Wall Street Disaster

[shochu]

a mainstream concept of deflation - that everyone waits to purchase something assuming that the price will decline. why is it that we believe such thought? because we hear it enough - ah yes - that - yes - say it enough and people believe it. sorry - but wrong - or shall i say a distorted or perhaps better for you to understand - a very simplified concept but still not accurate in the end.

please think about it a little. it is quite easy if you discard the repetition of thought.

have you ever waited to buy something EXPECTING it to get cheaper?

it is really a numbers game. think outside the circle.

[Jingthing]

have you ever waited to buy something EXPECTING it to get cheaper?

Of course!

[shochu]

i expected as much coming from you

-PLEASE READ BETWEEN THE LINES!-

[Jingthing]

i expected as much coming from you

-PLEASE READ BETWEEN THE LINES!-

Sorry, I am not a Zen master nor do I read tea leaves. Please spell out what you mean in plain English. I answered your question.

Edited November 22, 2008 by Jingthing

[JimsKnight]

For me these times are not a celebration, more of a realised observation.

Things area cheaper in some ways, but the lack of work also hits too so its a different era we're entering now somewhat.

[shochu]

although i do not want to because it will only detract from and thus mislead from the true path - i should qualify my statement above by saying - not things that are bubbled up! talking about basics here. we think a certain way only because it is convenient and expected. it makes sense although it does not really address the situation. we are focusing on something that is a byproduct - but not the cause, or should i say the reason and thus the problem. please think of how the system works and numbers!

jing,

i do not think i can be any clearer in meaning - i think you understand well enough - perhaps you just do not want to accept/acknowledge it, or you just want me to do as i expected you to - sorry!!

[Jingthing]

I think I just entered the twilight zone.

[torrenova]

I think I just entered the twilight zone.

You mean the twiglet zone ?

I'll get my coat.

[OriginalPoster]

a mainstream concept of deflation - that everyone waits to purchase something assuming that the price will decline. why is it that we believe such thought? because we hear it enough - ah yes - that - yes - say it enough and people believe it. sorry - but wrong - or shall i say a distorted or perhaps better for you to understand - a very simplified concept but still not accurate in the end.

please think about it a little. it is quite easy if you discard the repetition of thought.

have you ever waited to buy something EXPECTING it to get cheaper?

it is really a numbers game. think outside the circle.

Please describe a plausible scenario whereby sustained deflation would not be damaging to the overall economy.

To answer your question though, the phenomena of consumers postponing buying until prices come down has long been common with consumer electronics purchases.

Edited November 23, 2008 by OriginalPoster

[BEENTHEREDONETHAT]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Okay, let's just say for the sake of argument that everyone's savings (being current or retirement) has been cut in half. But if the cost of goods has lowered by half, gas is but maybe not all things so for the sake of argument let's say they are, then what's so bad? The only thing I could see is with the retirement savings cut in half and then prices of goods rise before retirement comes. (But hey isn't that going to happen anyway?)

For particular individuals it might not be so bad. The problem with deflation is that if the public expects prices to fall, they will postpone purchasing discretionary items, which in turn reduces demand, which in turn causes price to continue to fall, which in turn further encourages consumers to delay purchases until prices fall further -- all of which together can create a downward spiral.

Which in turn causes more stores, manufactures and services to close and/or lay off more people, which in turn means less money to spend and reduces the demand even more. Deflation is a vicious circle that is very difficult to stop.

[dingdongrb]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Okay, let's just say for the sake of argument that everyone's savings (being current or retirement) has been cut in half. But if the cost of goods has lowered by half, gas is but maybe not all things so for the sake of argument let's say they are, then what's so bad? The only thing I could see is with the retirement savings cut in half and then prices of goods rise before retirement comes. (But hey isn't that going to happen anyway?)

For particular individuals it might not be so bad. The problem with deflation is that if the public expects prices to fall, they will postpone purchasing discretionary items, which in turn reduces demand, which in turn causes price to continue to fall, which in turn further encourages consumers to delay purchases until prices fall further -- all of which together can create a downward spiral.

Isn't that what everyone's doing now with the stock market, waiting for it to bottom out before buying?

[OriginalPoster]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Okay, let's just say for the sake of argument that everyone's savings (being current or retirement) has been cut in half. But if the cost of goods has lowered by half, gas is but maybe not all things so for the sake of argument let's say they are, then what's so bad? The only thing I could see is with the retirement savings cut in half and then prices of goods rise before retirement comes. (But hey isn't that going to happen anyway?)

