# 20 years Bear Market and the 4th Turning?



## Temjin (2 July 2009)

This is an excellent piece of article from John Mauldin's free newsletter. This is a must read in my opinion since the "research" and "predictions" Neil Howe has made in the books was back in 1997 and based on my understanding so far (without actually having reading the book just yet), are based on facts and historic data, not pure theoritical predictions. 

My opinion is that it seems very plausible we may be seeing a repeat of the historic cycles that has occured over countless generations. The incoming 4th Turning will see a great change that would change the social and economical landscape forever. 

Enjoy the read. 



> Long time readers know that I am a huge fan of the work of Neil Howe. His book, *The Fourth Turning,* was one of the seminal pieces of my reading over the last 30 years. And it has turned out to be stunningly prophetic. Uncomfortably so. A roughly 80 year cycle has been repeating itself for centuries in the Anglophile world, broken up into four generations or turnings. We have begun what Howe called many years ago The Fourth Turning.
> 
> Neil Howe is the co-author, with the late William Strauss, of a number of seminal works on the impact of generations on cycles of history. Howe is a founding partner of LifeCourse Associates (lifecourse.com) which provides research to institutions looking to capitalize on generational research.
> 
> ...






> A 20-Year Bear Market?
> 
> By David Galland, Casey Research
> 
> ...


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## Temjin (2 July 2009)

> The Second Turning, called an Awakening, typically starts out feeling like the high tide of a High, with signs of progress and prosperity everywhere. But just as everything seems to be going along swimmingly, large swaths of society begin to chaff under the social conformity of the High, beginning to gravitate to more individualistic pursuits and demanding that their personal interests come first. You may recognize the "Consciousness Revolution" of the mid-1960s through early 1980s, correctly, as the Second Turning.
> 
> Next up, the Third Turning, which Howe calls an Unraveling, is much the opposite of a High. To wit, individualism dominates, while institutions are increasingly weak and discredited. Quoting Howe on the Unraveling...
> 
> ...




bear with me, this is a long article...heh


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## Temjin (2 July 2009)

> You can also take some comfort in the fact that Millennials are builders, not destroyers. By contrast, the individualistic Boomers that dominate today's aging political class are world-class dissenters, radio talk show aficionados always ready to scrap it out for their beliefs. Millennials want to skip the philosophical debate and get straight to fixing things.
> Other insights about Fourth Turning periods gained from my conversation with Neil Howe...
> 
> Government grows powerful, and sweeping new legislation is enacted. The old 1990s rule was: just compete and stay off the state's radar screen. The new 2010s rule will be: better have a presence in Washington so you're not dealt out of the "new" new deal. One political party tends to dominate. The Democrats under FDR during the last Fourth Turning offer a good example. While Neil Howe doesn't think it will necessarily be the Democrats this time around, they are certainly in the pole position at this point.
> ...




Of course, this research only applies to what happened in the US. How "correlated" Australia would be in his cycles and how globalisation would imbalance that correlations is still unknown at this stage.


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## Krusty the Klown (2 July 2009)

It would be interesting to see if these 80 year cycles appear not just Australia but in non-Western cultures also. Say long established ones like China or the Middle East.

It's possible that this cycle could be a behavioural phenomenon in English speaking cultures - ie rebelling against the last generation. Whereas in Asian cultures the elders in the community are revered and actually respected, so their ideas might be implemented and not passed over.


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## lasty (2 July 2009)

The US have had it good for so long and think it will return.Unfortunately it wont and the mantle will be handed over to someone else who is willing to work hard and earn it.
No one in Europe or America has that commitment therefore it will come from Asia, India or China are the big contenders.
The US domination of world power has begun to slide and I like many cant seeing it get back to its strength (like it once was) for a very long time.
Bye Bye Miss American Pie.


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## Happy Reaper (2 July 2009)

lasty said:


> The US have had it good for so long and think it will return.Unfortunately it wont and the mantle will be handed over to someone else who is willing to work hard and earn it.
> No one in Europe or America has that commitment therefore it will come from Asia, India or China are the big contenders.
> The US domination of world power has begun to slide and I like many cant seeing it get back to its strength (like it once was) for a very long time.
> Bye Bye Miss American Pie.




