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Blast From The Past: "The 1999 Boom With No Bust" Edition

Tyler Durden's picture





 

It's never different this time. All too often we forget (whether by choice or happenstance) what occurred in the past - missing the lessons from history and, perhaps in an effort to deny the reality, maintaining the status quo that cradles us so warmly every night. In an effort to bring back some of that "memory" - and dispel the inevitable recency bias (and cognitive dissonance) as even the Fed is admitting markets are frothy, we bring you 1999's CNN Special "The New Economy - Boom Without End."

A brief clip from the archives full of internet dreams, globalization hopes, growth without inflation, and most importantly productivity gains. It seems we weren't that far off 14 years ago as Ed Yardeni notes, the internet is an inherently price-deflating animal (in its global competition exposing ways) which means - for firms to maintain profits (and stock prices), they must increase productivity... or in the modern parlance cut costs and lay off workers. "The economy has changed for good..." sums up the 'it's different this time' view of the 90s bubble.

 

Stephen Roach notes at the time - "if we are not in a new economy and the 'old rules' come into play from time to time, then much of what has happened in the 1990s will ultimately be challenged." Indeed Stephen...

Must watch...

 

And here's the "productivity" gains they discuss...

 

 

 

 

(h/t @Ryknow16)

 


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Sun, 09/29/2013 - 16:28 | Link to Comment New_Meat
New_Meat's picture

lim {productivity->inf} = nobody needs to work.

yep, it is different this time.

- Ned

Sun, 09/29/2013 - 16:31 | Link to Comment VD
VD's picture

and how many scoffed at gold in 1999? compare that to indices from the above CNN 'report'. 

Sun, 09/29/2013 - 16:43 | Link to Comment seek
seek's picture

Practically everyone at that time scoffed at gold except some Y2K preppers and hardcore fiat skeptics / conspiracy theorists.

In 1998 I bought a modest chunk of gold (that subsequently sank in a tragic boating accident.) In 2008 I did ended up doing business with the same dealer when I was having trouble obtaining it from other sources, and he remembered me (and that 1998 order) and laughed, telling me that I bought at a time when "we couldn't give the shit away" [in '98] and congratulating me for buying the low. Apparently my fairly modest purchase in 1998 was one of his largest sales that year. Times change.

Sun, 09/29/2013 - 16:50 | Link to Comment CPL
CPL's picture

The stock certificates from pets.com have kept their value in warmth by lining my hobo cloak with it.  On tuesdays it's Nortel foot wear day.

Sun, 09/29/2013 - 17:26 | Link to Comment Seer
Seer's picture

Thanks for the chuckle!

Sun, 09/29/2013 - 17:46 | Link to Comment negative rates
negative rates's picture

Who's going to be the last one holding the dry powder bomb? You know, the one that wasn't supposed to go/get off, but did.

Sun, 09/29/2013 - 18:23 | Link to Comment CPL
CPL's picture

You mean where is all that bad debt going to go?  No where.  No one was going pay it off anyways and it did go off six years ago in 2007. 

Everything around us all right now is the slow moving train wreck.  Economies don't 'vanish' overnight.  They get severely beaten up then put on life support until everyone understands that they aren't getting anything for the offer.  We all can all see the governments of the world trying to goad people into going crazy by seizing their accounts/printing money/fucking with PM prices.  But it's not working as planned.  Not even remotely close.  LOL! 

People that do their own business, have skin in the game and actually provide a service OR a customer really needs something.  All these folks are already adapting to all these changes.  The world doesn't stay still because a man in a suit says it does.  Business still happens.  Couples fall in love.  The Sun rises and sets.    The business being done is more hussle and flow, less paying peter to pay Paul, cash in hand.  And of course; stash, gas or ass. 

Those campy phrases are, contrary to popular mislabeling, economic transactions.  And there isn't a single person on the planet that doesn't know what they are.  Neat huh?

Instant local back up economic systems that everyone learned growing up by need and trade on playgrounds.  It's not perfect, but it's alot more equitable than the current offer; and is dependent on need and merit.  And really, really, really hard to track or tax.

 

Sun, 09/29/2013 - 23:26 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

Ahhhh.... The grey market economy. Where everyone who is "unemployed" works. Ass, grass, or gas baby!

