Credit Crunch Part Deux One Year On
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Hard to believe that TJ's orginal thread is still going strong after one year. At this point since their is no end in site and the thread is still active I thought I'd start a new one. At over 500 posts it can be a little much to try and catch up on. I came in about 400 or so posts.
Be neither a Bull nor a Bear:
To me the most interesting part has been the reaction of people. When it first started the bulls were "it's a minor hick up on the way to greater glory", the bears, "it's the beginning of the end, prepare for the worse, buy gold and head for the hills". Neither were totally correct. Just look at oil, as it hit new highs people started talking about $250 barrel of oil. Then suddenly the price collapsed (only a short term thing in my opinion)
Massive Liquidity:
I've been reading Garth Turners book/blog Greater Fool (of interest to Canadians only) about the housing market in Canada and he says the whole thing was caused by massive liquidity in the money markets and that will cause a US style housing bust in Canada (I disagree to a degree) and lead to stagflation again. And again the central bankers are banking on putting more liquidity into the system in spite of inflation risks.
Which brings me to my question, and why I started a new thread, what's your take on this TJ. Short lived recession or a return to stagflation with sky high interest rates and a 2 decade long Japan style crash, a short rough recession, with longer term lower growth and slightly higher inflation.
Personally I've been torn, with the US looking at trillion dollar plus deficits, a president who is committed to higher taxes, sky high oil prices etc we looking at a long nasty recession. On the other hand coming out of an era of low inflation and high growth and with Central Bankers committed to growth at all costs we'll see lower growth and higher interest rates but nothing like the 70s. Which I happen to remember, 1984 my Dad gave me a Canada Savings Bond as a wedding gift, interest rate 16% which I foolishly sold right after the honeymoon to buy a car. Oh to be young and foolish again  As to the US market specifically John Templeton said, sell when people are most optimistic and buy when people are most pessimistic. Some people say based on that, the market has reached the bottom but I'm not convinced, I think at best the Dow will go sideways, at worse it's a false bottom. I'm leaning towards the latter.
Looking forward to another 500 posts
For those of you who follow it, FT has done a large series on the Credit Crunch one year on: www.ft.com/bigfreezeThis message was last edited by Rob in Madrid on 8/8/2008.
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Decided after all I don't like Spanish TV, that is having compared both.
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Hi Rob, just an observation here.
I just wondered why, when members will continue to add to part one, you've started part two.
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yeah I was wondering about that myself, hindsight is 20/20 just asked that very question over at the other thread.
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Decided after all I don't like Spanish TV, that is having compared both.
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If you wondering where the US (and by extension the worlds) economy is going check it this page
Forever Young
www.motherjones.com/news/exhibit/2008/07/exhibit-forever-young.html
Check out the health care graphs and remember 78 million or about 1/3 of Americans are set to retire in the next few years. Can anyone say "START THE PRINTING PRESSES"
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Decided after all I don't like Spanish TV, that is having compared both.
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