to be made that history indicates otherwise.

Look at some charts explod. Stock charts have been bullish, so have commodities, property, precious metals, currencies trades against the USD. It's "All The Same Market"

If the Stock market tanks it this year, so will commodities, so will precious metals and the USD will reverse. In most cases when we have had falls in the stockmarket in the in the past 2 years this has been the case.

Not saying  that Gold is ready to reverse just yet, but don't be surprised to see it falter in 2008 if the Stock market does too.

Cheers


----------



## Uncle Festivus (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



trembling Hand said:


> There is my point. I'm not selling up, buying gold bullion and building a basement hideaway yet. As this thing has yet to play out.
> 
> In the mean time there has been plenty of $$ to be made being a bit optimistic.





I don't recall having said that on this thread about gold, or advised buying gold or that I am missing opportunities by being hold up in a cave somewhere???


> Is it not possible that the doom and gloom with the end of the financial world and a depression greater than 1929 may be just a bit too much of a call???




No, it's entirely possible, that's why we are discussing it I guess. We should still count that possibility, remote as it may be. Remember, take out the top 25 stocks, plus RIO & BHP, and our market has made a big fat zero return this year, so dig a bit deeper and all is not as it would appear.


----------



## The Mint Man (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Uncle Festivus said:


> Maybe not, I look at the facts & make my own decisions. The bull market has meant it has been a no brainer to investing or trading the stockmarket - if you take your direction from other peoples opinion then the onset of a different type of market will mean indecision, which is what's happening now.
> 
> Investments based on fact will always beat investments based on hope or others peoples opinion.




yes, good point!


----------



## Nyden (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Uncle Festivus said:


> I don't recall having said that on this thread about gold, or advised buying gold or that I am missing opportunities by being hold up in a cave somewhere???
> 
> 
> No, it's entirely possible, that's why we are discussing it I guess. We should still count that possibility, remote as it may be. Remember, take out the top 25 stocks, plus RIO & BHP, and our market has made a big fat zero return this year, so dig a bit deeper and all is not as it would appear.




But those stocks are there? You can't just say, "oh our market would be terrible if you took out all of our good stocks" 

You could in theory say the same about any world market? Oh, take out the big companies, the auto makers, the banks, and the market has hardly moved, run for the hills!


We all know that Australia doesn't really have anything else to offer the world other than resources, and perhaps produce. I think everyone already knows this. It is unfortunate yes, but - oh well.


----------



## noirua (24 December 2007)

A person trading in 1929 would have to have been 21 years-of-age and would now be 99 years old. So it's fairly safe to say that few traders of those times remember it at first hand today. 

If you'r concerned about markets then you could trade as I do, even though my reasons are due to heavy losses in 1987-89.

I at present have 27% in US Bonds and 28% mainly in high risk stocks in the mining sector and the rest in cash. No outstanding loans, no mortgage and a private income sufficient to live on. 

Investing isn't at times how much you have invested or where you have it invested. It's more, what will happen if it's all worth nothing tomorrow.


----------



## explod (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



wavepicker said:


> Hello explod, the signs are there that some severe might emerging here for world markets. BUT is Gold and Silver a safehaven?? I am not sure about this. Let's look back into time and see how Silver performed in the last Great Depression following the Crash of 29.(POG was fixed back then)
> 
> Silver still followed commodities and paper assets down during the deflation to a final low in Dec 1932.
> 
> ...





The following details, coutesy the Privateer Newsletter is one of the reasons why I am long gold and gold stocks, and the charts confirm:-


And the Fed fixed gold as it was a threat to paper currencies, still is, always will be, and will be again soon.


----------



## explod (24 December 2007)

noirua said:


> A person trading in 1929 would have to have been 21 years-of-age and would now be 99 years old. So it's fairly safe to say that few traders of those times remember it at first hand today.
> 
> If you'r concerned about markets then you could trade as I do, even though my reasons are due to heavy losses in 1987-89.
> 
> ...





"If there is one bit of conventional wisdom that we hear repeatedly with respect to investing for a deflationary depression, it is that long-term bonds are the best possible investment.   This assertion is wrong.  Any bond issued by a borrower who cannot pay goes to zero in a depression.  In the Great Depression, bonds of many companies, municipalities  and foreign governments were crushed.  They became wallpaper as their issuers went bankrupt and defaulted...     ...Understand that in a crash, no one knows its depth, and almost everyone becomes afraid.  That makes investors sell bonds of any issuers that they fear could default.  Even when people trust the bonds that they own, they are sometimes forced to sell them to raise cash to live on.  For this reason, even the safest bonds can go down, at least temporarily, as AAA bonds did in 1931 and 1932"...   Prechter Jr. 2002


----------



## son of baglimit (24 December 2007)

for more points of view on this whole drama, get a copy of this weeks AFR, issued saturday (the xmas special) - lots of things to mull over.


