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>Does anyone think Ebbers could pull of his magic show
again today?
I do. We have laws against murder and yet murders still
occur. The bubble encouraged people to take chances because they thought
they had better margins for error or they thought they could manage their way
out of it. It didn't help that the SEC was understaffed, but that wasn't
the causative factor.
Kent
----- Original Message -----
From: <A
href="mailto:bobskc@xxxxxxxxxxxx"; title=bobskc@xxxxxxxxxxxx>BobsKC
To: <A href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx
Sent: Monday, August 19, 2002 2:17 PM
Subject: RE: [RT] GEN: DEFLATION AND GOLD....
We have not had a depression for 70+ years but now.. now that we
are coming off the bubble and the insane values that bubble placed on equities,
we are headed for another depression???? Isn't it possible that
equity prices and PE ratios are simply returning to historic values and common
sense pricing? We still have growth .. small but real.. would you rather
have that or the pretend growth of the bubble? A lot of worthless
companies are still folding their tents. Were it not for the bubble, they
wouldn't have had a tent to fold. (Does anyone think Ebbers could pull of
his magic show again today?) Crooks are still being exposed. Crooks
made possible by the bubble. This is a cleansing process and it is a
good thing. It is not the end of America. The Chinese are not taking
over. American industry is not doomed and there is not going to be
any depression. The market does not have to roar up or down you
know? I it possible for it to sit in a long term, tight trading range
while the touch up is completed in the process of burst bubble clean up.
I can make a valid argument that aliens will land in the next year and
the likely hood of that is at least as great as another depression.
BobAt 01:27 PM 8/19/2002 -0400, you wrote:
DEPRESSION
and DEFLATION not EXACTLY the same...... <FONT
color=#0000ff size=2>yes, in a depression, real assets worth nothing, and the
US dollar worth little, so gold shines....can't be printed, can't be
forged.....BUT With a slower evolving
deflationary scenario, all assets groups decline......pricing power is
gone.This is why everyone is watching
the housing market so carefully.....as
once THAT market begins to decline, then we are really in trouble and a
depression becomes likely since mortgage holders (banks, etc) begin to
foreclose on properties whose value is less than the principal on the mortgage
due.Once that ball gets rolling, the
government has no choice except to pull an "Argentina" and massively
reflate.....if they can do so in time.If
they can't, wham, depression occurs....<FONT color=#0000ff
size=2>if they do catch it in time, then massive inflation results with
mortgage holders and other creditors, the big losers.
-----Original Message-----
From: Charles Meyer [<A href="mailto:chaze@xxxxxxxx";
eudora="autourl">mailto:chaze@xxxxxxxx]
Sent: Monday, August 19, 2002 11:39 AM
To: REAL TRADERS
Subject: [RT] GEN: DEFLATION AND GOLD....<FONT
face=arial size=2>
Group-
Excerpt below from interview which references price of HM during the
great depression. I wanted to know Pretcher's logic for expecting the
opposite in the event of a deflation this time around.
chas
==========================================================
TAYLOR: Well, I have had some experience in analyzing gold shares in
all sorts of markets. Homestake Mining shared with me their daily share
prices dating all the way back to 1888 through 1998. During the depression,
Homestake Shares appreciated very greatly despite the fact that we
experienced deflation rather than inflation.
BATRA: Did the price of Homestake rise right from the beginning
or...
TAYLOR: No, actually Homestake's share price initially fell too from
$83.50 just before the crash to $65 about two weeks after the crash. So
perhaps the law of substitution did initially apply. But from November 15th
and thereafter, Homestake's shares rose dramatically, to a high of over $500
by 1936. And during 1932, when the DJIA had lost 90%, Homestake's shares had
reached $162. So investors who diversified their portfolios with a little
Homestake were able to travel through the Great Depression relatively
unscathed, while those who owned only the Dow Jones Industrials, were
devastated.
BATRA: Ok, what I am
saying is that timing is important. Gold stocks are also going to do
very well. However, at this stage, my
advice is to start preparing yourself by buying gold bullion. Then
begin buying gold shares the moment there is a whiff of inflation or when
the market begins to favor them.
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