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penguina
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March 2nd, 2009, 4:31 pm

QuoteOriginally posted by: twofishWinter 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.The malinventment happens during the boom and the bust is when this becomes apparent. The bigger the bubble, the worse the malinvestment and more painful the bust. Is this too difficult to understand or do you need it spelt out in words of one syllable so you can get it?Bloody hell. No wonder the financials are all insolvent when their employees don't even understand elementary concepts.
 
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twofish
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March 2nd, 2009, 4:38 pm

QuoteOriginally posted by: penguinaThe malinventment happens during the boom and the bust is when this becomes apparent. The bigger the bubble, the worse the malinvestment and more painful the bust. Is this too difficult to understand or do you need it spelt out in words of one syllable so you can get it?Bloody hell. No wonder the financials are all insolvent when their employees don't even understand elementary concepts.I've read Von Mises, and I understand the Austrian theory of credit. I just don't agree with it, because it doesn't explain what is going on. The problem with the theory is that it doesn't explain what you end up with tremendous misallocations and underproduction once the bust is under way. It also provides no useful guides to figure out how to fix the malinvestment and reduce the period of adjustment.Do you think that that it is a rational allocation of resources that everyone is now buying Treasuries? I don't, and the fact that everyone is now buying treasuries and the interest rates are low is something that just doesn't fit in with the Austrian view of the business cycle.
 
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twofish
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March 2nd, 2009, 4:47 pm

QuoteOriginally posted by: penguinaLook 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.Will know that this is true in about a year....QuoteRevolutions tends to happen after events of this magnitude. Civilisations can and do collapse. When is this going to get through your thick skull?When it becomes relevant. Look, if we are all doomed, then we are all doomed and nothing that I'm doing matters. My operating assumption is that we are not doomed. It's not that I believe that we aren't doomed. I don't know. The reason this is my operating assumption is that if think that we are not doomed when we are, then nothing bad happens. If the entire world economy is going to implode, then doing what I'm doing isn't going to make it that much worse.On the other hand, if it turns out that I'm wrong and I think that we are doomed when we aren't, then the decisions I end up making are horrifically bad onesIt's Pascal's wager, and it has to do with my personality. I'm a fighter, and when I'm faced with the prospect of doom and gloom, I fight harder, because 1) it keeps me busy and 2) when I do take my last breath, and least I'll know that I tried to do everything I could. Sure it could be a total waste of time, but it's not as if I have anything better to do.
 
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DominicConnor
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March 2nd, 2009, 5:28 pm

The market ain't great, but as the photo of me shows, I'm old, or to be more precise over 35 and with a stable personal financial position.That combines with the stuff I hear as a HH to give a different picture to the "Nightmare on Wall Street" the media, especially Bloomberg are pushing.We've had an unusually long time between tier 1 screwups, which inevitably means that the terms in the economy that are mean reverting are pulling down harder than in previous recessions.Obvious examples of MR terms are things like the amount of borrowing necessary to create a $ of GDP growth which has reached a historical high in pretty much all countries. Wages have been growing faster than their long term means, and in the specific case of quants, the growth rate in this type of employment implied that within 30 years every worker in the industrialised world would be a quant....So mean reversion was going to happen ,and it is the nature of economics that overshoot is inevitable.When people say "like the depression" this gives the impression of mass unemployment and people straving on the streets of London and New York.Actually a "worst case scenario" of negative 5% growth in all developed countries for two years takes us back the "poverty" of about 1998.We are at the centre of this, and since quanting is a young profession, most of you have never seen a real recession before, so I guess it looks scary.The media types are adding to this because they are hurting at least as bad as banking. Changes in technology have combined with a decline in ad spend to hit them bad...Some people reading this will no dount end up in some other line of work, and few of us will enjoy the next two years, but at P&D we've been doing a major review of our database, hiring people to help out on that, amking us possibly the only recruitment firm to increase headcount in the last 12 months What we see is a much lower rate of unemployment amongst experienced quants than you'd expect, between 6 and 7%. That's about the highest it has ever been, and I guess it might drift higher, but is not an apocalypse.It's tougher for newbies looking for their first job, and we're working on things to help out here, which we hope to be more public about soon.
 
