Tan Kin Lian's Blog: Wall Street Journal: 1937 vs 2010

Saturday, July 10, 2010

Wall Street Journal: 1937 vs 2010

Read this article.

My observation
The chart suggest that the stockmarket may be headed for a steep fall, if 2010 follows 1937. The extent of the fall is another 35%. Is this likely to happen?

I belong to the pessimistic group - and believe that a second dip is likely to happen. The government debts ins Europe, USA, Japan and other countries is serious and needs to be corrected. We can muddle along with government stimulus and low interest rate, but it will create problems, i.e. asset bubbles,

Read this article by Nobel Prize winner, Paul Krugman. I agree with his view on most matters, including this assessment. He speaks plainly and honestly. Listen to him.

7 comments:

Anonymous said...: If Mr. krugman is right, who is going to pay for the continueing deficits to achive expansion in economy?

Maybe the problem is in the GDP number. Maybe The World can not afford the spectacular GDP growth in the 20th century. Maybe we have been living beyond our means?; July 10, 2010 9:02 AM
confused said...: Mr Tan, there are many notable economists, analysts who have spoken their views about depression, deflation, inflation.

Its all greek to me.

Could you help make things a little clearer?

A) How will deflation affect me?
B) Will I still get my nasi lemak?
C) Will this all happen 'silently'
D) What happens to my CPF?

They all speak in such broad terms that only people like you and academics can understand. If we, the common people, do not relate to what is happening or going to happen, what is the point of printing such opinions from esteemed scholars and practitioners of financial wizardry?

Help make sense, please.; July 10, 2010 10:33 AM
Tan Kin Lian said...: Reply to 10:33 am
Search google for the answer.
Or attend a course on economics.; July 10, 2010 10:35 AM
Michael said...: I am not an economist. But from a layman's point of view: It seems that this world is now largely dominated by two so-called ' Superpower' nations namely the United States of America and China. If these two elephants can manage their relationships well, many unnecessary problems or frictions e.g. trade frictions, currency manipulation accuses will be avoided and resolved in due course. My recent two months' tour of China, I spotted the positive developments in two areas, firstly, the Chinese government has been spending (billions of dollars) heavily in their infrastructures and education - the productivity boosters. Many young Chinese understand that for China to make further significant progress (to better than 'betterer' and eventually a 'betterist'), the rule of law is paramount important factor. The high level of awareness of the people is a powerful tool for any nations that aspire to becoming a 'First World Country'. Hope that we can be more optimistic if the outcomes work out well as mentioned.; July 10, 2010 10:37 AM
Unconcerned said...: Exactly what I suspected.
No answers to any of these theorists.

Live our lives as per normal
Ignore the problems in EU,USA, Japan

If Governments agree that stimulating their own economies by spending money ( such as SPUR,Job Credit ) is good, then so be it. You & I get to attend courses at very much discounted prices!

If Governments agree that tightening their spending is good (such as reducing budgets for health, education or capping bonuses for bankers ) then, so be it. We will see lower property prices and higher interest rates.

As far as know, these are the 2 contrasting views held by different school of thoughts on how best to manage the world's economy.

Since what ever I do, it makes no difference anyway, so I support neither and live life normally, which is:

Eat my Nasi lemark
Ignore the CPF

silently or loudly, it does not matter and I still buy shares from the SGX, I still put money in my bak account ( which pays 0.01%) I still go for holidays, and I still drive and spend within my means.

Paul Krugman, Lee Hsien Loong, Confucious, Warren Buffet..? ignore all of them and enjoy life
You'd be better off if you did!; July 10, 2010 3:03 PM
Createwealth8888 said...: I have been following the charting for

2006 - 2010 vs 1928 - 1936

http://createwealth8888.blogspot.com/2010/07/dow-great-depression-20.html

Not so scary as of now; July 10, 2010 5:05 PM
Anonymous said...: "those who cannot remember the past are doomed to repeat it" George Santayana, a Spanish philospher.

If the past was so bad, we would not be here today. Our parents never found each other because they were too malnourished due to the poverty and hardships of the Great Depression.

The stock exchange would not exist as we know it today. Microsoft and Singapore Airlines would not be founded due to lack of funds and venture capital.. since there would be total collapse of currencies etc.

Bio-diesel fuel, nuclear energy would remain in the heads of people and never see the light of day.

Sure, economic turmoil will happen.
but the human spirit, ingenuity and innovative ideas will prevail.

Live and live fullest.
Do not be concerned about wealth in terms of $$$$$$.
Mankind survived the Depression
mankind survived world wars
mankind survived Kyoto earthquakes

what is a 1000% drop in the S&P??
or Dow Jones? I could not care less.; July 10, 2010 7:53 PM