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by numair 6323 days ago
You are ignoring rule #1 in the financial world: "Past performance may not be indicative of future results."

Don't worry, the entire financial world ignored this rule as well (which is precisely why I think this is likely to be a long downturn - rebuilding financial infrastructure is a long process involving lots of time and social work; you can't simply legislate it into being).
2 comments
fiaz 6323 days ago
I'm actually saying that the rule you have stated above holds true even more so if we take into account the high availability of actionable information. Take for example that with "TARP 1" all sorts of irritating loopholes were exposed in a very short period of time (how long did it take for the general public to be informed of the tax exemption for a specific type of arrow used by child archers??).

I want to emphasize that what I'm stating is that in the past, when critical changes took place, it would be some time before all of the information/knowledge of those changes propagated to everybody and this had an impact on the economic cycle (how long or short they were). In today's "Internet Age", the time it takes for changes to propagate is going to be reduced dramatically.

I should add that a direct consequence (and this is purely hypothetical but not unreasonable to include) is that the volatility of the economic climate will increase with the availability of information.

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kingkongrevenge 6323 days ago
The accessibility and volume of business data have been accelerating for over 100 years. Downturns have not gotten shorter. I see no basis for your hypothesis.
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nostrademons 6323 days ago
It seems like everyone involved - homeowners, banks, corporate executives, the government - has an incentive to drag this out, so that this quarter's results won't be as bad as they otherwise would be. (Or in homeowners' case, so they don't end up on the street.) Why take some pain now when the rewards will likely go to your successor?
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baguasquirrel 6323 days ago
If I poke you once each day it would probably be annoying, but you would keep on going on with what you were doing. But if I shot you with a .18 derringer, it could get serious.

Also see "livelock".

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