I also refuse to participate in this "recession" depression . . . Ha Ha Ha !

> In looking at the stock market, for example,
> or any speculative market for that matter,
> if your claim that "events don't cause
> trends" is correct, then what causes
> trends to reverse direction?

Robert:

First, let me clarify... I don't say "events don't cause trends" and leave it at that. I say "Events COMPOUND to cause trends."

Without being pedantic - and nit picking every littling thing and reverse analyzing it to find a single solitary "event," which can end up being linked back to fire if you go back far enough like I did in my other post - each thing an indivudual does COMPOUNDS with the things other individuals do, to create a visible trend.

Yes, there had to be a first person to "do it" or "buy it" or "wear it" or whatever. And yes, if it wasn't for the "manufacturer" the garment wouldn't even have been avaiable. And if it wasn't for the textile designer... and so on.

People think they are individual, but they are more herd-like than they imagine.

Personally, I like Stetson style hats. Search the archives here and you'll see my prediction about them. I based my prediction on the fact that *I* like them and want one. I know others... maybe of my generation, maybe not, will also be thinking like me and want one. Together, our want and taking action to satisfy that want, creates a trend.

Once our want has been satisfied, we stop buying. Less demand eventually creates less supply. Less supply creates less availability. Which removes the item from people's mind and so they want it less. Around and around we go. But the downward trend began when DEMAND was met and stopped increasing.

The same with speculative things, like stocks...

I am NOT what you would call "Stockmarket savvy". Put options, call options, shorts, etc., have minimal meaning to me. Basics of the terms I may know... the details which fill the thick books are not a part of my knowledge.

Nevertheless, from my observations of the stockmarket, it is based on DEMAND.

The initial DEMAND gets the ball rolling. I believe these people are called the "early adapters."

The next segment, whatever they are called, see what the first-comers have (or have received by way of return) and start to jump on board.

The third segment... the largest... now wakes up and gets in on it too. DEMAND is still there.

The early-adapters and the second segment stay "in the market" because DEMAND is driving the market UP.

As DEMAND starts to dwindle - because the third and largest segment has bought as much as they will buy - the early adapters and second segment people start to "get out" of the market and offload their stock.

Dwindling DEMAND now encounters OVER-SUPPLY just as the last segment of "buyers" comes on board only to be burnt. And the stock now starts to go down.

The thing with the early-adapters leaving the market is, they do it "around" the same time but not AT the same time.

Some early-adapters get out earlier than others. But seeing as there are many many of them all doing the same thing, the stock price drops because of sudden oversupply.

Can this type of thing be caused by a "single event"? Yes and no.

Yes: Whenever Kerry Packer (Australia's richest man) sells stock in companies he owns stock in, all the people who buy into whatever he buys into also sell their stock. And the price drops. So in a sense, Kerry Packer's decision to sell - that single event - seems to cause what then followed.

No: Other elements came into play to cause Kerry Packer to sell the stock in the first place - poor company performance, he needed the money to launch a new venture of his or bolster his other companies, bad hair day, or whatever.

But basically, it all comes down to DEMAND and SUPPLY.

At the moment, property where I live is going up Up UP. And its value will continue to rise, in my opinion, as these things happen...

1: Baby boomers begin to retire and move here.
2: They move here from the higher-priced cities.

I live on The Gold Coast, where they have the Indy race (in October).

Real Estate is cheaper than in Sydney - Australia's largest city.

What happens is, people sell up in Sydney, then move up here and buy. They end up getting bigger and newer houses with the same amount of money, and still have money left over.

But as there are only a limited number of these houses, demand and price goes up.

Does that help or just make it more confusing? :o)

Michael Ross


The idea you have been looking for could be here.

Michael -

We have now gone full circle and I completely agree with you that "events do cause trends." :o)

Robert M. Campbell

Hi Robert

> We have now gone full circle and I
> completely agree with you that "events
> do cause trends." :o)

Here is one to think about. . . . . . "Trends that cause events".

We are now in a bear market trend, and if history repeats it's self,
Bush will be a 4 year president (one term).

There are three presidents that were voted out of office by the people.
Hoover . . . . depression
Carter . . . . . Recession
Bush Sr . . . . Recession

We are now starting to hear "It's the economy stupid".

Look for Bush Jr to be a one term president. The trend that caused an event.

Regards,
D.R.(Don)McArdle

Hi Don -

The law of cause and effect states that some "events" are highly correlated with other "events."

Yes, you are probably correct in your assessement of George W. Bush's chances for re-election: low.

Of course, while nobody can know for sure what the future will bring, the prudent always position themselves so they have the "odds" on their side.

Best wishes, Don.

Robert M. Campbell

> We are now in a bear market trend, and if
> history repeats it's self,
> Bush will be a 4 year president (one term).

> There are three presidents that were voted
> out of office by the people.
> Hoover . . . . depression
> Carter . . . . . Recession
> Bush Sr . . . . Recession

Robert...

Wasn't Clinton president during a recession?

Also, seeing as the depression lasted for such a long time, isn't there also eveidence that there are presidents who lasted two terms during bad economic times?

Michael Ross

Hi Michael

I hope you don't mind if I jump in.

>Wasn't Clinton president during a recession?

