Wednesday, April 23, 2008

I have just GOT to quit visiting economic blogs. I know the rest of you probably wish I would too.

See, I first started focusing on the housing bubble, cause...well, I recognize a bubble when I see one. I have a Doctorate in Fadology.

But I admittedly don't know a whole lot about financial markets, or credit markets or any of the rest of that, because....well, see the title of my blog.

Visiting the economic blogs is scary and depressing. I was trying to work my way through a huge list of them to bookmark just the relevant, but it is such a steady drumbeat of negativity that I could only do about 10 per day.

So finally, I work my way up to the D's, eliminating any site that is too jargonistic, or too conspiracy minded, and all the stock market blogs (if I ever invest in the stock market, I'll be using a dartboard technique.)

Oh, here's one. The Daily Dose of Optimism. That sounds promising. Look -- he's saying that despite the bad news, the stock market is only down 6.5% for the year. Wait....

This doesn't look right.

There's no date, but the log entries stop in August of 2007. (Coincidentally, my first down month in 5 years.) It's funny, because there is no hint where he went. No followup whatsoever.

Wonder if he got hit by a bus. Or fell into a depression. Or became a Sith.

In a way, there is almost too much agreement how bad things are, or are likely to get. Makes me doubt it, because it's just too easy.

But then I remind myself that almost everyone I talk to on an everyday basis is blissfully unaware. It doesn't impact on their day to day lives, or so they think. They haven't even begun to consider the idea, for instance, that their house could actually be worth less.

How they can be unaware is a mystery to me -- but I suppose if they never read the paper...

And if I really need an antidote to all the scary news, I need but watch Fox and or CNBC or CNN, and they'll lull me right back into complacency...


RDC said...

Just keep in mind that most comments are on the extreme. Reality is generally not as bad as the doomsayers say, and not as good as the optimists.

Are we in a rough economic times? - yes. Does the stock market drop during such times? - yes. Is the drop we are seeing unusual? - No. Actually the average drop in the market during a recession is around 25% for the DOw. At its worst so far the DOW has dropped above 19% and has recovered somewhat from that. The stock market is usually a leading indicator for recessions in that the drop in value generally hits bottom at the start of the recession and starts climbing back up while the recession is occuring. You are seeing signs of that happening here.

Also you must separate the statistics from the individual cases. It might be good for one town while in the dumps in others. Likewise it might be bad in one town while everywhere else is booming.

Is the current situation any worse then previous economic periods. Not really. A little different in nature, but not really worse then what has occured in previous recessionary periods.

If one looks at history and looks at major shifts in technology, population, etc such as the movement inot the industrial age, or the information age, etc. there have been similar disruptions.

The major thing is in the US our disruptions generally mean that we cannot afford some things that we might want or we are inconvenienced in some fashion (what do you mean that I have to spend $100 dollars per week to drive the SUV I want to drive), in the third world such disruptions may mean the difference between life and death.

Duncan McGeary said...

I'm old enough to remember a number of looming disasters -- that we somehow muddled through.

But every crisis like this has the seeds of a bigger disaster, and just because we've avoided that up to now doesn't mean it isn't a dangerous time.

Also, I'd have to say that for many, the inconvenience of "$100 dollars per week to drive the SUV".

Maybe not starvation, but very unpleasant.