For particular individuals it might not be so bad. The problem with deflation is that if the public expects prices to fall, they will postpone purchasing discretionary items, which in turn reduces demand, which in turn causes price to continue to fall, which in turn further encourages consumers to delay purchases until prices fall further -- all of which together can create a downward spiral.

Isn't that what everyone's doing now with the stock market, waiting for it to bottom out before buying?

Your point being?

[dingdongrb]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Okay, let's just say for the sake of argument that everyone's savings (being current or retirement) has been cut in half. But if the cost of goods has lowered by half, gas is but maybe not all things so for the sake of argument let's say they are, then what's so bad? The only thing I could see is with the retirement savings cut in half and then prices of goods rise before retirement comes. (But hey isn't that going to happen anyway?)

For particular individuals it might not be so bad. The problem with deflation is that if the public expects prices to fall, they will postpone purchasing discretionary items, which in turn reduces demand, which in turn causes price to continue to fall, which in turn further encourages consumers to delay purchases until prices fall further -- all of which together can create a downward spiral.

Isn't that what everyone's doing now with the stock market, waiting for it to bottom out before buying?

Your point being?

Creating that 'downward spiral' you had mentioned about consumer spending.....

[Kf6vci]

Well, those who buy might be catching falling knives. Take Citibank below 4. Or UBS below 10. Or even Deutsche Bank.

IMHO, the old "you cannot time the market" philosophy is wrong now. Stock picking is my solution. 'There are some really nice REITs out there with incredible dividend yield and book values.

There is often an overreaction. Take mortgages. Some are 100% agency papers, guaranteed by the USA. NLY Or non agency = CIM with people freaking out about the latter.

Personally, I doubt that any central bank or any government can prevent this being a very long and painful period. Take unemployment. And oil won't stay below 50 in the long term.

There is another post about the Baht. I see it as overvalued.

The one thing clear is: This crisis is global

[shochu]

i was hoping you guys would see it from a different angle/interpretation - which would then make you see some other things and then eventually you would be able to start putting more things together and viola - then you would know what is REALLY happening and then would be able to make plans. interpretation being the magic word.

oh well - just continue to see your money/investment/etc. lose value

just a wee question - NOT when there is a credit contraction and stores slash/reduce prices to offload - HAVE A SALE - oh gee - can that be called deflation too - BUT - only when there is a recession BUT not when it is just getting rid of stock from an end of season sale or last years items to make way for new stock?

also, when prices drop along with the value of purchasing power - is that also called deflation? lets remember, i have stated i am not discussing bubbled items - so lets talk everyday items here. will you wait a few weeks for that gallon of milk to drop in price, or wait a few weeks to use the car hoping the gas price drops??

guys - please re-read what i have written above!!!

[OriginalPoster]

i was hoping you guys would see it from a different angle/interpretation - which would then make you see some other things and then eventually you would be able to start putting more things together and viola - then you would know what is REALLY happening and then would be able to make plans. interpretation being the magic word.

oh well - just continue to see your money/investment/etc. lose value

just a wee question - NOT when there is a credit contraction and stores slash/reduce prices to offload - HAVE A SALE - oh gee - can that be called deflation too - BUT - only when there is a recession BUT not when it is just getting rid of stock from an end of season sale or last years items to make way for new stock?

also, when prices drop along with the value of purchasing power - is that also called deflation? lets remember, i have stated i am not discussing bubbled items - so lets talk everyday items here. will you wait a few weeks for that gallon of milk to drop in price, or wait a few weeks to use the car hoping the gas price drops??

guys - please re-read what i have written above!!!

Your writing is incoherent, that might be part of the reason that people aren't grasping the point that you are trying to make.

[shochu]

its pretty plain and simple and clear and in english - perhaps you just do not have the faculty to grasp the subject matter as it requires thinking ouside of the cirlce or box if that makes you feel better.

i'm actually asking YOU do do something as opposed YOU just reading and commenting as YOU have been!

[OriginalPoster]

its pretty plain and simple and clear and in english - perhaps you just do not have the faculty to grasp the subject matter as it requires thinking ouside of the cirlce or box if that makes you feel better.

i'm actually asking YOU do do something as opposed YOU just reading and commenting as YOU have been!

Think outside the box -- got it, thanks for the tip.

[Jingthing]

Milk and gas if you need milk and gas is a non-discretionary EXPENSE, not something you have a CHOICE to wait for a price change if you NEED it now. Shochu, the purpose of writing is to COMMUNICATE your point. You have not done so, even though it is clear you think you are some kind of cryptic genius who holds the keep to the universe, if you only look deeper into the BLACK HOLE.

