Unimaginable wealth destruction

[MrBurns]

Sanity??? :bananasmi

Brandy and a broken marriage took care of that.

 

[Bushman]

The thing that annoys me the most is this obsession over the unwinding stage of the great valuation lie. This thread should be renamed 'unimaginable wealth creation followed by a logical return to long-term equlibrium'. Also the gawd awful Kohler's of this wold, the 'media beat-up posse', just keep treading out the fearful lines that sell copies - hopefully this mess cleans out their 'boom-bust' short-term agenda and readers demand a longer-term outlook. I can only hope. Anyway...

My 2c on where we are at - time to hold you nerve. Business is shedding all its growth positions at the moment as these were based on a lie. US housing is starting to go sideways, PIMCO and co are investing in bond markets again (& shunning treasuries) and job cutting is half-way through the cycle.

The stages were set in stone a long-time ago (circa March 2007) -
1. banks needed to deleverage in reponse to over-valued assets; then
2. companies needed to deleverage due to credit stress and the impact on the real economy and earnings; and
3. households need to deleverage due to lower house prices and less income through the door.

By the time no 3 rolls around (next 3-6 months IMO), protagonists one and two will be looking beyond the gloom to the recovery. This is the time honoured economic and asset valuation cycle. The only difference this time is the lie that was the housing/treasury boom of the early 1980's (Reagonomics anyone?) to 2007 was bigger than any asset boom that preceded it. The bigger the lie, the bigger the correction. In that ways, asset prices obey the laws of physics. Blame Reagan, blame Greenspan, blame Kohler; nothing changes that steps 1-3 need to happen. But it will end. Amen.

Make of it as you wish. Writing this feels like pissing into a gale at the moment - the ubiquitious 'wall of worry'. But I am solvent and very optomistic about the next fifteen years (even if it means I am going to take some pain today and in the next six-months).

 

[explod]

Wise move, but I still think the totally negative thinking has played a huge part on what is happening now. Not all of it of course, but certainly a significant contribution.

A good headline out of Wall Street this morning re Thatcher/Reagonomics. It is thier deregulation of the so called free market that led us into this mess. The mantra was that, "the market players are basically honest and will regulate themselves"

In money no one can be trusted to be fair.

Proper regulation by some negative thinkers may be the answer required.,

 

[Knobby22]

The thing that annoys me the most is this obsession over the unwinding stage of the great valuation lie. This thread should be renamed 'unimaginable wealth creation followed by a logical return to long-term equlibrium'. Also the gawd awful Kohler's of this wold, the 'media beat-up posse', just keep treading out the fearful lines that sell copies - hopefully this mess cleans out their 'boom-bust' short-term agenda and readers demand a longer-term outlook. I can only hope. Anyway...

My 2c on where we are at - time to hold you nerve. Business is shedding all its growth positions at the moment as these were based on a lie. US housing is starting to go sideways, PIMCO and co are investing in bond markets again (& shunning treasuries) and job cutting is half-way through the cycle.

The stages were set in stone a long-time ago (circa March 2007) -
1. banks needed to deleverage in reponse to over-valued assets; then
2. companies needed to deleverage due to credit stress and the impact on the real economy and earnings; and
3. households need to deleverage due to lower house prices and less income through the door.

By the time no 3 rolls around (next 3-6 months IMO), protagonists one and two will be looking beyond the gloom to the recovery. This is the time honoured economic and asset valuation cycle. The only difference this time is the lie that was the housing/treasury boom of the early 1980's (Reagonomics anyone?) to 2007 was bigger than any asset boom that preceded it. The bigger the lie, the bigger the correction. In that ways, asset prices obey the laws of physics. Blame Reagan, blame Greenspan, blame Kohler; nothing changes that steps 1-3 need to happen. But it will end. Amen.

Make of it as you wish. Writing this feels like pissing into a gale at the moment - the ubiquitious 'wall of worry'. But I am solvent and very optomistic about the next fifteen years (even if it means I am going to take some pain today and in the next six-months).

Good points however I think 3 to 6 months is a bit optimistic, hope you are right.