Financial topics

[John]

After several years of warnings on the Generational Dynamics web
site, it's now evident to everyone that we're in the midst of
worldwide financial crisis, and that this slide is occurring exactly
as predicted. There are many web log topics related to this subject.
Discuss them here.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.GenerationalDynamics.com/forum

[Timon]

Hi, John. I am Chinese and visit your blog by a chance months ago. The generational theory is so great which opened a whole new window for me to understand this world, history and future. Since then I visit your weblog everyday.

On Thursday, the Fed successfully "saved" the almost-collapse Morgan Stanley by curbing the short-selling. On this weekend, a 700 billion bailout plan will be passed. By doing this, a market crash can by postponed for weeks. But in my opinion, a much unanticipated meltdown will occur while everyone still celebrate the Treasury rescue plan.

And one question for you, John. How do you decide the probability of an event. Is it your guess or by using some mathematical model?

Nice to meet you here.

[Golden Fox]

A month ago I was discussing the economic situation with my Mom. I told her that I believe we are heading into another great depression and she denied that any such depression could ever occur, taking a more optimistic view that we will get nothing worse then an average recession like many others America has had. I never could have expected the collapse of so much big business in just a few weeks, Lehman, Merrill, AIG, Fanny Mae, Freddie Mac. It seems I was right and it's definately close now....

[John]

> Hi, John. I am Chinese and visit your blog by a chance months ago.
> The generational theory is so great which opened a whole new
> window for me to understand this world, history and future. Since
> then I visit your weblog everyday.

Thanks for the compliment. I appreciate it.

> On Thursday, the Fed successfully "saved" the almost-collapse
> Morgan Stanley by curbing the short-selling. On this weekend, a
> 700 billion bailout plan will be passed. By doing this, a market
> crash can by postponed for weeks. But in my opinion, a much
> unanticipated meltdown will occur while everyone still celebrate
> the Treasury rescue plan.

> And one question for you, John. How do you decide the probability
> of an event. Is it your guess or by using some mathematical
> model?

In an article in 2004, I experimented with computing some specific
probabilities.

** Six most dangerous regions in world
** http://www.generationaldynamics.com/cgi-bin/D.PL?d=ww2010.i.danger041120

From the point of view of Generational Dynamics, we're headed for a
new world war, and I wanted to estimate the probability that it would
begin in 2005, and each year thereafter. I made a computation based
on the number of years since the end of the previous crisis war, and
came up with a probability of 21% that it would start in 2005, or if
it didn't then the probability would be slightly higher in 2006 and
each subsequent year. That was a very rough calculation, and it
needs a lot more work, but the methodology was basically sound.

Most of the probabilities that I post are based on similar kinds of
informal estimates. This would be a perfect research project for
some post-graduate student, and I believe that these probabilities
could be made a lot more accurate.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.GenerationalDynamics.com/forum

[John]

> A month ago I was discussing the economic situation with my Mom.
> I told her that I believe we are heading into another great
> depression and she denied that any such depression could ever
> occur, taking a more optimistic view that we will get nothing
> worse then an average recession like many others America has had.
> I never could have expected the collapse of so much big business
> in just a few weeks, Lehman, Merrill, AIG, Fanny Mae, Freddie Mac.
> It seems I was right and it's definately close now....

I've been dealing for a long time with people who simply say that
nothing like the 1930s Great Depression could ever happen again,
because of all the institutions that were put into place to prevent
it. They used to say that I was completely crazy - at least they
don't do that any more.

I like to point out that those institutions already failed long ago.
The SEC was specifically formed to prevent a new 1920s-type bubble,
but of course the SEC already completely failed at that, as can be
seen from the 1990s bubble. All the regulations that were put into
place in the 1930 were ignored or repealed by people like your mother
who believe that nothing bad can ever happen again.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.GenerationalDynamics.com/forum

[Rafaelloello]

Thanks again John for starting this forum. My guess is that you have lots of "closet" devotees who will now appear and contribute to the collective good. I was wondering if maybe you could put some forum at the very top level about managing assets/investments in these once-a-century times so that our aggregated ideas slide easily into the right easily accessible place? i.e. moving Financial Topics to the top of the forum "tree".