The recession started on Bush Sr watch. When Clinton was elected,
are country was in red ink up to it armpits. When Clinton left office
we were running in the black ,and he left a huge surplus. And the
stock was in a bull market.

Since then on Bush Jr watch he gave all the surplus money away. We
are back in red ink, and the red ink is flowing like wild fire. The stock
market is heading into a great depression.

What is happing now is just about a carbon copy of what happened on
Bush Sr watch, red ink, down market, and a war with Iraq.

Needless to say Bush Jr has about the same adviser that Bush Sr had.

The battle cry when Clinton was elected was "It's The Economy Stupid" .
Now I'm starting to hear the same battle cry.

>Also, seeing as the depression lasted for such a long time, isn't there also
>eveidence that there are presidents who lasted two terms during bad economic
>times?

None that I can think of.

Have a great day Michael.

Regards,
D.R.(Don)McArdle

> I hope you don't mind if I jump in.

Course not... actually, my post was meant for you. I type Robert in by mistake. :o)

Anyway...

> The recession started on Bush Sr watch.

Hold on here. Isn't it Reagan who supposedly caused the stock market collapse? What was with the S&Ls back in '87 (I believe it was '87)?

When
> Clinton was elected,
> are country was in red ink up to it armpits.
> When Clinton left office
> we were running in the black ,and he left a
> huge surplus. And the
> stock was in a bull market.

Hang on again here...

Clinton was responsible for the LARGEST TAX HIKE in history, if I'm not mistaken. And for TAXING SOCIAL SECURITY! That's where your surplus came from... from the government making money off of the people - something no government should ever be doing.

And Clinton may have been in office at the time, but I would hardly draw the conclusion that he was the driving force behind the craziness of the stockmarket. I'd say it's more like good luck (timing) than good management.

Reminds me back when Fraser (conservatives) lost the election to Hawke (socialists) down our neck of the woods. The economy was down the crapper, drought was going gangbusters and things did not look good. After Hawke won the election the drought broke, and a few other things came into play - which had been instigated by Fraser before the election. It all made Hawke look good even though he had nothing to do with it.

> Since then on Bush Jr watch he gave all the
> surplus money away. We
> are back in red ink, and the red ink is
> flowing like wild fire. The stock
> market is heading into a great depression.

Again, I would hardly draw any conclusion that Bush Jr's presence in the White House has caused the stock market to go down.

If stocks are a reflection of the underlying business (and they are). And if eventually the prices will correct themselves to be more inline with the true value of that underlying business (and they do). Then what's really going on is nothing more than a market correction back to the underlying business' true worth, based on its "business."

If "business" is down, it is not to do with Bush. It is to do with the flamboyant, non-thinking crazy, hyper-inflated stock prices coming back down to reality. The dotcom bubble bursting as people finally realized a company which has never made a single penny in profit should not be worth $150 a share. Thousands of people suddenly being layed off around the same time. Vast amount of vacant commercial office space. The pool of advertising money drying up. And so on.

If anything. Bush has inherited a bad economy which had not fully exhibited how bad it was until after the election.

> What is happing now is just about a carbon
> copy of what happened on
> Bush Sr watch, red ink, down market, and a
> war with Iraq.

A carbon copy inasmuch as a bad economy being inherited, maybe.

As for war... isn't it Clinton who has committed more American troops and gotten involved in more conflicts than any other president in history?

What's the point of mentioning war anyway?

> None that I can think of.

I did a search and found a president who was in power for more than one term during a bad economic time. His name is...

Roosevelt. He was president from 1933 - 1945. During The Great Depression!

So doesn't that disprove any so-called trend that presidents in bad economic times only get one term before being voted out of office?

Michael Ross

I'm really not trying to cause a flame war with this post, but...

Love him or hate him, the fact is Clinton was a master of the media (and still is, although he comes off more corny now).

The economy wasn't doing so good during Clinton's terms, but he was masterful at presenting things in a good light (he had to, after all "it was the economy, stupid"). Then, he took credit for the "good economy" -- which is in part accurate. He did (with the aid of a willing media accomplice) help create the impression of a booming economy. It was like a self-fulfilling impression. Unethical? In my opinion, yes. But he did it very well.

And, really, the main way the president affects the economy is through his tax policies -- which should be checked by the congress (although Clinton did go around them pretty well). It's not as though the president (any president) can push a button and *poof* we get a fantastic economy.

It's interesting: just about everyone who relies on the major news media in the U.S. thinks Clinton was a good president. Everyone else thinks he's got unbelievable gall.

Definitely a master of the media.

-Phil

Phil:

Reminds me of a Kerry Packer incident down here...

He sold of his Westpac (One of our major banks) shares and his "followers" did likewise.

This BIG offload resulted in the media printing that Westpac was "shakey."

Of course, more people offloaded Westpac shares because of the media and the bank did become "shakey." Not enough to even be remotely close to collapsing. But still...

And all because a journalist didn't understand WHY the shares took a quick dive.

I agree with his ability with the media. The man knows how to play them to his best advantage.

Now if only we could get the media to NOT report the state of the economy. Then people would go about their business without changing their behaviour. And things might not get as bad as they do or overflourish as they have done.

Michael Ross