CWBD: Doom?

originally posted by Joe Dressner:
I don't think so. But I have a huge pre-order for Captain Tumor Man t-shirts.
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Damn it. I have been working on stealing the Cpt. Tumorman logo and making the t-shirts myself.
 
originally posted by Eden Mylunsch:
I just finished reading Malcolm Gladwell's "Outliers" and I'm trying to figure out if we're entering into any cycle that presents unseen opportunities...
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There are always unseen opportunities but the key question for us is whether we will be the ones who benefit from them.
 
originally posted by Rahsaan:
originally posted by Eden Mylunsch:
I just finished reading Malcolm Gladwell's "Outliers" and I'm trying to figure out if we're entering into any cycle that presents unseen opportunities...
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There are always unseen opportunities but the key question for us is whether we will be the ones who benefit from them.
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The story of my life is blind luck.

It makes me happy that folks like Bill Gates and Warren Buffett understand this.
 
originally posted by VLM:
CWBD: Doom?
I also worry that it could be self-fulfilling in that folks could get panicky and react as irrationally in a downturn as they did in the bubble.
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Could get panicky?

Current economy is being just as driven by irrational fear as the previous one was by irrational hope. Of course the fear becomes rational if you assume that everyone else will be behaving the same way.
 
originally posted by Jay Miller:
originally posted by VLM:
CWBD: Doom?
I also worry that it could be self-fulfilling in that folks could get panicky and react as irrationally in a downturn as they did in the bubble.
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Could get panicky?

Current economy is being just as driven by irrational fear as the previous one was by irrational hope. Of course the fear becomes rational if you assume that everyone else will be behaving the same way.
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I was thinking about this last night. We have a whole generation (maybe two) that doesn't really remember a deep recession. This is not a depression where we will hit 25% unemployment. Sure, a couple of professions may (and should) be wiped out (e.g. mortgage brokers) and others will suffer heavy losses (e.g. construction) but most people will continue about their lives while hopefully saving some money and spending more prudently. All the assets that bubbled, including wine, will fall accordingly. I mean, is there any reason that 2005 Mugnier Musigny was $1800/btl? Folks who banked on that sort of asset bubble being sustainable are fucked, but for the most part we aren't asset heavy. The top of the wealth ladder owns most of the assets and rightly take most of the damage.

We're going to be OK. Maybe people will do something more productive with their lives than running off to Wall St. or messing with real estate.

Time to let go of the FIRE economy towards something that makes some fucking sense.

Note: The preview function was NOT used in the composition of this reply.
 
originally posted by VLM:

I was thinking about this last night. We have a whole generation (maybe two) that doesn't really remember a deep recession. This is not a depression where we will hit 25% unemployment. Sure, a couple of professions may (and should) be wiped out (e.g. mortgage brokers) and others will suffer heavy losses (e.g. construction) but most people will continue about their lives while hopefully saving some money and spending more prudently.
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I'm seeing much heavier wipe outs. This is badly hitting friends and acquaintances in professional classes such as architects, attorneys, journalists, doctors, etc. -- fields that had been pretty much immune to past recessions. We're talking loss of jobs and businesses folding up. When they stop spending, most areas of the economy retreat. Sure, Campbell's Soup continues to do well, but any type of business supported by discretionary spending gets hit really hard, and so do those businesses that cater to other businesses. And even government (except the federal govt) is affected because tax streams dry up and there can be no deficit spending. So all this is why economists such as Krugman are calling for massive deficit spending by the federal government, but even so, they see a very rough road ahead until things turn around.
 
Adding to my previous post -- it is important to understand that previous recessions have been caused by increases in interest rates that slowed business expansion. This time, interest rates are essentially at zero, and businesses are collapsing. So it's a very, very different situation.
 
originally posted by Claude Kolm:
originally posted by VLM:

I was thinking about this last night. We have a whole generation (maybe two) that doesn't really remember a deep recession. This is not a depression where we will hit 25% unemployment. Sure, a couple of professions may (and should) be wiped out (e.g. mortgage brokers) and others will suffer heavy losses (e.g. construction) but most people will continue about their lives while hopefully saving some money and spending more prudently.
Click to expand...