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penguina
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March 2nd, 2009, 7:49 pm

THIS IS NOT A BLOODY RECESSION IT IS A DEPRESSIONLook at the fundamentals for fucks sake - look at the Martin Wolf article I linked below.two years into this crisis and most people here still don't get it.God help us. does this look like a recession to you: http://4.bp.blogspot.com/_pMscxxELHEg/S ... 09.jpgWake the fuck up
Last edited by penguina on March 1st, 2009, 11:00 pm, edited 1 time in total.
 
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quantyst
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March 2nd, 2009, 7:58 pm

QuoteOriginally posted by: penguinaTHIS IS NOT A BLOODY RECESSION IT IS A DEPRESSIONLook at the fundamentals for fucks sake - look at the Martin Wolf article I linked below.two years into this crisis and most people here still don't get it.God help us.What are you doing with your life now?Pointing people to the awful reality of a bad situation is a useful thing to do.But what to do with the information gained is not obvious to all.So, my question:What are you doing with your life now?
 
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penguina
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March 2nd, 2009, 8:03 pm

QuoteOriginally posted by: quantystQuoteOriginally posted by: penguinaTHIS IS NOT A BLOODY RECESSION IT IS A DEPRESSIONLook at the fundamentals for fucks sake - look at the Martin Wolf article I linked below.two years into this crisis and most people here still don't get it.God help us.What are you doing with your life now?Pointing people to the awful reality of a bad situation is a useful thing to do.But what to do with the information gained is not obvious to all.So, my question:What are you doing with your life now?I'm a physicist and I'm planning to stay a physicist as long as possible.At one point I considered finance but then I realized it was all bullshit producing nothing of real value.I then discovered that my future had been stolen by the fuckwit politicians and banksters. I have never been so angry and depressed in my life.
 
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twofish
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March 2nd, 2009, 8:40 pm

QuoteOriginally posted by: penguinaTHIS IS NOT A BLOODY RECESSION IT IS A DEPRESSIONWrong. It may be a depression in a few months, but right now it's still a recession. The thing about most people under 30 is that they've never lived through a real recession. I'm old enough so that I have some vague memories of the 1979-82 recession and the 1974-1975 recession. For that matter, I remember the 1970's. When unemployment hits 15% and the SP goes down 80% from peak, I'll call depression, but its not that bad yet, and I'm doing my small part to keep it from getting that bad.QuoteTwo years into this crisis and most people here still don't get it.It's because a lot of people have seen a lot worse than what has happened so far. The big thing is that the banks are still operating, which is the big thing that separates 2008 from 1929. In 1930, you had massive bank failures, but so far no one has lost a cent from any FDIC insured account. The sky may fall, but it hasn't collapsed yet. That's one of the nice things about reading history, as bad as things are, you find people living through much, much worse.
 
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quantyst
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March 2nd, 2009, 8:48 pm

To make the question more complete:What are you doing with your life now given your statement that "THIS IS NOT A BLOODY RECESSION IT IS A DEPRESSION"?
 
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penguina
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March 2nd, 2009, 8:49 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: penguinaTHIS IS NOT A BLOODY RECESSION IT IS A DEPRESSIONWrong. It may be a depression in a few months, but right now it's still a recession. The thing about most people under 30 is that they've never lived through a real recession. I'm old enough so that I have some vague memories of the 1979-82 recession and the 1974-1975 recession. For that matter, I remember the 1970's. When unemployment hits 15% and the SP goes down 80% from peak, I'll call depression, but its not that bad yet, and I'm doing my small part to keep it from getting that bad.QuoteTwo years into this crisis and most people here still don't get it.It's because a lot of people have seen a lot worse than what has happened so far. The big thing is that the banks are still operating, which is the big thing that separates 2008 from 1929. In 1930, you had massive bank failures, but so far no one has lost a cent from any FDIC insured account. The sky may fall, but it hasn't collapsed yet. That's one of the nice things about reading history, as bad as things are, you find people living through much, much worse."So far so good," says the man falling from the 50th floor.I'm not interested in what is happening now but in what is coming - that is what my brain is for. Everywhere you look indicators are falling at rates never seen before:http://finance.yahoo.com/news/Gartner-P ... YMeanwhile we are accumulating several world war's worth of Government debt in order to thrown money down the financial black hole.The massive unemployment, riots and civil breakdown is coming. Don't you worry about that.
 
