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twofish
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March 2nd, 2009, 11:59 am

QuoteOriginally posted by: penguinaMy opinion is that this is not part of the normal economic cycle but part of a longer term cycle - I think this is one of those once a generation things and main surprises will be on the downside not the upside. I believe these are events of a magnitude outside of the experience of most people alive today and that people are going to be surprised about how quickly things will deteriorate further despite the already gloomy mood.One of the benefits with having relatives that have lived through truly bad stuff is that things like a decade-long depression just bothers you a lot less. People survived the Great Depression, and if there is another one, oh well, my luck is bad. In any case, one of the things that I do remember is the late-1970's when everyone said that the US economy was doomed, and this happened just before one of the greatest expansions in history.You can make guesses as to what is going to happen next, but overcertainty in outcomes will make you miss opportunities.
 
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penguina
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March 2nd, 2009, 12:22 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: penguinaI don't agree. Credit it at the heart of all that the financial sector does. All "money" is basically credit. When a commercial bank lends "money" it is creating credit. When a central bank expands its balance sheet to buy treasuries it is creating credit. In both cases the "money" is backed by the ability of the debtors to repay at some future date. That ability has been exhausted.So wave the magic wand and create new credit. If there is a huge amount of capacity in the world producing stuff that people want but can't afford then print lots of money so people can afford them.This would only work if the trade surplus nations are able to quickly turn around from producing products for the export market to producing products that their domestic market would want. After all, poor rural subsistence farmers are going to have little use or desire for iPods.One of the problems with this crisis is that many people seem to have great difficulty translating a crisis in the abstract world of finance to the real world of making stuff.
 
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penguina
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March 2nd, 2009, 12:28 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: penguinaMy opinion is that this is not part of the normal economic cycle but part of a longer term cycle - I think this is one of those once a generation things and main surprises will be on the downside not the upside. I believe these are events of a magnitude outside of the experience of most people alive today and that people are going to be surprised about how quickly things will deteriorate further despite the already gloomy mood.One of the benefits with having relatives that have lived through truly bad stuff is that things like a decade-long depression just bothers you a lot less. People survived the Great Depression, and if there is another one, oh well, my luck is bad. In any case, one of the things that I do remember is the late-1970's when everyone said that the US economy was doomed, and this happened just before one of the greatest expansions in history.You can make guesses as to what is going to happen next, but overcertainty in outcomes will make you miss opportunities.yes, but this greatest expansion in history was one based on a the biggest explosion in credit in history which then lead directly to this current crisis.It is not bad luck, it is the product of a corrupt and amoral political and financial elite that had gone completely out of control. Personally I am very angry at having my future stolen from me and so will the rest of the population once they understand what has been happening.
 
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twofish
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March 2nd, 2009, 1:49 pm

QuoteOriginally posted by: penguinayes, but this greatest expansion in history was one based on a the biggest explosion in credit in history which then lead directly to this current crisis.So we do it again, and then we have a few years to figure out how to make the next crash, not as bad.QuoteIt is not bad luck, it is the product of a corrupt and amoral political and financial elite that had gone completely out of control.As opposed to the the non-corrupt and moral political and financial elite that should be running things. Power inherently corrupts and makes people amoral. If you have a solution to the economic crisis that depends on powerful people being non-corrupt and moral for extended periods of time, then you are doomed.
 
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twofish
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March 2nd, 2009, 1:53 pm

QuoteOriginally posted by: penguinaThis would only work if the trade surplus nations are able to quickly turn around from producing products for the export market to producing products that their domestic market would want.Which is what I think is going to happen.QuoteAfter all, poor rural subsistence farmers are going to have little use or desire for iPods.Do you know any poor rural subsistence farmers? I know some rural cash farmers, and they all have cell phones, and if you can make it easy for iPods to snap up bootleg MP3's and cut the price, they'll snap them up.
 
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prasenjit0211
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March 2nd, 2009, 1:57 pm

The analysis goes as follows , the assumption is the person wants to work in finance and nothing else:1.) If you are an undergrad ( in a shitty job or jobless) , get enrolled in a 2 years masters program that gives you a scholarship.Then reassess the situation post graduation.If the market seems to be improving get a Job or else enroll in a PhD.2.)If you are a graduate student with a masters degree and without a Job, get a PhD.3.)If you want to change sectors into finance stay where you are and increase your finance knowledge through certification,books etc , after 2 years if market is not improving get a MBA/Masters.One thing is for sure there are going to be some fundamental changes in how finance operates.
 