Interesting.....

You just have to look at India and China buying up some big names going real cheap to see this is already happening. Eg Tata Communications recent purchase of B.T. International - means now Indian companies now control roughly 1/3rd of all international cable comms. At least its not China who might choose to implement selective "filtering" on who and what gets sent via their networks, such as banning VOIP.


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## johenmo (2 July 2009)

Every "great civilisation" rises, plateaus and declines and is replaced by another - and the decline is typically seen with a decline in morals, increase in hedonism and some other aspects which escape me atm.  
Some writers believe western civilisation is in the decline stage.  I tend to think that we are but the decline is more gradual than in the past and will take a long time.

But the environment will prob decline faster.

INteresting article...


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## Agentm (2 July 2009)

this is the comedy thread isnt it????


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## Buckeroo (2 July 2009)

Another author who writes about the imminent decline of the West is Ronald Weinland - http://www.the-end.com/

If you include Nostradamus & even the bible, they all point to an era sometime soon. The year 2012 has been banded about as the year of great upheaval.

If you believe all this, then live now like there's no tomorrow.

I do though agree with you johenmo, that a decline of some sort has begun in the West just like past empires & world powers. I think we will gradually get poorer & our standard of living will decline. This will probably lead to big social problems etc.

Cheers


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## jbocker (3 July 2009)

Temjin said:


> Of course, this research only applies to what happened in the US. How "correlated" Australia would be in his cycles and how globalisation would imbalance that correlations is still unknown at this stage.




Thanks Temjin, I have read a book by Harry S Dent that reads in similar terms with 80 year cycles and other cycles and waves. Dent has previously written other books (which I have not read) and claim to have picked the good times we have just had. His book The Great Depression Ahead does give some overview of other nations. From memory Aus will follow suite but nowhere near as bad. Worth a read albeit a little heavy going at times.

I had heard recently (once) of generation Z (born 2000+) and called the 'We generation'. Seems to fit with what is suggested in the article you have attached.


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## jbocker (3 July 2009)

Buckeroo said:


> ...
> If you believe all this, then live now like there's no tomorrow.
> ...




I think we just did!...


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## gfresh (3 July 2009)

jbocker said:


> I had heard recently (once) of generation Z (born 2000+) and called the 'We generation'. Seems to fit with what is suggested in the article you have attached.




You mean all the fat 9 year olds? 

All things change.. longer term cycles aren't too out there in terms of theories. I think we could be 10 years away from a major war, maybe less. Not sure who, but there are a few contenders. These tend to accompany great economic and societial change more than any other (as the article states). It is a scary thought, but major wars have always occured every couple of decades, we cannot avoid them as we are human. 

Again the article points out a valuable point, the values of each generation change slightly based on the era in which it takes place.. I know my attitude can be different to the baby boomers 25 years above me, and those 15 years younger than me. We all experienced different things which shapes our opinions and ways of live, whether we notice it or not at the time.. often it's more obvious later on. 

I think the generation below ("gen y") is pretty soft, but the generation after that will be a much harder nut, possibly born into the struggles and economic problems that are forming today. They may also have a much greater fear or belief in the environment and sustainability, which will also play a big part of their lives.


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## Taltan (3 July 2009)

Right so World War I was part of the glorious third turn last time. Next time please try and keep the comedy shorter.


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## gfresh (3 July 2009)

So the World Wars didn't have any economic, social, or inact long lasting changes in the world? 

Now that's funny..


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## Krusty the Klown (3 July 2009)

gfresh said:


> I think we could be 10 years away from a major war, maybe less.




I think you might be right if you use history as a judge.

If you look back through history, there is rarely a year or decade that does not have a conflict going on at some point on the planet. Be it two tribes, city states, or countries, or regions, or coalitions. 

Warfare does not just have to be spilling blood, it can be a political alliance or economic sanctions. The last two are manuevring for higher ground.

