amanda more

In any kind of troubleshooting it is very helpful to do this: A- B- In fact safety analysis involves a kind of simulation. Assume A happens what is the result? But if B happens what is the result? Further on topic then: "The problem is, it’s completely backwards. The “disagreeable medicine” Cooper suggests is budget cuts, including cuts in entitlement programs like Social Security. But that has nothing to do with the problem she presents at the beginning: slow economic growth. Anyone who is reading this blog already knows that budget cuts are contractionary in the short term. The “medicine” the economy needs now is more government spending, not less, and there’s nothing disagreeable with putting more people to work and building more stuff that people want.*" This is from James Kwak http://www.economonitor.com/blog/2011/08/barack-obama-and-harry-potter/ So, contractionary means a decrease in the economy- recession. The classic lesson or science from The Great Depression means that having government spend less makes a depression worse. Simple. Eighth grade economics. There is this odd thing in science where as great as it is to define the past and present to be really useful one wants to know effects and consequences. You will get no argument from me that it is a crystal ball having inherent difficulties. Yet, science has this history showing it has been effective. Why is the stock market going to crash? Idiots tank the economy over wild unproven rhetoric versus studied history and science. Economy tanks, stock market tanks.

Discussions of economics are so very,very rarely based in reality. But now shock jocks and cheerleading style groups develop really crazy stuff. I suppose that can be a reason the economy tanks. Even if imperfect, views of reality are a bummer.

Aberrant B cell receptor-mediated feedback - A feature of human autoimmune disease is that it is largely restricted to a small group of antigens, several of which have known signaling roles in the immune response (DNA, C1q, IgGFc, Ro, Con. A receptor, Peanut agglutinin receptor(PNAR)). This fact gave rise to the idea that spontaneous autoimmunity may result when the binding of antibody to certain antigens leads to aberrant signals being fed back to parent B cells through membrane bound ligands. These ligands include B cell receptor (for antigen), IgG Fc receptors, CD21, which binds complement C3d, Toll-like receptors 9 and 7 (which can bind DNA and nucleoproteins) and PNAR. More indirect aberrant activation of B cells can also be envisaged with autoantibodies to acetyl choline receptor (on thymic myoid cells) and hormone and hormone binding proteins. Together with the concept of T-cell-B-cell discordance this idea forms the basis of the hypothesis of self-perpetuating autoreactive B cells.[14] Autoreactive B cells in spontaneous autoimmunity are seen as surviving because of subversion both of the T cell help pathway and of the feedback signal through B cell receptor, thereby overcoming the negative signals responsible for B cell self-tolerance without necessarily requiring loss of T cell self-tolerance. This is from wikipedia autoimmunity http://en.wikipedia.org/wiki/Autoimmunity One thing I may have misunderstood. In this example we probably all have the Lupus bcell somewhere in our bodies- some bcells who remain activated and don't quiet. Those who have Lupus though have more of them. Anyone have a handle on this?

This is a hard concept. If off balance sheet transactions are allowed then it doesn't take any collusion to keep them off. SAP, standard accounting practice. The derivative market is a dark market. This means they don't have to report how much they owe. This means liabilities are distorted that are shown in the report. Like any Ponzi scheme, it works until it doesn't. Beating the market seems like a doable goal. Yet crashes take down everyone. There are ten year runs where a portfolio of blue chips never recover their price. You can lose much of your principle. Using horse racing analogies, logical difficulties are apparent. All of the sales-speak Americans have become accustomed to is dangerous. I just thought of another reason for a stock market crash. Next reason: This is more a question than a reason. Because they are lean and mean do companies actually make goods and services or are they relying on contractors? That may mean they are vulnerable to the contractors increasing business without them. I do realize Goodwill is huge but is it truly "bankable"? So some math. 1000 dollars. remove 200 dollars You will have realized a loss of $20 from where it was. The market tanks 50%> Now you have $1000 - $200= $800 . That $800 is now $400 + $200 = $600 If you haven't removed it then $400 + 1/2 $200 = $500 So,a scenario believing all is hunky dory with no underlying rotten fundamentals and you would have lost the $20 as the market "corrects itself." But for proposed scenario you will have $100 more than you would have had if it does tank. The concern in scenario 2 is this is bad news. Odds are that $500 is going to be needed more as more of the economy tanks. This means the paper losses are more likely to become real losses as that money is needed to say, eat. Historically there have been ten year periods of no recovery. The flight to treasuries will keep interest rates down. But when they are at 5% and even if the current market is 14% the average run is 6%. That means the stock market player is risking his principal for a mere difference of 5% to 6%. That is truly a suckers bet. So in keeping with the topic. People ignore the math until they can't.

