Wednesday, November 19, 2008

Calculating Risk has an interesting graph comparing stock market crashes

I look at the graph to the left and actually feel better about the market situation we are in. That is, until I think of all the other situations "around" the market crash.

You see, I was around for all those other crashes....and I remember a lot of angst about the market fall...but there were still plenty of positive things happening in the economy.

Yes....some bad stuff for sure....during 2001, there was the tech bubble, and Sept 11th.....all very bad...but many industries were fine, and the jobs of many were untouched.

Now....everything seems to be imploding, and EVERYONE is paying the piper as the government "spends our way out" of this mess as it "inflates" the battered credit markets......putting us even further into debt.

What a mess.....but as far as the market "fingerprint" isn't any worst. (NOT)

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Tuesday, November 18, 2008

Do we have a "new" bubble?

I might be a looking at things a big sideways.....but back when we were talking about "hard landing" vs "soft landing" for our economy....I always felt that talk was "code" meaning not whether or NOT we would crash....but whether we would do so with a thud.

Well, as I look back I feel we probably should have seen a "landing" of sorts perhaps in the 80's for this is when the us started down our slow slide of personal savings decline....and when our government debt began to climb. I think we were essentially cashing in our "wealth" for short term "bling".

We went from just not saving to creating a debt bubble around our homes now known as the housing bubble. Once again, we traded away long term value in our homes for quick cash....taking out home equity loans and mortgaging new homes to the max.

Now I see our economy stalled....and how do we try to "prop it up"? Well, our government is cranking up the printing press and handing out dollars to failing companies "too big to fail".

Well....I wonder if that isn't some form of "bubble" mentality working again where we basically bubble up the amount of money in circulation until someone notices and decides the dollar is valueless.

I think we will see the crash of the Dollar should the world move away from supporting the US debt and begins using some other currency we the standard for value.

Woe is the USA when that happens.....hello hyperinflation!

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