OK, I have enjoyed reading Zen koans in the past and they do challenge your "thinking" or "non-thinking" more like it, but I don't see the purpose here, just say what you mean. Or alternatively, if there is someone on the wavelength of our resident guru, perhaps you can please translate into this queen's English.

Edited November 23, 2008 by Jingthing

[shochu]

if you can not muster the energy to even try then too bad. nothing in life is free.

NO i am not talking discretionary items as i have stated SO why do you bring it up. perhaps i am asking you to not consider it because it will be easier to comprehend. have you ever thought that the term deflation is a very convenient and extremely simplified term, AND what i am asking YOU to do is to see the much larger ramifications behind the condition.

you also seem to have missed the point of my queries - all semantics or just a different perspective.

the purpose of writing is to COMMUNICATE your point

according to what you want

Edited November 23, 2008 by shochu

[dingdongrb]

Milk and gas if you need milk and gas is a non-discretionary EXPENSE, not something you have a CHOICE to wait for a price change if you NEED it now. Shochu, the purpose of writing is to COMMUNICATE your point. You have not done so, even though it is clear you think you are some kind of cryptic genius who holds the keep to the universe, if you only look deeper into the BLACK HOLE.

OK, I have enjoyed reading Zen koans in the past and they do challenge your "thinking" or "non-thinking" more like it, but I don't see the purpose here, just say what you mean. Or alternatively, if there is someone on the wavelength of our resident guru, perhaps you can please translate into this queen's English.

Sorry Jing, even though I do consider myself educated and above average when it come to 'smarts' (aka, intelligence) I cannot for the life of me figure out what he is try to say as well............ Now where did I place my 'secret decoder ring'....hmmmmmmmm

[Jingthing]

Shochu, you are very funny. One could interpret your foggy writing anyway they please. So you will ALWAYS be right. If one of your followers took your counsel and it didn't work out, you could merely say that they didn't work hard enough to distill the true meaning. You should really charge money for this. Some people really go for this new age crapola.

BTW, I acknowledge maybe I am just dense and not one of the special enlightened ones who can interpret the great one's ramblings. Since the author isn't willing to clarify, can you? Then maybe he will tap his keyboard one time if you are hot, two times if not hot.

Edited November 23, 2008 by Jingthing

[shochu]

rather than getting in a pissing contest - if you are not interested in trying - why bother responding.

all i did was raise a point for those who were interested in furthering their queries. i was merely trying to point out that what one sees is not really descriptive of what is actually happening - or more aptly will happen.

you obviously - for whatever reasons - choose to try to rationalize your lack of comprehension by making a comment that makes you feel better - good for you - i hope you do feel better.

AND life goes on...

[Jingthing]

i was merely trying to point out that what one sees is not really descriptive of what is actually happening - or more aptly will happen.

OK, that is a bit more clear. Was that SO HARD for you?

[lannarebirth]

Let's have some fun with this. Who can predict the bottom? I say it is 7450 on the Dow Jones.

This has hit me big time. What a drag.

Reviving this thread about PREDICTING the bottom of the stock market crash.

As you can see I predicted 7450. Well it closed in the 7500's yesterday, a five year low. Will this be the bottom?

Anyway Jingthing, nice job. Hope it holds for you.

[Bisto]

although i do not want to because it will only detract from and thus mislead from the true path - i should qualify my statement above by saying - not things that are bubbled up! talking about basics here. we think a certain way only because it is convenient and expected. it makes sense although it does not really address the situation. we are focusing on something that is a byproduct - but not the cause, or should i say the reason and thus the problem. please think of how the system works and numbers!

jing,

i do not think i can be any clearer in meaning - i think you understand well enough - perhaps you just do not want to accept/acknowledge it, or you just want me to do as i expected you to - sorry!!

i was hoping you guys would see it from a different angle/interpretation - which would then make you see some other things and then eventually you would be able to start putting more things together and viola - then you would know what is REALLY happening and then would be able to make plans. interpretation being the magic word.

oh well - just continue to see your money/investment/etc. lose value

just a wee question - NOT when there is a credit contraction and stores slash/reduce prices to offload - HAVE A SALE - oh gee - can that be called deflation too - BUT - only when there is a recession BUT not when it is just getting rid of stock from an end of season sale or last years items to make way for new stock?

also, when prices drop along with the value of purchasing power - is that also called deflation? lets remember, i have stated i am not discussing bubbled items - so lets talk everyday items here. will you wait a few weeks for that gallon of milk to drop in price, or wait a few weeks to use the car hoping the gas price drops??

guys - please re-read what i have written above!!!

its pretty plain and simple and clear and in english - perhaps you just do not have the faculty to grasp the subject matter as it requires thinking ouside of the cirlce or box if that makes you feel better.

i'm actually asking YOU do do something as opposed YOU just reading and commenting as YOU have been!

if you can not muster the energy to even try then too bad. nothing in life is free.