We are a competitive species. We compete with other creatures and plants and each other for survival, I think it will be a long, long time before warfare becomes extinct.

Physical warfare is a major catalyst for societal change. Although we are involved in two conflicts at the moment, it does not seem to be a catalyst for Australian society at the moment. 

Even if you look at Vietnam or WWI, both wars where we were not in any danger of invasion, they still changed attitudes and economics here (Federal income tax was introduced in WWI for example).

Anyway, back to work.......


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## johenmo (3 July 2009)

Buckeroo said:


> I do though agree with you johenmo, that a decline of some sort has begun in the West just like past empires & world powers. I think we will gradually get poorer & our standard of living will decline. This will probably lead to big social problems etc.




As third world rises and first world slips (but not in their own minds) the balance shifts and people get resentful.  Afterall it's one's "right" to be sheriff of the world/world leader/etc.

I think a global war will only come about through one or two crazies (as usual?).  Otherwise lots of little wars to keep arms merchants ticking along nicely - better than trading!!


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## jbocker (4 July 2009)

jbocker said:


> I had heard recently (once) of generation Z (born 2000+) and called the 'We generation'. Seems to fit with what is suggested in the article you have attached.




Whoops.. I meant 1990+ not 2000. Recall now one of the kids just fell into this group. Anyway only heard it once, not sure the "z gen" will stick. and since I only heard it maybe it was supossed to be "Wii generation"


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## Smurf1976 (4 July 2009)

Thinking about events locally and nationally (Australia), that all makes a hell of a lot of sense to me in terms of what's actually happened over the past few decades and seems to be happening now.


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## Temjin (4 July 2009)

Smurf1976 said:


> Thinking about events locally and nationally (Australia), that all makes a hell of a lot of sense to me in terms of what's actually happened over the past few decades and seems to be happening now.




On the positive side, at least we are conscious of the potential secular change going on out there and can position ourselves to benefit from it. 

The problem is that most people still believe the pre-bust credit boom era will be back with us after their "preferred" V-shape recovery. That lending will go back to normal again and that consumption would be as "beyond means" as before. And that asset prices like shares and properties will grow beyond its historic rate (like 30%+ p.a. for shares and 15%+ p.a. for properties) forever. 

Is China really going to insulate us from the secular change in US consumers' behaviors? Are they capable of replacing every single lost US consumption dollar in a relatively short time? I don't have too much faith in that at least in the short term. 

As for potential world wars, I really hope not. I don't see any countries would be sane enough to start invading other countries for resources at least in the next few years. (i.e. full scale invasion) But I may see strategic strikes along with political and economic pressure to achieve the same result.


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## Krusty the Klown (4 July 2009)

Temjin said:


> As for potential world wars, I really hope not. I don't see any countries would be sane enough to start invading other countries for resources at least in the next few years. (i.e. full scale invasion) But I may see strategic strikes along with political and economic pressure to achieve the same result.




Whatever you do, don't read any history books.  

Planet Earth is overdue for one from historical accounts.


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## jbocker (9 July 2009)

Temjin said:


> ...
> 
> The problem is that most people still believe the pre-bust credit boom era will be back with us after their "preferred" V-shape recovery. That lending will go back to normal again and that consumption would be as "beyond means" as before. And that asset prices like shares and properties will grow beyond its historic rate (like 30%+ p.a. for shares and 15%+ p.a. for properties) forever.
> ...




Agree with you, baby boomers have to some degree been through their big spending years, ie they are on big earnings, little debt so can spend and invest big money.Banks et al have tried to suck this out of the baby boomers and everyone else to the point where the sub-prime crisis has fallen upon us. Superann in turn has copped a flogging and the retiring baby boomers now are interested in scraping together enough to retire on. Licking their wounds, they probably wont be chasing the investment with such enthusiasm for a while (living in fear, greed will come again no doubt but will the cash be there to spend?). Boom and Bust the cycle continues, growth will return, not at the rates we have just seen, for a while anyway. For the youngsters these are good buying years.


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