Sunday, March 15, 2009

Where are we in this cycle?

- I believe 2003-2006 were the years of economic "thrill" and "euphoria", brought about by easy money, cheap credit and the housing bubble.

- "Anxiety", "denial" and "fear" were all likely crossed in 2007 - fear being reached during the 2007 global credit seizure.

- One could then argue that 2008 was the year of desperation and panic brought about by unprecedented foreclosure rates, collapsing home values, cratering stock market, credit collapse and significantly increasing unemployment figures.

- What about today? My thoughts are included in chart.



So what do you think? Where are we in this cycle?

20 Comments:

At 3/15/2009 2:56 PM, Blogger FOFOA said...

Very interesting Randy.

Your timing is probably correct for the few in the know, like yourself and possibly Wall Street. But for the system at large, I would look to the average Joe.

For him, I think Euphoria extended all the way to Summer '07 when Jim Cramer had his seizure, possibly October '07 when the markets peaked. Joe is always a little behind the markets.

Anxiety went all the way until July 15, '08, then Denial until Sept. 15, '08.

Then Fear started. I think we are currently at the end of Fear and the beginning of Desperation, as we watch Joe embrace his new socialist self.

I think Panic is yet to come and Capitulation will take the Dow much lower. Perhaps we see Panic starting next month and Capitulation by Summer. I do not know, but I suspect.

Despondency by early 2010, Depression for a while and Hope to hopefully emerge by June 2011. Based on cyclical timelines described by Jim Sinclair, Martin Armstrong and others.

FOFOA

 
At 3/15/2009 3:11 PM, Anonymous rickster said...

Yes, it seems about right. But that is for this part of the unfolding mess. Look how long the Great Depression ran, and the down, up, down they went thru.

BTW Randy, are the resort deals in Vegas kicking in yet. Thanks for the site.

 
At 3/15/2009 3:18 PM, Blogger Russ said...

Good graph. I believe that the big thud! will come sometime this summer when the reality bomb goes off and people find out that trillions of dollars have been replaced with IOU's and the "I"'s have no money.

 
At 3/15/2009 3:24 PM, Blogger Randy said...

I hear that room rates are falling fast, but rarely look into it myself:

Vegas Hotel Promotions

Las Vegas Hotels—Travelocity

Vegas Hotel Specials

 
At 3/15/2009 6:12 PM, Blogger Jordan Greenhall said...

Lol, I think you have to extend the scale. How about putting 2000 at the apex? Or even earlier?

Which would put us now somewhere around "anxiety" or, more likely "denial". All you have to do is watch the CNBCs of the world to see denial in full force. Or talk to a neighbor who says "Yeah, I know its going to be bad, but I just have to hope that things turn around."

 
At 3/15/2009 8:04 PM, Anonymous Anonymous said...

WE ARE ONLY IN FEAR.

YOUR VIEW IS SKEWED BY LIVING IN LV.

ON THE EAST COAST, I'D SAY SOME ARE EVEN IN DENIAL. NORTHEAST THAT IS.

THE TIME SPENT IN EACH STEP IS NOT ALWAYS LINEAR.

 
At 3/15/2009 10:59 PM, Anonymous anon916 said...

I agree with the first poster, FOFOA. Fear has been with us for a while, and personally, I haven't seen any panic or capitulation.

Capitulation is complete and utter loss of faith and confidence in the system and markets. I believe the housing market will capitulate before stocks but there are many people who see this current housing bust as the greatest buying opportunity ever. However, once renting becomes so expensive that the only prudent option is to purchase a house, then the bottom will be in.

I think capitulation in stocks is several years away. The boomers will see a majority of their retirement money melt away to zero and the younger generation will learn to avoid stocks. Once this happens the stock market will be ready to begin it's next cycle.

Again, everybody sees the events unfolding through different lenses.

 
At 3/16/2009 3:17 AM, Anonymous Anonymous said...

How one feels about the current economic situation really does deal a lot with perception and attitude. I've taken the steps towards preparation, and having done that, I don't think I'm feeling very scared. It doesn't help that every day brings bad economic news, but proper planning takes the edge off of daily life.

 
At 3/16/2009 3:25 AM, Blogger Max said...

"You can't re-inflate the bubble".
Ron Paul

 
At 3/16/2009 8:27 AM, Blogger Craig W. Wright said...

I second the somewhere between fear and desperation sentiment.

 
At 3/16/2009 12:01 PM, Anonymous Anonymous said...

I'm in the Northeast -- and I agree with the between Fear and Desperation. We have not yet hit panic here by a good measure.

-Peruser

 
At 3/16/2009 6:02 PM, Anonymous Brian said...

I have to agree. I think Randy you are a bit optimitic. Even this weekend, the bottom callers were out in full force. Between Denial and Fear, if we are taking a poll. Either way, market has not hit 'the' bottom yet and you have a great blog, thanks!

 
At 3/16/2009 9:03 PM, Blogger donny said...

I think we are between denial and fear and there is a lot more to go on the downside.We are unwinding a 40 year bull market and this does not happen in a time span of 24 months.

 
At 3/16/2009 9:20 PM, Blogger Randy said...

All,

Thanks for your comments

Good points: I may be somewhat biased due to my location - ground zero for the mortgage/housing crisis...

With that said however: most Americans have already taken a 50% hit on their 401K's, have lost significant home equity, are concerned about future employment, credit lines have been shut off while interest rates on cards have risen, etc... I believe this has caused individual desperation and Panic - yet agree much more will likely come in the future (e.g. possibly from shortages, banking issues/crisis and/or social unrest).


Brain, Completely agree the market bottom has yet to be seen, yet (as I'm certain you know) the markets are extremely oversold and ripe for a nice rally - before they plunge to much lower depths.

 
At 3/17/2009 8:16 AM, Anonymous jerry said...

Here are the 2006 wealth demographics in the US from my figuring: those at the top of a three tier scale amounts to 80 million. The middle group amounts to 12 million, and the bottom tier amounts to 22 million, out of 116 million households in the country. I got these figures out of Wikipedia. Remember, some of these households have two income earners. The top tier might have upper middle and lower rich earning two sets of incomes. The middle might not. One may be at home willingly, or unable to find work.

I might consider moving depression to the bottom of the Bell Curve, since depression is the most oppressive emotion. Then I might consider despondency also being placed under hope because after coming out of depression, one might feel despondent. On the downside of the curve, I might move despondency just under, and nearly touching capitulation. Anyway,

My feeling is that the top are in denial and fear.
The middle tier is desperate and in panic.
The lower tier is in a range between panic and depression depending on their situation.

 
At 3/17/2009 7:03 PM, Anonymous Brian said...

Randy,

I kept thinking about your las vegas housing graph today. i mentioned it 3 times in our trading room. I have to admit, those median home prices are getting closer to bottom. Most of country still has a ways to go and i dont know if we will have enough employed people left to fill homes even at the right prices? But Vegas is close to 1998-2000 levels and I think thats where we need to be. What i dont know, is if or by how much we will overshoot that. As with most bubbles, overshooting to the downside is very common. Lets see if this beast of a market can work its way up to 800/825 before options expire.

 
At 7/20/2009 5:24 AM, Anonymous Anonymous said...

Denial without a doubt. Most here are not worried but believe it will turn around pretty quick. Obrokema is still king.

 
At 11/27/2011 3:04 PM, Anonymous Oscar said...

This comment has been removed by a blog administrator.

 
At 1/10/2013 9:39 AM, Anonymous QUALITY STOCKS UNDER 4 DOLLARS said...

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At 3/28/2014 1:57 PM, Anonymous PENNY STOCK INVESTMENTS said...

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