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penguina
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March 2nd, 2009, 9:01 pm

QuoteOriginally posted by: quantystTo make the question more complete:What are you doing with your life now given your statement that "THIS IS NOT A BLOODY RECESSION IT IS A DEPRESSION"?Saving money, spending less, explaining to everyone I know what is happening and working very hard at work to ensure I have a job when the inevitable cuts come.Previously I was buying index put options before the the first wave of the crash last year. Most of my friends though I was mad but not so much now.
 
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twofish
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March 2nd, 2009, 9:13 pm

QuoteOriginally posted by: penguina"So far so good," says the man falling from the 50th floor.So start flapping your arms as hard as you can, and try to make a parachute out of your shirt. Once you hit bottom, then see what's broken and start pulling yourself together.QuoteI'm not interested in what is happening now but in what is coming - that is what my brain is for.What comes next depends on what people do now. One of the things that I like about my job is that I see that I can in some small way make what is coming up better or worse.QuoteMeanwhile we are accumulating several world war's worth of Government debt in order to thrown money down the financial black hole.And the reason for that is having a World War is how we got out of the last depression. Worth a shot to see if it works.
 
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penguina
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March 2nd, 2009, 9:19 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: penguina"So far so good," says the man falling from the 50th floor.So start flapping your arms as hard as you can, and try to make a parachute out of your shirt. Once you hit bottom, then see what's broken and start pulling yourself together.QuoteI'm not interested in what is happening now but in what is coming - that is what my brain is for.What comes next depends on what people do now. One of the things that I like about my job is that I see that I can in some small way make what is coming up better or worse.QuoteMeanwhile we are accumulating several world war's worth of Government debt in order to thrown money down the financial black hole.And the reason for that is having a World War is how we got out of the last depression. Worth a shot to see if it works.By the time WW II came along the economy had already spent 10 years deleveraging.We haven't even had the deleveraging yet in order to start reinflating.
 
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jomni
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March 3rd, 2009, 12:07 am

QuoteEverywhere you look indicators are falling at rates never seen before:contrarians would think of this as a bullish signal.but have to wait as eveyone's not as cynnical as penguina at the moment. cheers!
 
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Traden4Alpha
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March 3rd, 2009, 12:43 am

QuoteOriginally posted by: penguina"So far so good," says the man falling from the 50th floor.I'm not interested in what is happening now but in what is coming - that is what my brain is for. Everywhere you look indicators are falling at rates never seen before:http://finance.yahoo.com/news/Gartner-P ... YMeanwhile we are accumulating several world war's worth of Government debt in order to thrown money down the financial black hole.The massive unemployment, riots and civil breakdown is coming. Don't you worry about that.Don't get caught in the same logical fallacy that created the bubble. Just because something is going down(up) at rate X doesn't imply it will continue going down(up) at rate X. Even the current rate of change WRT the historical distribution of rates of change -- i.e. worst fall in X since 19YY -- doesn't mean much.There are sound reasons why a downturn of a given magnitude today will produce much sharper rates of decline than it would in the past. Companies have a lot more real-time data than they had 10 years ago (let alone in 1929). Wal-Mart knows everything it sells every single day at the end of everyday. The accounting that companies used to take weeks doing at the end of every quarter can now be done overnight. The result is that companies are much more able to turn-off the faucet (and to know that they should turn-off the faucet) than ever before. Dell recomputes their production plans every two hours. That volatile behavior may seem shocking to the statististic makers (and make for "eye popping" headlines), but it also means that businesses don't build up a killer inventory that would require even large cuts in the future.Like Dominic and Twofish, I'm older and remember earlier recessions and times when "they" (the nattering nabobs of negativism) thought the U.S. was finished. But it wasn't finished then, it wasn't finished in 1929, and it isn't finished now. Things may be bad with a capital B, assets (stocks & houses) will probably fall another 20-30%, and some banks (both commercial and central) will suffer some mortal blows, but the economy will survive.
Last edited by Traden4Alpha on March 2nd, 2009, 11:00 pm, edited 1 time in total.
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