Thanks,
Raf

[401kobsessive]

WW1 and WW2 at some point will be seen as one war that was incomplete and needed to be finished up. It was started by a group known as the Black Hand. They killed Austria's Leader and threw the world into war. I feel the next war will be over a loss of a leader. I hope that it is not our leader. I have said before on personal contact with John.... Everything has aligned for panic. We only need a food shortage to complete the cycle. Urban areas will see masses leaving for less populated areas. Farming will be in fashion once more. I am no farmer. However, I feel that farming will be the next item to restore GDP to America. It is the foundation of life and from whence we came.

[The Grey Badger]

Urban masses leaving for the hinterland - and fortifying their holdings - only happened once in my knowledge of world history. During the long, slow crash of the Roman Empire. I doubt we're there yet. However, there has been a trickle of back-to-the-landers and off-gridders which actually started with Robert Heinlein's very post-seasonal 1946 advice to turn survivalist; the Russians were going to prolong the 4T past recognition. Never happened. (Could have wasted 60 years doing so.) Followed by Idealists doing it a la Thoreau, with a 90%+ failure rate due to trying to live communally etc. Check out a documentary - and an article in the weekly Alibi - about "the Mesa People." There will always be some. But as a mass movement? Not unless things go so very badly sour we're in a civilization-ending moment. Which I seriously doubt we are.
(Actually, IMO, Western Civilization - at least Part 1- was one of the casualties of the Western Front. We're in its successor civilization now. However - the Hellenistic cultures thought of themselves as Greek, and Byzantium thought of itself as Roman. But I digress. I always do.)

[401kobsessive]

Urban masses leaving for the hinterland - and fortifying their holdings - only happened once in my knowledge of world history. During the long, slow crash of the Roman Empire. I doubt we're there yet. However, there has been a trickle of back-to-the-landers and off-gridders which actually started with Robert Heinlein's very post-seasonal 1946 advice to turn survivalist; the Russians were going to prolong the 4T past recognition. Never happened. (Could have wasted 60 years doing so.) Followed by Idealists doing it a la Thoreau, with a 90%+ failure rate due to trying to live communally etc. Check out a documentary - and an article in the weekly Alibi - about "the Mesa People." There will always be some. But as a mass movement? Not unless things go so very badly sour we're in a civilization-ending moment. Which I seriously doubt we are.
(Actually, IMO, Western Civilization - at least Part 1- was one of the casualties of the Western Front. We're in its successor civilization now. However - the Hellenistic cultures thought of themselves as Greek, and Byzantium thought of itself as Roman. But I digress. I always do.)

Your probably right. In North Korea there is a profession of picking up the hundreds of bodies that have starved to death. That is a dead end job.

[Golden Fox]

Dear John,

I've been dealing for a long time with people who simply say that
nothing like the 1930s Great Depression could ever happen again,
because of all the institutions that were put into place to prevent
it. They used to say that I was completely crazy - at least they
don't do that any more.

I like to point out that those institutions already failed long ago.
The SEC was specifically formed to prevent a new 1920s-type bubble,
but of course the SEC already completely failed at that, as can be
seen from the 1990s bubble. All the regulations that were put into
place in the 1930 were ignored or repealed by people like your mother
who believe that nothing bad can ever happen again.

Sincerely,

John

John J. Xenakis
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.GenerationalDynamics.com/forum

I understand, just a year ago I would probably have thought anyone who said that a financial depression was just around the corner was crazy. But, given that most people I have seen who are saying some of the things you do either immediately want to blame a political party (democrats versus republicans) or believe that the financial crises are part of a "New World Order Conspiracy" I still think most people saying this are crazy.

Most people just can't see the underlying generational history that is bringing this all together and blame it on some other explanation. Anyway, as for my mother, she is a boomer born in 1958 and, as you are no doubt aware was taught by her G.I and Silent elders that another world war or depression could never happen and that it was 'history' because of the protection of institutions like the SEC. Although I have had lengthy discussions about Strauss and Howe's generational theories with her some of which have have lasted hours she still doesn't want to believe that an economic depression is possible and that any current economic harships will soon be resolved.

Golden Fox