Is a "Triple-Digit Dow" Inescapable?

BusinessWeek Online ^ | JULY 12, 2002 | Robert Barker

[TightSqueeze]

The biggest grizzly in the market today may be Bob Prechter. His latest book, Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (John Wiley & Sons, $27.95), is riding atop Amazon.com's list of best-selling business and investment titles. It describes a truly horrible future for financial markets and society.

[TightSqueeze]

Bob Prechter has been crying wolf for years, is he finally right?

[truthkeeper]

What do you all know about this guy and his theories? Any credibility here? Very interesting, to say the least.

[TightSqueeze]

He influenced me to get out of the market in '99 a little too early but intact, you can check him out here;

http://www.elliottwave.com/

[B Knotts]

He predicted the same thing in 1995.

Oops.

[Nick Danger]

Triple-Digit Dow

Why not double digits? Hell, why not zero? If we're going to have a media orgy of gloom and doom as part of the Democrats' re-election strategy, let's go all the way.

Prechter is hardly the only long-term bear out there to go interview. There must be hundreds of sky-is-falling doom-and-gloomers to put on the front pages of the news magazines between now and November.

And what's all this concentration on business and finance? Isn't there something scary and awful that's going to happen to the chill'run? How about polio! Here's an idea: let's have a polio scare! After all, a lot of people don't read the financial pages, and when they hear the word "accountant" they tune out. So it's polio for them.

Are the airlines really safe? What about the food? Can't we have some scare stories about food? Maybe there could be hormones in there turning us all into ducks. And air! People gotta breathe, let's have something awful happen to the air. There could be Islamic Neutrons in it, put there by terrorists. Every time we breathe, we're a little closer to death.

And it's all Bush's fault.

[Wm Bach]

If you put all your wealth into cash, and inflation
sorta "happens" then all that cash you've hoarded won't be
worth very much. You'll be carting wheelbarrels of it
down to the store to buy a loaf of bread - that or burning
it for warmth.

[mc5cents]

What I've been saying is that the decline that has already begun is along the lines of the bear markets of 1929-32, 1835-1842, and 1720-1722. Now those were in the range of [down] 70% to about 97%.

Hmmm. What is that old saw about a stopped clock being right twice a day...

Keep preaching doom and gloom and pretty soon you may be called a prophet.

[TightSqueeze]

And it's all Bush's fault.

If Prechter is half right, Bush like Hover before him will suffer the political fallout of economic bad times. His father was defeated during a time of mild financial upheaval do you believe that history will not repeat, and if so why?

[GraniteStateConservative]

That's the strategy. I realize that valuations are high, but I just don't see how we can have all these technological advancements people are working on (cloning, cures for diseases, atomic supercomputers that are the size of a penny, etc.) that come out every day and then for us to end up in a Depression. It just doesn't make sense to me. I can think of a million ways that technology that doesn't exist yet could improve productivity-- and people are working on that technology as I type because there's a demand for it. Even the technology we have that improves productivity-- integrated office systems of copiers, computers, FAX machines, and printers that let you have more paperless offices without filing cabinets and manila folders (and people maintaining that 20th century system) for example aren't ubiquitous yet. Each passing day increases the number of offices that waste fewer resources (human and non-human resources) and that has to help the economy. I thought having computers to monitor inventory was enough to limit the supply and demand issues that lead to a Depression.

This guy is just a pessimist. That's all. It's really scary to think that the Democrats want a Depression because of political gain and that the media is happy to help them out. Democrats and the media are domestic terrorists of the highest order-- more dangerous than folks like Atta ever were.

[TightSqueeze]

He predicted the same thing in 1995.

Yes he did, in his book 'At The Crest Of The Tidal Wave', seems that the only thing he got wrong was the timing, who knew in '95 that Greenspan & company would flood the market with dollars thus expanding the bubble beyond imagination?

[CWRWinger]

Are the airlines really safe?

No. Even before 9/11, I had concerns about the infastructure of this nation. My first concern comes from socialism absolutely destroying free enterprise and its ability to function. Government macro and micro-managing of business along with a tax structure which punishes achievement, has cut profits and forced business to compromise on safety.

My second consern comes from the dumbing down of education. We have already passed the point where the USA no longer has the ability to manufacture things because the talent is not therein sufficient quantity to stimulate growth.

We have raised two generations which believe someone else will carry the load and if not, government will make the producers in this country carry the load, whether they want to or not.

It's going to be payday someday.

[TightSqueeze]

What do you suggest?

[SteamshipTime]

"Elliott Wave Theory" and "technical analysis" sound more impressive than augury and stargazing. But they're not as reliable.

[dennisw]

He was saying the same in 1990.

[GraniteStateConservative]

Nick isn't saying that Bush won't be blamed for a Depression and be defeated by Hillary in 2004. He's saying that the Democrats and the media have discovered that they can kick an economy when it's down to keep it from standing up and fighting back. They also can blame Bush for other things, too, which aren't his fault. They can create self-fulfilling doom-and-gloom prophecies, as well. If they can terrify the American people, then the country will stumble and they will get closer to their socialist utopia. They are evil scum. They are terrorists and should all be in GITMO.

[TightSqueeze]

That's all. It's really scary to think that the Democrats want a Depression…

People see what they want to see, I don’t know anything about Prechter’s politics but he is a fiscal conservative of the first order.

[GraniteStateConservative]

I'm not saying that he is a Democrat. He's a pessimist who always talks about the bad times and now that the bad times are here, he's a prophet. There are plenty of sour-faced conservatives. He'll be a pawn of the Democrats' and media's aims.

[TightSqueeze]

Democrats and the media have discovered that they can kick an economy when it's down to keep it from standing up and fighting back.

Some here might buy into that poppycock but it would be foolish to attempt to use Prechter and Elliott Wave Theory to make that case.

[Nick Danger]

do you believe that history will not repeat, and if so why?

I spent several years with a company that does econometrics and statistics. I learned three things: (1) the future hasn't happened yet, (2) no one knows what will happen when it does, and (3) you can make a computer model say anything you want.

[grania]

We have raised two generations which believe someone else will carry the load and if not, government will make the producers in this country carry the load, whether they want to or not.

It's going to be payday someday

I spent the summer of 1968 in a city (Boston) and the mood was truly frightening. With war dissent, demands for more equity in education leading to busing (instead of spending the money on improved schools), protests bordering on riots, overextended police, rigged political contests excluding voices for change, there was no confidence in the future.

Some people chose not to have children. Some others brought children up with survival skills, and moved to places where they were self sustaining. Others stayed in suburbs and universities and the political mainstream and told others how to lead their lives in the perfect world they would create, and decided to micromanage and globalize everything.

I'm one of those people who remembers the '60s. And the fears back then. And know people who are still affected by their VietNam War experience (those that are still alive).

What do we need? Well, maybe "smaller is better", in some things. Maybe we have to look at ourselves, our neighbors, our towns, and solve things from there. And the spoiled ones, the sons and daughters of those who never really experienced this, well, they're going to have to make a living honestly instead of off others...maybe they're actually going to have to learn how to survive from doing honest work that accomplishes something.