 

Sun, 09/29/2013 - 17:33 | Link to Comment fockewulf190
fockewulf190's picture

I heard that Ming the Merciless: Upcoming Ruler of New Earth is in production right now. Don't count on Buck and his girfriend to save the day though. His sorry ass didn't stack, and his girlfriend ended up joining Ming's brothel for a secure job. Should be out soon after the Great Reset begins.

Sun, 09/29/2013 - 17:56 | Link to Comment CPL
CPL's picture

A man just can't be completely whole without a lair, machines full of randomly blinking lights and space hookers.  I think we all get that deep down...

Sun, 09/29/2013 - 16:52 | Link to Comment VD
VD's picture

good move seek! you were one of the prescient ones for sure. 

Sun, 09/29/2013 - 17:04 | Link to Comment seek
seek's picture

Strangely enough it was my exposure to one of those fiat conspiracy theorists that resulted in the purchase. He had set out his argument on the radio, challenged someone to fact-check it, I did and had a "holy fuck" moment and started making tinfoil hats.

I still don't think we've even seen 10% of what will eventually occur yet, but it's been very odd (and scary) to see it unfold as it has.

Sun, 09/29/2013 - 17:08 | Link to Comment VD
VD's picture

agreed. i read your below comments and i think there will be major correction in Oct. my narrative is that it is the non-taper letting out steam event that leads to more QE, without the Fed explicitly causing the correction with their (taper) present term policy. it'll be a real shitshow heading into December. but that's just my crystal ballz...

Sun, 09/29/2013 - 17:27 | Link to Comment Pig Circus
Pig Circus's picture

i think there will be major correction in Oct.

Down 6 of 7 and this after the Fed gave these Psyco, ballwashing Cocksukers everything they wanted and then some.

Could the psychology be changing? Who the fuck knows.

Sun, 09/29/2013 - 17:41 | Link to Comment TeamDepends
TeamDepends's picture

Markets about to open in Oceania.  Don't know about you, but we simply can not wait any longer to see how barbaric relics do out of the gate.  Let the roller-coaster begin!

Sun, 09/29/2013 - 20:40 | Link to Comment lewy14
lewy14's picture

But in that same limit, money dies. Capital dies.

That's where the whole "no bust" thing falls apart.

Mon, 09/30/2013 - 07:48 | Link to Comment kralizec
kralizec's picture

Obviously the lesson here is to maximize profits by reducing employment...just think of the wealth created once all employees have been eliminated!

/

The stupid works both ways!

Sun, 09/29/2013 - 16:29 | Link to Comment ToNYC
ToNYC's picture

Bring back Chauncey Gardener!

Sun, 09/29/2013 - 17:16 | Link to Comment TeamDepends
TeamDepends's picture

Doctor Allenby: This won't hurt a bit.

[Sticks Chance with a needle]

Chance the Gardener: It did hurt.

Sun, 09/29/2013 - 16:35 | Link to Comment xamax
xamax's picture

CNN WAS NOT SO WRONG

The other day, Kotcharloka said they will do " whatever it takes".
Why should I be worried?????

Sun, 09/29/2013 - 16:38 | Link to Comment Racer
Racer's picture

Gordon Brown "An end to boom and bust"

as he sold UK's gold at the lows

Sun, 09/29/2013 - 16:53 | Link to Comment logicalman
logicalman's picture

Them banks had to be saved!

Sun, 09/29/2013 - 17:30 | Link to Comment knukles
knukles's picture

Yeah. Gordon Brown was a Labour PM and Oblahbombah's a Democrat and their policies have nothing in common, so it must be different this time around. 

(need I add the sarc as neither were community organizers, central planners, big government idealists of friends of the financial community)

Sun, 09/29/2013 - 16:40 | Link to Comment Barry Lincoln
Barry Lincoln's picture

Those kids got one thing right, they'll be billionaires soon enough. 

Sun, 09/29/2013 - 17:30 | Link to Comment Pure Evil
Pure Evil's picture

That's nothin'.

Those people are very limited in their greed.

Zimbabweans are already Quadrillionaires.

Try to remember, "Greed is Good".