The profits and P/E ratios are only as valid as CPAs and the rules makes them. What happened with Enron was hocus-pocus with numbers. Lying is currently legal on the numbers. Disclaimers are found in the English of the financial statement which was the only requirement resulting from Enron. I am thinking the current drops. ups etc. are independent of the above, though. Look to the end of the current year long delay to open up off balance sheet numbers to cause real intensity. Overseas they talk percent. Selling after say a 2% drop is a stop/loss strategy. Selling after the crash is as you say.

I work in technology so I'm not a complete Luddite. There is a vast experiment underway where we are exposing ourselves to a chemical soup. Here is one study: http://ccceh.hs.columbia.edu/pressreleases/press042111.html Herbicides should be safer. Still, how odd responsible people using bug bombs to keep a roach free place inadvertently harmed their children. I wonder if heat can be used without causing flame making it safer for those standing on wet ground. A bunch of weeds were just pulled from my yard. That is a pain. I have never had chemicals on the yard but did do a few bug bombs inside years ago.

I think your posts are excellent and you have provided several answers to the question. This is tiring I know but this works as tree,forest,ecosystem. With dozens of answers to this question there is also which one occurred at what level of this hierachy. Say one answer is that the bad economy tanks stock markets. Yet, as you have pointed out,it is so much more. Certainly, if I was on here doing something really useful, I would have bought on margin. The Nikkei is down right now.

iNow, honest rhetoric has long been squished by those jazzed by wild eyed junk taking lots of bandwidth. Yes, it smells of that and so I am so hoping it is wrong. The underlying rot is a real reason. The stock market would inevitably crash. So that apparent wild eyed stuff just points for a way to have cash by timing the market. Should they stop the delay and open up the dark market of derivatives that is 1200 trillion dollars worldwide. Over $120,000 for every man, woman, child. Too bad I just don't have the makeup for all the fictional stuff. It must be great for those who can be soothed by recreational fiction wrapped up as real. Alas. So balance sheets are currently a fiction. Check "The Warning" on frontline. The off balance sheet transactions are the 1200 trillion dollars. Reason number whatever: The underlying rot of derivatives cannot be held back any longer from the light of day which brings to light that the companies are not profitable as their liabilities exceed their profit causing acknowledgment by the financial guys and a run away from stocks.

The bog boys are out. You are right. But millions have salesmen/brokers BSing them into the long haul. http://online.wsj.com/article/SB10001424053111904480904576496552754467380.html?mod=WSJ_hp_LEFTTopStories Another reason: The big boys do use stop/loss and get out.

Please,please don't be true. I am too discouraged to google it. Really could it be that the House majority leader put cash into a hedge fund that (and I have read nothing) that was doing Margin trading. So my reason number 3. Why is the American Stock Market going to crash? Because the politicians knew bringing the debt ceiling to the brink would crash it. May. The stock market I firmly believe does make 6% a year as it has for the last 100 years. This was when America was up and coming. Still unless you plan on living forever, it may not recover in your lifetime. The lottery prevents you from losing more than 50% here again assuming a lot of betting over many years. 4th reason: Why is The American Stock Market going to crash? Sales pitches that have lulled smart but not entirely flush players to risk their life savings because of the marketing hype that it is investment which sounds like savings. Its not. It is a bet and every three years or longer everyone realizes it. So your turn. There have to be hundreds. Anyone for the topic? iNow What is high?

