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November 21, 2008

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ana

I think the amount of fear one feels is equivalent to one's unconsciousness or unawareness of one's true self. I think we as a nation have been so identified with the labels of economy, money, power, comfort and so on. We forget these are just labels and we attach much energy to those labels. So we get instant Karma. Someone not dependent on those labels might not be suffering as much as someone who has placed great importance on them.

Clint Stonebraker

I am admittedly ignorant in regard to markets, trends, and other financial technicalities. However, my experience has been that we humans have a tendency to react to emotional situations rather than take the time to rationally and logically figure out the most appropriate way to respond.
I do not believe that it is all doom and gloom. I see the current financial situation as a collective confirmation that it is time for the system to change. As scary as change can be to some, it is inevitable. My responsibility to myself and my family is to remain calm, patient, and grateful. With these traits will come the willingness to stay appropriately informed rather than at the mercy of the hysterical mass media view.

Kent @ The Financial Philosopher

ana:

I could not agree more! One's level of concern with regard to economic conditions reveals, in kind, the measure of importance money and material status plays in one's life.

It is my hope that this revelation becomes one of those unforeseen, life-changing events for many people, much in the way that a near-death experience is reportedly such an enriching event.

Unfortunately, it takes a "shock" for people to see things as they should...

Cheers...

Kent

Kent @ The Financial Philosopher

Clint:

Thanks for the commet and yes, I agree with your inference that experience is quite a relative phenomena.

If one has not experienced a "depression," it is natural that the most extreme conditions they had experienced thus far in life would be attributable to the worst imaginable.

I wonder what someone who actually survived the Great Depression would say about today's crisis?

It is my guess that the comparison, to them, would be bordering on comical.

"Men are disturbed not by things, but by the view which they take of them." ~ Epictetus

ana

"Men are disturbed not by things, but by the view which they take of them." ~ Epictetus

That's a great quote. I think that being in touch with our feeling is important. Recently, becoming aware of my feelings, thoughts and sensations, has become part of my practice. I think sometimes the rational mind is quick to dismiss feeling as un-important. But feelings are a path to the Self and discovering the underlying apparent 'deficiencies' that one tries to cover up with consumerism. I think the current situation reflects how out of touch we, as a country, have been with our selves as Human-Beings.

Leonardo Cecchini

As humans, we abhor uncertainty (or randomness). Through the ages, we have fooled ourselves into believing that we could actually forecast future events. The fact that we have been more wrong than right (in many differing fields) as not dampened our efforts. Consequently and especially in moments of high emotional stress, we try to seek confort by trying to predict 'the next step'. If anything, the very act of trying to reduce uncertainty actually increases it. So, more often than not, our emotional bias (or confirmation bias) will stir us towards that information that confirms our view. That is why in any given moment you will always get one party arguing the bullish case whilst the other the bearish one, each with suitable evidence to suport their thesis. Who's right? Time will tell.

With regards to the current times, I personally try and see it as simple as possible. The fact that a huge pile of debt needs to be issued by the government (which will compete with the corporate sector that will also need to reset next year), coupled with the already existing pile of debt, one has to feel that at some point this will proove to be too heavy to carry... The trick woorked in 2001/2003 because the burden on the consumer was 'relatively' low. That is no longer the case

Kent @ The Financial Philosopher

Leonardo:

I agree with all of your points...

Humans are uncomfortable with things that are not concrete, such as space and time, which is why we have Science to define them for us!

In times of extreme emotion, however, I tend to rely more on qualitative (i.e. intuitive thought and judgment) measures rather than quantitive.

I, too, like to make thoughts on subjects such as this as simple as possible.

If I simplify this financial crisis, or any other market cycle, I expect it to begin and end by means of the same entity.

This entity is housing. Once inventories work their way down from record levels, the beginnings of a foundation strong enough to build upon will form.

In the mean time, the excesses will be removed.

The question that remains is how severe and how long will things be before we can build again...

Once again, we return to the question and discomfort over space and time...

Ben

Hi Kent.

A few weeks ago I saw a cover of Time magazine that had a Great Depression era photo with the tag line - "Depression 2.0" - this juxtaposition of old and new brought a smile to my face. IMHO it's too early to say the "D" word. The fundamental difference between now and seven decades ago is the global intertwining of economies.

Where I live, Australia, a common joke is that when the USA sneezes we catch a cold. The Australian economy is more reliant on the Chinese economy these days due to the natural resources that are exported to fuel the Chinese building boom.

History has many invaluable lessons to teach us, but there will always be fundamental differences between the past and the present. The future is an unexplored country.

In my lifetime I have seen the news media go from two daily newspapers, nightly news bulletins on television and hourly news bulletins on radio to a relentless 24 hour news cycle. I still marvel at the fact that on a brisk Saturday afternoon I can easily find stock prices from pretty much every stock market.

If one has the belief that human nature is fundamentally geared towards fear and catastrophe then the 24 hour news cycle will feed that fear - "if it bleeds, it leads".

What might come out of the current situation is a questioning of the nature of relentless consumerism. There might be a shift to looking inward for a "well lived life" and not relying on external "shiny objects" for life satisfaction.

I also bear in mind that the steps that governments take in these times may very well have unintended consequences - that's just the nature of the market.

My country and yours, Kent, will know it's a depression when the majority of the population will be foraging and bartering for food. This is fair way off at this point in time.

To finish up I think that Steven Covey's Circle of Concern and Circle of Influence need to be considered. I may be very concerned about the measures that governments take, but I can only influence the way I utilize my resources - mental, physical and fiscal.

Cheers.

Kent @ The Financial Philosopher

Ben,

You make several great points!

The depression call is certainly premature, even in the face of a financial "perfect storm." The combination of 24-hour media access, freedom and tremendous advances in technology have enabled this financial crisis but can also enable its recovery.

The greater perspective, as you mention, is that many people will take a much closer look at what brings meaning and purpose to their lives.

Most of them, hopefully, will find that money, material wealth and stocial status are not anywhere near the highest of priorities.

Thanks for sharing your thoughts...

Kent

Ben

Hi Kent,

Thanks for your kind words. There are very interesting times ahead.

Cheers

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