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twofish
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March 2nd, 2009, 1:58 pm

legacy: Thanks for sharing your opinions. Another question is that if I have to settle with a lower profile function in finance, how difficult it will be to move to the prime roles when market picks up again ?Does it matter? If you have to settle for something, then you have to settle for something.Also, no one has any clue what the prime roles are in finance will be, so whether you are in good or bad shape if the market picks up will depend on if you can figure out what the prime roles are and position yourself before anyone else does.
 
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twofish
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March 2nd, 2009, 2:05 pm

QuoteOriginally posted by: prasenjit0211The analysis goes as follows , the assumption is the person wants to work in finance and nothing else:I think you need to start the analysis by asking *why* the person wants to work in finance and nothing else.
 
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penguina
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March 2nd, 2009, 2:06 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: penguinayes, but this greatest expansion in history was one based on a the biggest explosion in credit in history which then lead directly to this current crisis.So we do it again, and then we have a few years to figure out how to make the next crash, not as bad.QuoteIt is not bad luck, it is the product of a corrupt and amoral political and financial elite that had gone completely out of control.As opposed to the the non-corrupt and moral political and financial elite that should be running things. Power inherently corrupts and makes people amoral. If you have a solution to the economic crisis that depends on powerful people being non-corrupt and moral for extended periods of time, then you are doomed.do what again? another huge credit expansion?I always find this with certain people in finance - a complete disconnect with reality. There seems to be this bizarre inability to see cause and effect. The current depression is a direct result of the previous credit bubble. You can't have one without the other. The only way to prevent the next crash being so bad is to stop there being such a big bubble beforehand.The solution is to stop power and money being so concentrated in so few hands by a self-serving and corrupt political and financial elite.
Last edited by penguina on March 1st, 2009, 11:00 pm, edited 1 time in total.
 
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penguina
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March 2nd, 2009, 2:09 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: penguinaThis would only work if the trade surplus nations are able to quickly turn around from producing products for the export market to producing products that their domestic market would want.Which is what I think is going to happen.QuoteAfter all, poor rural subsistence farmers are going to have little use or desire for iPods.Do you know any poor rural subsistence farmers? I know some rural cash farmers, and they all have cell phones, and if you can make it easy for iPods to snap up bootleg MP3's and cut the price, they'll snap them up.oh god.It would take years to happen. Think of all the infrastructure required for consumer consumption in the US and Europe. That doesn't get built in a matter of months.Decoupling is a myth that has been busted.
 
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prasenjit0211
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March 2nd, 2009, 2:12 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: prasenjit0211The analysis goes as follows , the assumption is the person wants to work in finance and nothing else:I think you need to start the analysis by asking *why* the person wants to work in finance and nothing else.I am sure that for some people finance is a really a fascinating subject.
 
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twofish
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March 2nd, 2009, 3:57 pm

QuoteOriginally posted by: penguinado what again? another huge credit expansion?Yes. Followed by a bust, followed by a boom, followed by a bust. The important thing is to moderate the booms and busts so that they don't destroy the world economy.QuoteThe current depression is a direct result of the previous credit bubble. You can't have one without the other.Winter storms follow hot summers but it doesn't mean that one causes the other, and a world in which everything falls apart everything few years is preferable to one that stays in constant misery. If you massively expand credit, get us out of the mess in two years, have another boom that lasts for six or seven years, and then another crash. Repeat.QuoteThe only way to prevent the next crash being so bad is to stop there being such a big bubble beforehand.Which I don't think is possible. We've had business cycles since the 18th century.QuoteThe solution is to stop power and money being so concentrated in so few hands by a self-serving and corrupt political and financial elite.Power and money tends to concentrate. You can and should every now and then redistribute power and money, but it will concentrate again.
 
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twofish
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March 2nd, 2009, 4:10 pm

QuoteOriginally posted by: penguinaIt would take years to happen. Think of all the infrastructure required for consumer consumption in the US and Europe. That doesn't get built in a matter of months.If you got large amounts of cash and 200 million idle workers, you can get things done pretty quickly.
 
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penguina
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March 2nd, 2009, 4:12 pm

Look this is not part of the normal business cycle we have every 10-15 years or so.This is a once in a lifetime depression as a result of the largest credit bubble in history.Revolutions tends to happen after events of this magnitude. Civilisations can and do collapse.When is this going to get through your thick skull?
Last edited by penguina on March 1st, 2009, 11:00 pm, edited 1 time in total.
 
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penguina
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March 2nd, 2009, 4:21 pm

here, educate yourself and look at the graphs in this articlehttp://www.ft.com/cms/s/0/b048d69c-ec90-11dd-a ... c.htmlcome back when you have something intelligent to say rather than tired old cliches about power and corruption.
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