NO i am not talking discretionary items as i have stated SO why do you bring it up. perhaps i am asking you to not consider it because it will be easier to comprehend. have you ever thought that the term deflation is a very convenient and extremely simplified term, AND what i am asking YOU to do is to see the much larger ramifications behind the condition.

you also seem to have missed the point of my queries - all semantics or just a different perspective.

the purpose of writing is to COMMUNICATE your point

according to what you want

Shochu, you are very funny. One could interpret your foggy writing anyway they please. So you will ALWAYS be right. If one of your followers took your counsel and it didn't work out, you could merely say that they didn't work hard enough to distill the true meaning. You should really charge money for this. Some people really go for this new age crapola.

BTW, I acknowledge maybe I am just dense and not one of the special enlightened ones who can interpret the great one's ramblings. Since the author isn't willing to clarify, can you? Then maybe he will tap his keyboard one time if you are hot, two times if not hot.

rather than getting in a pissing contest - if you are not interested in trying - why bother responding.

all i did was raise a point for those who were interested in furthering their queries. i was merely trying to point out that what one sees is not really descriptive of what is actually happening - or more aptly will happen.

you obviously - for whatever reasons - choose to try to rationalize your lack of comprehension by making a comment that makes you feel better - good for you - i hope you do feel better.

AND life goes on...

[/quote

I get it there is a conspiracy going on behind the scenes

[flying]

I am sticking with my mid 7000's low prediction. Doesn't cost me a penny to say so, so why not?

I think the day will come when we look back at 7000 on the dow as those were the good days.

[Hairy]

For particular individuals it might not be so bad. The problem with deflation is that if the public expects prices to fall, they will postpone purchasing discretionary items, which in turn reduces demand, which in turn causes price to continue to fall, which in turn further encourages consumers to delay purchases until prices fall further -- all of which together can create a downward spiral.

Which in turn causes more stores, manufactures and services to close and/or lay off more people, which in turn means less money to spend and reduces the demand even more. Deflation is a vicious circle that is very difficult to stop.

You know what, guys, back in the 1800s, that was how the world worked, and it was a GOOD THING. If you saved a dollar at age 20, then by the time you were too old and sick to work any more at age 50, you could support yourself.

Nowadays, you save a buck at age 20, and by the time you're 65, the government has so thoroughly fuc_ked up your savings (double taxation of dividends, federal mandates that banks lend to uncreditworthy people, government-enforced "labor relations" that ruin entire industries such as the automakers) that you're stuck going on a welfare program. I'd throw in the usual nonsense about seniors buying cat food with their social security checks, but cat food is actually more expensive, pound for pound, than human food, so let's just say that you're stuck living in poverty unless you're one of the fortunate (or adventurous) few who can bugger off to Thailand and flaunt your genitals at the politicians back home.

Supposedly, people were able to "invest" their early-years savings in Wall Street shenanigans, but the last decade or so has proved that that's a problematic model, as Wall Street has blown one bubble after another and transferred the money into its own pockets. Martha Stewart, Jeff Bezos, and the other billionaires learned that the easiest way to make money is to start a stock-fraud company, con people into dumping their pension savings into it, and then screw over the little people.

Oh well. Don't mind me, I'm just cranky 'cause it's 4am and the feds are trying to pour another US$2,000,000,000,000 of taxpayer money down the Citibank shithole, bailing out yet more worthless bastards.

[flying]

Nowadays, you save a buck at age 20, and by the time you're 65, the government has so thoroughly fuc_ked up your savings (double taxation of dividends, federal mandates that banks lend to uncreditworthy people, government-enforced "labor relations" that ruin entire industries such as the automakers) that you're stuck going on a welfare program.

Oh well. Don't mind me, I'm just cranky 'cause it's 4am and the feds are trying to pour another US$2,000,000,000,000 of taxpayer money down the Citibank shithole, bailing out yet more worthless bastards.

Word !!

I feel like that movie? Network?

Where we should yell out the windows......I AM MAD AS hel_l & I'M NOT GOING TO TAKE THIS ANYMORE

[AlexLah]

So what are you going to do na?

Go out on the streets and join the protest?

You would be a real patriot if you did.

Dow will go down to 4-5000 1Q or 2Q next year.