I love this forum . . .

[Airelon]

It's like an oasis. A calm in the storm. Some place I can find rational people.

But throughout the day, as I'm passing the time as I'm watching trades? I visit other forums. That can be a really bad idea. Because I run into morons. The "End of the world" types. So I guess you could say that in reality I do it to myself. Some of these places are nothing but vBulletin junk forums. But I believe in spreading sound education in regards to investments. Make it as fun as possible. But throw something out there to help. And what do I run into? Post after post of "Zeitgist" crap - and how Ben Berneke is actually the Beast of Revelation.

I feel like throttling them and screaming: "We've been in MUCH worse spots folks! It's not the end of the world. Jesus hasn't shown up (yet) to take it all down - so SHUT UP!!"

The sort of fear I'm seeing out there IS what causes a crash. A stock market crash is NOT AN ECONOMIC PHENOMENON! IT'S A PSYCHOLOGICAL PHENOMENON!! Our current economic situation won't cause a crash. FREAKING OUT WILL! And we've been in much worse spots. But our current "fear sensational" culture? Is just spiraling.

So in the end? I just end up blowing up. I had a 10th grade Architecture teacher. Mr. Jabe. He was 27. Really cool guy. But we were High Schoolers. We gave him a ton of crap. Every once in a while - when we had gotten to be too much for him? He'd lose it.

"You can all sit down, and shut up. I've had about all I can take. So you get to listen to me rant, on the K. Jabe Gospel Hour. What is it with you guys? . . . . ."

And off he'd go. For the full hour. Decrying the lunacy that was going on around him.

I understand Mr. Jabe now - so much better. I had my own little "Gospel Hour" today.

[Airelon]

And just for further explanation that this is part of the same old cycle we always need to see?

* Depression of 1764 (1764 - 1783) - England's Currency Act of 1764 removed the American colonies' right to issue Colonial Scrip, a credit-based money. The destroyed money supply caused a depression that ignited the American Revolution.

* Panic of 1797 (1797 - 1800), Bank of England's deflation crosses the Atlantic and disrupts commercial and real estate markets in the colonies and Caribbean.

* Panic of 1819 (1819 - 1824), the first major financial crisis in the United States.

* Panic of 1837 (1837 - 1843), a sharp downturn in the American economy caused by bank failures and lack of confidence in the paper currency

* Panic of 1857 (1857 - 1860), failure of the Ohio Life Insurance and Trust Co. bursts a European speculative bubble in U.S. railroads and loss of confidence in U.S. banks

* Panic of 1873 (1873 - 1879), economic problems in Europe prompt the failure of Jay Cooke & Company, the largest bank in the U.S., bursting the post-Civil War speculative bubble

* Long Depression (1873 - 1896), begins with the collapse of the Vienna Stock Exchange and spreads throughout the world. Some historians do not believe it is actually one large recession. It is important to note that during this period the global industrial production greatly increased. In the US for example, industrial output increased 4 times.

* Panic of 1893 (1893 - 1896), failure of the U.S. Reading Railroad and withdrawal of European investment leads to a stock market and banking collapse. Duration: 17 months

* Recession of (1895 - 1897) Duration: 18 months

* Recession of (1899 - 1900) Duration: 18 months

* Recession of (1902 - 1904) Duration: 23 months

* Panic of 1907 (1907 - 1908), begins with a run on Knickerbocker Trust Company stock October 22nd 1907 sets events in motion that will lead to a depression in the United States. Duration: 13 months

* Post-WWI recession - marked by severe hyperinflation in Europe over production in North America. Very sharp, but also brief.

* Great Depression (1929 to late 1930s), stock market crash, banking collapse in the United States sparks a global downturn, including a second but not heavy downturn in the U.S., the Recession of 1937. Durations: 43 and 13 months respectiviely.

* Recession of (1945) Duration: 8 months

* Recession of (1948 - 1949) Duration: 11 months

* Post-Korean War Recession (1953 - 1954) - The Recession of 1953 was a demand-driven recession due to poor government policies and high interest rates. Duration: 10 months

* Recession of (1957 - 1958) Duration: 8 months

* Recession of (1960 - 1961) Duration: 10 months

* Bond Inversion of (1965 - 1967) no recession materialized

* Recession of (1969 - 1970) Duration: 11 months

* 1973 oil crisis (1973 - 1975) - a quadrupling of oil prices by OPEC coupled with high government spending due to the Vietnam War leads to stagflation in the United States. Duration: 16 months

* 1979 energy crisis - 1979 until 1980, the Iranian Revolution sharply increases the price of oil

* (1981 - 1982) Duration: 16 months

* Early 1980s recession - 1982 and 1983, caused by tight monetary policy in the U.S. to control inflation and sharp correction to overproduction of the previous decade which had been masked by inflation

* Great Commodities Depression - 1980 to 2000, general recession in commodity prices

* Late 1980s recession - 1988 to 1992, collapse of junk bonds and a sharp stock crash in the United States leads to a recession in much of the West

* Japanese recession - 1991 to present, collapse of a real estate bubble and more fundamental problems halts Japan's once astronomical growth

* Asian financial crisis - 1997, a collapse of the Thai currency inflicts damage on many of the economies of Asia

* Early 2000s recession - 2001 to 2003: the collapse of the Dot Com Bubble, September 11th attacks and accounting scandals contribute to a relatively mild contraction in the North American economy.