I'm seeing much heavier wipe outs. This is badly hitting friends and acquaintances in professional classes such as architects, attorneys, journalists, doctors, etc. -- fields that had been pretty much immune to past recessions. We're talking loss of jobs and businesses folding up. When they stop spending, most areas of the economy retreat. Sure, Campbell's Soup continues to do well, but any type of business supported by discretionary spending gets hit really hard, and so do those businesses that cater to other businesses. And even government (except the federal govt) is affected because tax streams dry up and there can be no deficit spending. So all this is why economists such as Krugman are calling for massive deficit spending by the federal government, but even so, they see a very rough road ahead until things turn around.
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This is one time when I am glad I work (indirectly) for the federal government. No year end bonuses, but at least the money does not dry up (down the road, who knows?)...
 
Well, uh, Chateau Latour is up for sale.

The S and the fan have met, spoken, radiated off each other, etc.

I mean, well, Chateau Latour is up for sale.

You would think $12,000 a case wholesale was a license to mint money right? So Latour would be an asset, right? Guess not.
 
Well there's still a lot of cash out East. It's hitting the economies here really badly, and the financial sector has taken several body blows (I've never seen the mood this grim in Hong Kong, for example), but there are still eyewatering amounts of cash being held by various governments. I'm not in a position to make prognostications but am thoroughly fascinated by what's happening.
 
originally posted by Levi Dalton:
Well, uh, Chateau Latour is up for sale.

The S and the fan have met, spoken, radiated off each other, etc.

I mean, well, Chateau Latour is up for sale.

You would think $12,000 a case wholesale was a license to mint money right? So Latour would be an asset, right? Guess not.
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Some possible reasons, not directly related to Latour's profitability:
--need to raise cash as more liquid assets drained out of the bank
--assumption that it will decline in value in the short-medium term and might as well sell it now
--miscellaneous accounting gimmickry
--some fat cat's bonus depends on it
--luxury wine property not considered politically correct asset for an investment bank in these times
--panicky assumption that Latour sales will plunge so much as to become a cash drain.

Curiously, it seems to be typical that when bankers freak out, they freeze up or discard many of their most profitable or reliable clients and deals. You'd think that when their other investments and loans are underperforming it would be the opposite. But maybe I'm missing something, it's not my business.
 
I believe that Latour is owned by one Francois Pinault (owner of Gucci, YSL, Rene Engel, others) as of this time. Perhaps a bank has some share of it and I am just ignorant of that fact?
 
originally posted by Levi Dalton:
I believe that Latour is owned by one Francois Pinault (owner of Gucci, YSL, Rene Engel, others) as of this time. Perhaps a bank has some share of it and I am just ignorant of that fact?
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It's owned by Artemis, which Pinault controls. My understanding (based on nothing more than rumors and logic) is that Artemis needs cash (probably assets securing loans fell below certain valuation), and so Pinault needs to sell some assets. Question: is Engel on the block, too?
 
Curiously, it seems to be typical that when bankers freak out, they freeze up or discard many of their most profitable or reliable clients and deals. You'd think that when their other investments and loans are underperforming it would be the opposite. But maybe I'm missing something, it's not my business.
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While I am not a banker, I think the idea is that when bankers freak out the price of risky things falls a lot more than the price of less risky things; if you need to raise money it's easier to sell the less risky things.
 
originally posted by Cole Kendall:

While I am not a banker, I think the idea is that when bankers freak out the price of risky things falls a lot more than the price of less risky things; if you need to raise money it's easier to sell the less risky things.
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May I give Cole's cogent analysis my banker's imprimatur? There you go, Cole.
 
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