----------



## Trembling Hand (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Uncle Festivus said:


> I don't recall having said that on this thread about gold, or advised buying gold or that I am missing opportunities by being hold up in a cave somewhere???
> 
> 
> No, it's entirely possible, that's why we are discussing it I guess. We should still count that possibility, remote as it may be. Remember, take out the top 25 stocks, plus RIO & BHP, and our market has made a big fat zero return this year, so dig a bit deeper and all is not as it would appear.




Uncle I am quite aware of the problems that the XAO is in and have stated the lack of momentum in the Aussie market outside a couple of strong Big Caps on my blog all year as well as from time to time on the XAO thread. But my point is there is always problems to be dealing with and the upside and down side are always over stated. But it has payed to be a bit optimistic with a dash of caution. 

That's always the trick, finding the Bull in-between all the Bulls**t.

My response about the gold and battening down the hatches wasn't meant to say that you were pushing that tactic. Was more about being in the market when there is opportunities rather than not being in it and waiting for the end of the world. 

Anyway.
Happy Festivus & Serenity now.


----------



## Smurf1976 (24 December 2007)

*Re: 1929 will look like a walk in the park compared to 2008 ?*



Uncle Festivus said:


> Remember, take out the top 25 stocks, plus RIO & BHP, and our market has made a big fat zero return this year



Sounds like the Nasdaq 8 years ago.

Increasing reliance on a shrinking number of players to keep the overall market going up tends to indicate trouble ahead. 

Same with most non-financial things as well - eg the number of countries with delining oil output exceeds those with rising output - a likely indication that top in oil production is near. Same with a lot of other things too.


----------



## Awesomandy (25 December 2007)

The article has an element of truth, but it is assuming that there will be a great policy error by the central banks, which most likely wouldn't happen *touch wood*. Credit has been increased significantly in the past few years to take advantage of the low rates, spendings have increased also, and quite some money were borrowed for trading/investment as well. This growth has included some people who were never capable of repaying the debts, and shouldn't have taken out the loans in the first place. What we need now is to keep the interest rates at a relatively high level (compared to the past few years), slow down growth, flush out those who shouldn't have borrowed in the first place, and let the system catches up with the spendings and growth that occured in the past few years. After which, there would be a good foundation for future growth.


----------



## Awesomandy (25 December 2007)

I should also add that, despite what is happening in the economy, there is still a lot of money around in the system, looking for a home. There are many institutions and high net-worth individuals, and, currently, the smart money is in cash (in terms of long-term investing anyway). They are waiting like vultures, ready to snap up any bargains that come along.


----------



## numbercruncher (28 December 2007)

Interesting and very Valid point in this article, didnt quite know which thread to add it too, might be worth one of its own even!



> *Why companies need owners*
> 
> Today's CEOs are accountable to no one, says shareholder activist Bob Monks.
> 
> Monks writes: "History will look back on the 1990s and early 2000s as a time when the principal officers of public American corporations transferred from shareholders to themselves approximately $1 trillion - or 10 percent of the market value of public exchanges. This must be the largest peacetime movement of wealth ever recorded, and it was accomplished through stealth that amounted to theft and in a spirit of regulatory permissiveness that certainly rises near to the level of criminal neglect."





http://money.cnn.com/2007/12/27/magazines/fortune/gunther_ownership.fortune/index.htm


----------



## explod (28 December 2007)

Awesomandy said:


> The article has an element of truth, but it is assuming that there will be a great policy error by the central banks, which most likely wouldn't happen *touch wood*. Credit has been increased significantly in the past few years to take advantage of the low rates, spendings have increased also, and quite some money were borrowed for trading/investment as well. This growth has included some people who were never capable of repaying the debts, and shouldn't have taken out the loans in the first place. What we need now is to keep the interest rates at a relatively high level (compared to the past few years), slow down growth, flush out those who shouldn't have borrowed in the first place, and let the system catches up with the spendings and growth that occured in the past few years. After which, there would be a good foundation for future growth.




The Central Banks are private entities that were created for and exist to support the banking system.  In creating cheap money they have created the problems and by creating more money out off thin air they are creating more problems. Not for the banks of course, because the creation of money for lending gives them fees as it moves between the differeent parties as well as interest returns.

So policy error, think about it, it is on purpose to suck money in for those who own the multinational banks.   A lot of spin and advice comes from so called experts and advisors who are employed by the banks.  I notice they are of late warning about the sub-prime problems, they always issue the warnings after everyone knows about it.  The sheeple, who only listen when the banks speak think. "gee.. thier smart"

By expecting the worst you can be prepared to protect yourself and profit from it as well.

Gold is my store of cash.


----------



## ithatheekret (28 December 2007)

I had an interesting discussion with an analyst once , I asked for the NPV 
( net present value ) on a project well underway . He was stumped so I gave him a week , he was still stumped and had discounted quite alot with the stocks share price in his report , which I sent back reappraised for the stock , they laughed at me , way too soon though , the stock tumbled after the brokerage report . To date it has been my best swoop and it was Orica .