Eureka. I think I have my book concept. http://www.cxoadvisory.com/2231/individual-investing/genetics-of-investing-not-algorithms/ First glance is rudimentary. But from that wonderful graph it looks like this. Suppose you are pretty much broke and have few assets. In general,let's imagine vice is independent of IQ. Those who have the highest IQs still dump their paltry assets into the stock market. So the reason that those one discusses the market with find it especially emotionally charged assuming they have decent IQs is because they are overextended. The next reason the market will crash: "Just as the lottery has been rebranded a game, the stock market has been rebranded not a risk but an investment." So, then wakeup call. "Oh,no. It is folly." Crash. A crash will be 50%. Sell. Half of your investments. The balance sheet is fiction. No changes after Enron. Off the book liabilities are huge. (<and another reason)

Check this out. Assuming it means that even low income smart people have participation in the market which would show a greater risk compared to their assets- smart people gamble on the stock market! Not all purchasing is a gamble of course. But first glance looks that some of it is. All vices appear to me independent of IQ. So in that way understanding that high risk tolerance is gambling then high IQ also bet. No wonder people get so emotional when you tell them the stock market will likely crash tomorrow. It is money they can't afford to lose. http://www.cxoadvisory.com/2231/individual-investing/genetics-of-investing-not-algorithms/ Cool,huh? This may be as simple as the sea change propaganda that has allowed gambling-lottery to be seen as a game and gambling-stock market to be seen as an investment. Hey the lottery only takes 50%.

Scientists and technologists can. In fact they can speak math. I'm not saying all should do that. Instead of us having to put things in language, English why can't they (the other half) at least learn to understand the baby speech of probability? You also made a comment about logical thinking. So a tea partyer say who explains calmly some weird party line feels as if he is being logical. He is calmly explaining and seeks to give that impression. The impression and comraderie is so important he recoils at being called on it. He finds -logical thinking- a hindrance. Hence if logical thinking impedes goals then that is why many avoid it? Or are their brains set up so they can't do it? Have you met any over 160 IQ types who doesn't do logical thinking? I'm thinking there have been dictators who are smart. What comes out of their mouths may not make logical sense. I assumed they are being duplicitous. But maybe not. So, is there a way to explain to a 3 year old my example of a lottery that could be understood? I started to ask around about the lottery for the basis of a book I want to write. If I can't explain this simple example, I'm stuck.

Thank you. I'll either dig out my own or check out one of these. "Probability is often not intuitive and goes over the heads of many more. " I think people do use probability but don't think of it in math terms. I think if they did think of it in math terms their odds would be wildly off. Yet, they have a feel for risk to get through life. Crossing the street. Necessary but needs vigilance. Crossing a sidewalk. Not as much vigilance etc. In fact some streetwise kid can beat out an absentminded professor every time. They can pass 8th grade probability. So majority intelligence is good enough for that. As I am finding today, in our economy everyone is blinded by money and decisions about money. Lawyers and journalists are by and large not stupid. Yet they generally can't handle arithmetic. Why?

It doesn't matter if it is chicken and egg. If the American economy is deteriorating then the stock will absolutely go down. The only question is when. I just found out the multimillionaires that hang out where I do have been in cash for several weeks. As Republicans they had to have some insider information on that. So, treat it as a theoretical question. If the stock market was going to crash tomorrow what would be the reasons? 401Ks have a mechanism to choose investments. So maybe it is treasuries instead of an account but one can angle it for FDIC insured or government backed. Don't worry my pretty little head about it really? Check out PBS online or google it. Ask any Wall Street guy that isn't selling you something. It works on emotion. And now is actually high. It turns out when it is your money (the people on this forum) and losing actual cash is eminent. What do we have? Emotion. The market is forward looking meaning it is not as it is but what people think it will do. Again emotion. Beyond that what are the fundamentals that are tanking the economy and the market? I don't need any particular order. I'll go first. "You can't have an economy based on a nurse, a doctor, a lawyer and a teacher." ie Destroy manufacturing then an economy tanks.

Now that is is eminent it does seem it was inevitable. We can see how deeply horrible the economy is. Unless you are in Washington DC. But Wall Street has to have known it. I am currently resigned that it was only a matter of time. Have you moved your 401k out of stocks? If not-why not (there is no penalty for shifting investments) Still what are the reasons the street and the country are crashing? I can think of factors- can you?