There is no need for widespread fear. Fear is a reaction. Fear is not working through to the Solution.

[Airelon]

I definitely believe we're in for a buster of a time. It's going to be tough. 1979-1981 type tough. I used to think we were going to see the DOW hit 11,500. But now I'm thinking we'll see it further down. But there are a lot of people that weren't around during the recession that started in 79'. I remember it quite clearly. We were middle class, living in a 40k house in 1978 (Which was good for that time, equivelant to a 2900 sqr foot home now). But when the recession hit? I remember Dad not being able to buy gas for 3 days during the oil shortage. I remember never eating name brand food. All our food boxes, as I called it as a kid were "in black and white" no-brand. Much of what we ate was food out of the garden. If we turned our nose up some days, we didn't eat. Because there was nothing else. We drove an old diesel (Peugot 505). My father would leave and go around the country looking for work. The man worked like a freaking horse. He'd take 6 months stints in Texas, Ohio, wherever he could find work. I honestly believe that's what we are in for. We will be very fortunate if we climb out of it in the markets by 2009. But the point is - we will climb out of it. This is simply the next peg down - which I agree - we need to take down. It's all part of the cycle.

But the fear I'm seeing is not justified. Everything has become so sensationalized. It's the culture that brought us "Entertainment Tonight". Now the same sensational fear is being applied to the markets. Talking with Dad? I found out that I was right in my childhood recollections. There was not the sort of fear out there in 1979 - like we're seeing now. Even when you factor in (at the real inflation #'s site) energy and food, our inflation is still far below where it was then. As are our unemployment numbers. Our standing are living is 20x's higher than what I had in 1979. But the consumer confidence is what I see as out of whack. The fear that's being spread about is the most serious part of the situation. Not the underlying economic factors - which while serious - don't match up. We've been in far worse spots, with less fear. The fear will screw us up faster, and farther than anything else. Fear causes market crashes. Not economic conditions.

Can you honestly imagine your middle class kid trying to live like what we experienced in 1979? Heck, even their parents? We've become a nation of crying babies. How would people react today if they simply could not buy gasoline. They flip out now if they can't get a freaking whopper.

[Fredledingue]

What I find truely amazing today is that like in 1974, oil prices have trippled and like in 1974, the US is in a big budget deficit due to war.
And what is causing the market to crash? Malpractice in the home mortgage business catching banks off guards!

[Airelon]

You're right, the cyclical nature is sorta wild when you start lining things up.

And look who the U.S. is postering with, again, in the midst of expensive Oil?

[Fredledingue]

You know, sometimes I think there is a crash because poeple decided that there is a crash. Like "There is no crash but there will be a crash so we sell everything".
It's now about 6 months that analysts are literaly hunting for hints that the subprime crisis is spreading to other sector of the economy and these hints have failed to materialize.
Now, there is a rumor that the turmoil could spread worldwide because a couple of non-US banks will write off a few billions too...
IMO we would be in recession already if one had to come.

Sure, we may see a mini-recession or flat growth one quarter or two but no major crisis.

I also apreciate the quietness and stay-cool dont-panic atmosphere of this board.

[llamagatekeeper]

Lol Airelon... I know what you mean about the doom and gloomers. I actually liked Ron Paul for a little while and still do only because he wants to send us back to the beginning to try it all over. Good idea? Probably not, but it's the type of change a lot of "younger" people want. A LOT of his ideas are extremely far fetched and down right stupid with his claims of superior knowledge of Austrian Economics. Give me a break...No western/developed economy could survive without a central bank. But, his points about reducing the size of gov't are about the only things I could really like about him.

And to Fred- It might be because a lot of us are still young and I use that term loosely..hehe.., but honestly. I've lost around 3% of my portfolio in the past year. Am I sweating it? No Way, I'm 18 and have 70 more years to watch that baby grow. I think of it as sunlight in Iceland. We can only have so many hours(years) of sunlight(growth) before the sunsets(recession,retraction,bear) for the time being. But the sunlight is the majority of the time in full view and you can still live even while the sun is down. I know that was stupid, but it gets the point across that who the hell cares if the market goes down. For half the people here it's all unrealized gains and even day traders like Blaine have fluid cash to buy and sell stocks so they are about optimizing opportunities.

That is it for now. I just got settled into my dorm and classes started:-)Will follow up later.