DEPRESSION ? acts, walks, looks and smells like it's moving closer to home.greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Remember, all and every single one of them was followed by record numbers in prosperity. Equities and real estate have both moved up together. This is the greatest single problem with this lastest expansion. Both assets above will be sold possibly in panic order and this will creat the massive dominos over leveraged with debt to come tumbling down in quick order. Count on it, by this time next year it will be mass selling unless we get some heavy selling this quarter. With elections coming. the real panic will be in 2001.
-- redman (email@example.com), January 05, 2000
I think that Redman is going to your head. Do a little research before you trip over yourself in public. The doom and gloom has passed, pal, and you can come out of the bunker.
-- Bad Company (firstname.lastname@example.org), January 05, 2000.
or 2002 or 2003 or 2004 or 2005 or......................
-- (email@example.com), January 05, 2000.
Thank you Nastra and Bad company. I think I'll buy some more of that shiney yellow stuff and unload it on you in 3 years. This is exactly what I was searching for. More complacent clowns fixed on the new era. Thank you and thanks again.
-- redman (firstname.lastname@example.org), January 05, 2000.
I suggest "Freedom from Fear" as a good primer on the Great Depression. As far for you economic analysis about equities and real estate moving up "together," the definition of inflation is the general increase in prices. In the equities markets, we do have a speculative bubble, but far less so in real estate (though real estate prices may be influenced by the "wealth effect.")
As for your rather pithy analysis, it is presupposed on a massive sell-off of BOTH equities and real estate. Even if we do see a massive correction in the market, the linkage between a stock market correction and a depression is tenuous at best. (See October 1987.)
In real estate, a significant "correction" is less likely, particularly given inflation issues. There are areas where you can argue real estate is "overvalued," but everyone needs a place to live... before and after a market drop. You can make some interesting observations about personal debt levels, but I'll let you do the research and draw your own conclusions.
A more supportable analysis is increasing inflation, a series of interest rate hikes by the Federal Reserve, a significant increase in the cost of debt, a slowdown in housing starts and a tip into a recession accompanied by a bear market and flat housing prices.
-- Ken Decker (email@example.com), January 06, 2000.
You just described my "best case" expectation for Y2K.
Seems to be about a "4" on the DCY2K impact scale.
-- Bill P (firstname.lastname@example.org), January 06, 2000.