----------



## explod (28 December 2007)

ithatheekret said:


> I had an interesting discussion with an analyst once , I asked for the NPV
> ( net present value ) on a project well underway . He was stumped so I gave him a week , he was still stumped and had discounted quite alot with the stocks share price in his report , which I sent back reappraised for the stock , they laughed at me , way too soon though , the stock tumbled after the brokerage report . To date it has been my best swoop and it was Orica .




That story is amazing.   My Father, dead now since 1969 always used to speak the priases of ICI from which Orica grew.  Dad I think worked for Pivot at Fooscray just after he was demobbed from the Air Force in 1945.

Anyway, some 9 years ago when we started investing, our new adviser after about the second visit said that we should have our own input into the portfolio so asked what I thought.  I suggested Orica, first because of what Dad had said, second because I thought they had a monopoly on explosives (being and ex-cop, and having been stationed near the plant at Sunshine) and third because I thought it was probably an intelligent contribution to the discussion with Mrs present. 

Well I must have been wrong on all counts because he was dead against it.  I think Orica was about $4 then.    Later after we ditched him l was always going to get on when it dipped, it never did and I have regretted it ever since.  Should have listened to my Dad.

Still, not put off we got another adviser which did not last long when he was trying to tie all our money up in off shore wrap accounts (good trailing fees) when our dollar was starting to climb.  For the past 6 years have been my own adviser.


----------



## Peter H (29 December 2007)

Hmmm..... I can still recall some supposed 'experts' warning, during late 2002 and early 2003, that the All Ords could easily fall below 2000 and that it was not a good time to be buying.   May never see another bull run like that again.


----------



## numbercruncher (30 December 2007)

Interesting reading here if anyone is well ... Interested 




> *The Bubble that Broke the World *
> 
> How a book written in 1931-32 tells us what's going to happen in 2008-2009. (9-Oct-2007)
> 
> *Summary:* Garet Garrett's 1932 book, "A Bubble that Broke the World," describes the main features of the mass delusion that the world suffered in the 1920s and early 1930s: debauched use of debt, securitization of credit, and huge asset bubbles that people thought would grow forever. In 1932, America was the creditor nation, and Germany was the debtor nation; today, China is the creditor nation, and America is the debtor nation. Otherwise, everything is the same today as then.




http://www.generationaldynamics.com/cgi-bin/D.PL?d=ww2010.i.garrett071009


----------



## explod (30 December 2007)

numbercruncher said:


> Interesting reading here if anyone is well ... Interested
> 
> 
> 
> ...





A great post numbercruncher.     A must read, think about and spread to your families.   The game is indeed up and you need to be prepared.


----------



## numbercruncher (3 January 2008)

> NORFOLK, Va. ””  Religious broadcaster Pat Robertson predicted Wednesday that 2008 will be a year of violence worldwide and a recession in the United States, followed by a major stock-market crash by 2010




http://www.foxnews.com/story/0,2933,319728,00.html

Not really noted as an economist but this guy has an audience of Millions, and we all know about markets and sentiment !


----------



## Pager (3 January 2008)

numbercruncher said:


> http://www.foxnews.com/story/0,2933,319728,00.html
> 
> Not really noted as an economist but this guy has an audience of Millions, and we all know about markets and sentiment !




These type of people make a calculated guess on whats currently making news IMO.

If they get it right or even close, they will be crowing about it to anyone and everyone, people will hang on there every word, if its completely off the mark then you either hear nothing more or like this guy he comes up with an explanation in his quote, "All I can think is that somehow the people of God prayed and God in his mercy spared us."


----------



## ithatheekret (3 January 2008)

explod said:


> That story is amazing.   My Father, dead now since 1969 always used to speak the priases of ICI from which Orica grew.  Dad I think worked for Pivot at Fooscray just after he was demobbed from the Air Force in 1945.
> 
> Anyway, some 9 years ago when we started investing, our new adviser after about the second visit said that we should have our own input into the portfolio so asked what I thought.  I suggested Orica, first because of what Dad had said, second because I thought they had a monopoly on explosives (being and ex-cop, and having been stationed near the plant at Sunshine) and third because I thought it was probably an intelligent contribution to the discussion with Mrs present.
> 
> ...




Sorry missed that reply Explod .

That is a top example Explod . 
For all the money they cost , wait till they try and get you into a Crown land lease project in the UK . Had one chap try to sell this type of investment to my mother , a greenfields project he called it . Three phone calls was all it took to unwind his bull . He was reported . To date I have not heard anything on it . So much for ASIC .


----------



## visual (4 January 2008)

http://biz.yahoo.com/ap/080104/war_wounded_finances.html

Housing Glut Could Help War Wounded Overcome Financial Woes and Find Affordable Housing

Could this be what makes people see the glass as half full instead of half empty.


----------

