Black Monday Hysterics or Is This IT?

[vexed87]

http://www.independent.co.uk/news/uk/po ... 69509.html
I can't believe this, probably scare mongering/trying to shift papers, but I'm making sure I stop by the ATM on the way home just in case

[tonyedgecombe]

Damian McBride is a scaremongering arse-hole, the world won't end just because stock markets drop in China, a market that represents a small fraction of western countries exports.

[Hankaroundtheworld]

Haha, it seems he is part of the "Preppers" movement, they are predicting the end of the world already for a long time (or as they call it SHTF), and then everyone needs a BOL (bug out location) with a BOB (bug out bag with 3-day food buffer and tools) to get to the BOL with a Transport strategy how to get there. Should you believe these SHTF scenario's? A lot depends if you are only looking at the negative trends in the world (slow or no growth, monetary currency collapse because of debt bubble, end of cheap resources, collapse of bio-diversity, climate disasters, 3WW because of power changes in the world, etc...). There are also positive trends, especially on Technology level, that might solve some of these negative trends.

[cmonkey]

There has been quite a bit of emotional steam building lately and it was inevitable that it would blow off sooner or later. It's quite amazing how we shift back and forth between the myth of progress and the myth of apocalypse so quickly within social circles.

[cmonkey]

Interesting fact - today marked the record for the largest intra-day swing in Dow Jones history.

https://en.wikipedia.org/wiki/List_of_l ... al_Average

We'll see how the close fares.

[Ydobon]

Another -8% day for Shanghai

[thrifty++]

What an Ahole this guy is. He makes out like it would be an apocalyptic event.
I have had a gut feeling (but also based on several logical factors) that things were going to turn sour about 2.5 months ago. I immediately put the handbrake on all investing thank god. My investments have collapsed in value. Sucks as I had only just started investing for the first time in my life for the preceding month. So it turns out I bought at the peak. Bugger. Hopefully it does not take too long to creep back and luckily I have only invested a small proportion of my cash.
I am in NZ and I think NZ will be more impacted by China's impending collapse. It seems the commodities economies will be most affected which have been selling products to China - NZ, Australia and Canada. Unfortunately for NZ, China and Australia are our biggest trading partners. IM just hoping its not too long or severe. I would not be surprised if it was equivalent to GFC (which downunder we really were not as much affected by) but doubt I would be anything like what this A hole is saying.

[vexed87]

thrifty++, I wouldn't be so quick to judge. I won't pretend I know anything about this chap or his motives, but he is making ordinary people reflect on their reliance on cash, electronic banking and their respective financial institutions. Making people think about cash food and water can't be a bad thing. Prepping mentality is ridiculed in the UK, and he's taking a hammering on twitter, which is not unexpected. Most of the general populations would ridicule frugality and ERE in a similar way.

Just look back at the Greek situation a couple of months ago... The ordinary people of Greece certainly would have been better off if the they had cash reserves at home when capital restrictions were imposed. There were a lot of elderly people being forced into the mid day heat to queue at banks to collection their pensions in order to buy food. For some an event like this would be minor inconvenience, for others potentially life and death. That wasn't even a total collapse of the global banking system, just a localized problem with a simple solution (political and economic reform). Obviously the Greek crisis was very different set of circumstances to what we saw in 2008, but capital restrictions in the face of a crippled financial system could be our new reality if our banks start to fail. It's not like it's unprecedented anymore.

I agree that recommending a run on the banks is not helpful but surely it's better to be one of the few who took the initiative than be left with no cash, food or water when the banks are closed for business! Bank runs will happen regardless as people start lose faith in their financial institutions, as has happened in 2008 and with every defunct fiat currency before our time. Things could get really bad for ordinary people. Most countries are more indebted than last time around, and our economy is in a worse position than 2008, most countries cannot face a rates rise and trouble is certainly brewing! Its obvious that leverage used to prob up the markets is worsening these crashes in the developing nations and realisation of a slowing global economy is a really bad thing, even for our own western economies. Who knows what will trigger the next crash or how serious it will be but having recently read the crash course, I'm bracing myself for the fireworks!

[Chad]

Genius at work...

https://www.youtube.com/watch?v=O3ZOKDmorj0

[jacob]

*** This thread is dangerously close to getting wiped out. ***

Lynching people on the internet, especially when they're not present and able to refute speculation, is poor form.