Now I understand. As long as you (not individually let's say one) As long as one can parrot the dubious bull that one's golf buddies continually repeat then wow- now you are (one is) not emotional. With your (oops one's) buddies on one's sides it has been sanitized. Cleaned. Made pristine and oh so pleasant. Form a party. Enjoy. You have excellent posts. I suggest though that the current state of affairs does not profit from pleasant violin music. A certain drumbeat may be considered possibly appropriate. Certainly. I think it is brave to call ridiculous claims out. It isn't like you (now this means you) are going to be facing tanks over it. I'm currently hearing "brinkmanship" and all kinds of gobblygook Washington DC terms that I think no one who keeps saying them even understands the meaning of. So let's define it in terms you (here you) find totally inappropriate. Brinkmanship = smallminded Good Old Boy deadly Gameboy-style gameplaying chicken, endangering with heartlessness the wellbeing of all concerned and especially you and me. (you all and me) Sanitizing in dispassionate third person will prove more effective for any who have difficulty with understanding. A suggestion might be made to meet halfway and allow a little writing flare from the direction from which things are considered on the part of very lucid posters such as iNow. As far as lacking style- right back at ya. Plus I failed to quote again and used the same words sent to me. Curious- have you moved your stocks in your 401k to FDIC insured? By the way I have an interest in the question Why is the American economy deteriorating? My interest is peeked by immediate current events.

I guess history will tell. I think the underlying poor financials that are fudged in such a wholesale way have to collapse like the Ponzi scheme it is. So the clueless drones can be seen as causing the time of the collapse but not the underlying rot. Come to think of it- follow the money. Someone just sold short and they are about to reap a huge margin call. I'd look to the hardliners in Congress. Who funded the Tea party? After all you don't think wealthy Bin Laden types kept their money in as they sent off the 9/11 group? That was a very predictable outcome. This may have almost been as predictable a bet. I'd also check who is invested in Standard and Poors and then would be running it. Difficult? yes, a bit. But taking over aircraft wasn't a piece of cake.

I guess I am trying to show how to tell the truth with statistics. At least with the lottery example. Is it because those exposed to numbers in this country are suspect about any math and rightly so? Is that why they cannot speak even the equivalent of a pidgin style of math? I appreciate the efforts to explain here. I'll source the book.

That is a good point. We also don't have the reserves of cash which can be unleashed when war spending crashes. I am wondering just how much corporate interests are foreign corporations. So when policy is effected by corporations how much interest do they have in well being of Americans? What American companies are there? For producing type companies there is Exxon, Darden, Ford, GE. But most of the rest are military industrial guys. Follow the money. Who benefitted from holding the debt ceiling hostage. The good jobs around I've seen are the military industrial ones. I think those have a huge multiplier effect.

Let's consider three levels. The tree, the forest, the ecosystem. The answer to why is the American economy deteriorating? could better be discussed on the forest level. Bouncing down to the tree level, may provide great data but does little to answer the question. Continuing to escalate it as a purely political question influences people to leave logic behind. It doesn't have to be math or politics. Just as hurricanes can be discussed scientifically so too can economics.

Any books on that? There are many very odd things happening now. In anyones personal life, I don't find that intense logic helps very well in day to day life. A well developed EQ appears to provide an easier time of it. I have found the very disturbing gamemanship in Congress to have had no logical basis. This stuff must be a symptom of an underlying malaise. Could fear cause people to lose their heads? Is there an example to use where people can find probability more intuitive? There are the scientists/technologists and the everybody else. The "everybody else" runs this country. They are ignorant of even the most basic "words" in the language of science - math. Could this lack be one of the root causes of what appears to be crazy behavior? They can't understand arithmetic and so cannot understand the effects of their behavior?

I am unsure how to explain this. I want nonscientists to understand the absolute basics of probabiliy. "Assume a state takes in 100 million dollars. 50 million is kept by the government ." "I understand that> I know the lottery makes money for the state. Then I ask so "when a $1 lottery ticket is purchased 50 cents goes to the government." 9 out of 10 lottery players find this goes over their heads. Why? Am I actually using some kind of sophisticated theory here?

The wars actually employ people. We are in the toilet even with a wartime economy.