[workathome]

It's never a bad idea to have several months of food and cash available. I doubt anyone will actually predict when they really need it though.

[Tyler9000]

[jacob]

Uh oh uh ... did you enter the t-shirt business with an ERE fanboy/girl focus?

[Tyler9000]

If only I had. Someone beat me to it!

http://tinyurl.com/ozlbhpt

[vexed87]

I'm calling it now, the Lentil memorabilia bubble will end us all.

Interesting insight here on zero hedge about the turbulence in Chinese markets:
http://www.zerohedge.com/news/2015-08-2 ... y-crashing

[Hankaroundtheworld]

Somebody suggested to read the articles on : http://alt-market.com/ so I did:
Okay, the tone is clearly "fear creation" in all the articles, but if you read thru the facts on how debt, derivatives and other bubbles have increased since 2008, then it is hard to ignore that it seems that we have an economical/financial system that cannot be cured anymore, and that something has to change, some kind-of reset of the system (you can argue how dramatic that will be).
What I am trying to say: are we not fooling ourselves, should we not indeed have some "escape" plans ready, just in case, not to be afraid or anything like that, but instead of only focusing on how to reach 4% SWR and FI/ERE, we should also (so far as possible) prepare for some serious changes to the system. I like to believe that my move to a quiet Hungarian village with some land for food production, my own electricity creation, etc.. is in a way an attempt to be less depended on the financial system, but in all fairness, that is just a coincidence, it was not my goal. And it is also not the solution for humankind, just impossible that everyone can go back to be fully self sufficient. I am not sure what else you can do...

Anyway, some rhetorical questions today

[cmonkey]

What I am trying to say: are we not fooling ourselves, should we not indeed have some "escape" plans ready, just in case, not to be afraid or anything like that, but instead of only focusing on how to reach 4% SWR and FI/ERE, we should also (so far as possible) prepare for some serious changes to the system.

I believe quite a few people share this same thought, myself included. Beyond a certain level what can you do?

There are days when I look at macro trends such as shinking EROEI, exploding debt, changing climate and I think to myself "My God, will I even be able to enjoy the fruit of my ERE labor (saving so much so I can just relax)?" Will something snap and make any type of "5 years to retirement plan" impossible?

I always come back to the conclusion that if some systemic crisis does happen, I can't change where I'll be anyway (working longer and poorer) so I don't even worry about it. However, if it doesn't happen...well I CAN change where I'll be at that point. Thus the ERE plan continues.

It's pretty much a faith game at this point. My main concern is the effect of shrinking oil production over the next decade and the effect it will have on investments. So yes making investments in non-financial capital is important IMO.

[Hankaroundtheworld]

@cmonkey

fair enough, it is a faith game, but it feels so surreal sometimes. Actually, I am looking forward to get myself out of this current state of life, and start working on the land in Hungary (basically do anything else, something real), get myself out of this daily boring rhythm of going to work, and then browsing too much because I basically want to be somewhere else, i clearly have reached a dead-end in this working part of my life. Yes, it brings a lot of money, but it is not worth it anymore. Despite that I have seen a lot of beauty, I probably have also seen too much of the "bad" side of life while traveling around the world, the waste, the poverty, the ugliness that mankind leaves behind where ever he goes. Currently I am in a city of 20M people (of which many poor), which is expected to grow to 40M people in 20 years time, it is ugly, polluted, it is crazy how people are here living together like rats. You know, this is unsustainable, you feel it, you see it, and it makes you sad. I need a drink and get the hell out of here, see some beauty and fool myself that this does not exist....and also stop reading those web-sites, may be they are right, but I probably do not want to know (anymore). The age of Information has its bad side as well

[cmonkey]

Ha, you sound like me. A semi-drudge of a job that is frankly too easy and high paying to quit given I only have 5 years to go, I spend most days dreaming of what I will be doing when I get home each evening (and when I'm done working) while zipping through work that takes others a dreadful amount of effort to do. I love working the land as well, its the only thing that gives me long term pleasure. Other things come and go but working the land stays.

It does seem surreal at times, especially on days like today when I was able to make investments. Seeing your accounts grow by thousands each month can make you think its too good to be true. That probably fuels my thoughts of it not working out a bit.

[banker22]

I'd be interested to hear Chad's views on this