I plan on being the first Googolplexianaire.

Sun, 09/29/2013 - 17:37 | Link to Comment fockewulf190
fockewulf190's picture

Jaime Dimon will still be richer than you.

Sun, 09/29/2013 - 16:44 | Link to Comment DOGGONE
DOGGONE's picture

The Dow peaked January 2000!
http://www.showrealhist.com/index.html
For a calendar month average, the Dow has NOT YET gotten back to that level.

Sun, 09/29/2013 - 16:46 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

Fix your link, dog.

Sun, 09/29/2013 - 16:47 | Link to Comment DOGGONE
DOGGONE's picture

Fixed, thank you.

Sun, 09/29/2013 - 16:55 | Link to Comment DOGGONE
DOGGONE's picture

You should like this ...
http://patrick.net/forum/?p=1223928
And I hope your efforts are more effective than mine seem to be!

Sun, 09/29/2013 - 16:43 | Link to Comment NDXTrader
NDXTrader's picture

The Fed wasn't creating $85 billion a month then. Stocks are priced in dollars. An asteroid could hit the earth tomorrow and if Bernanke rolled off Yellen and hit a button the market would be up 500 points. Just go long until they can't print anymore and then use that money to go short for the collapse

Sun, 09/29/2013 - 16:45 | Link to Comment seek
seek's picture

Timing that particular long/short trade will kill 99% of those who attempt it.

By the time you know you need to go short the markets will be closed and the dollar will have collapsed a few days later.

I'll stick with patience and hard assets.

Sun, 09/29/2013 - 16:50 | Link to Comment NDXTrader
NDXTrader's picture

Totally understood. One of two options. You either stay long and hope you can get out or get metal. But the oh hey lets go short these money printers shit has to stop

Sun, 09/29/2013 - 17:31 | Link to Comment Seer
Seer's picture

Your solution/angle, while I'm in concurrence with the desired outcome, leaves a bit to be desired.  Perhaps when one has a hammer then everything's a nail? (username seems to indicate a preference for trading in the market)

Only sure-fire way is to remove your energies from the System.  Why wait when it's going to be an eventual reality?  Yeah, sometimes one feels the need to stare directly at a train-wreck, but I'm thinking that this isn't one of those times.

Sun, 09/29/2013 - 16:49 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

Exactly. Trading 'it' (the game, the market, momentum chasing the Fed, etc) with leverage is what they want you to do.  Swim with sharks.  Their insiders will react first (faster and in larger quantity) every time, and if they can't force you to sell, they can still whipsaw you so bad (esp if you are on margin) that you have no choice but to buy high and sell low!

Buy gold, and don't sell.  Wait until it can literally be exchanged for a new currency. 

Sun, 09/29/2013 - 16:54 | Link to Comment NDXTrader
NDXTrader's picture

You're exactly right long term. Short term it's good to go long and use the profits to buy real assets. This beast isn't getting killed anytime soon

Sun, 09/29/2013 - 17:00 | Link to Comment Skateboarder
Skateboarder's picture

My thoughts exactly. All but a few who try to time that and pull it off will end up on their arse, and those who succed will do out of sheer luck. The overall shift will be quite instantaneous in the algorithmic realm. The markets will go offline quite fast as a result, and humans won't have a chance to short.

Sun, 09/29/2013 - 17:47 | Link to Comment thereisonlyonelaw
thereisonlyonelaw's picture

September, 2015. However, what exactly will be left standing is difficult to know. Going short is nothing more than borrowing and all trade is done in pairs; your profit depends on what you are going long just as much as what you are going short. Will the dollar be king again, or will the next crash collapse it? I can't say. There is no "Dow", there is only Dow/USD. I'm not sure if it's better to go long or short on that trade in the event of a collapse.

Sun, 09/29/2013 - 16:47 | Link to Comment Bam_Man
Bam_Man's picture

And the sheeple are so much dumber and easier to fool today than they were in 1999.

Sun, 09/29/2013 - 17:10 | Link to Comment seek
seek's picture

I disagree. I don't think there's been a time in my life where people have been more skeptical and distrusting of authority, and that skepticism and distrust is growing rapidly.

Back in 1999 you could do an internet IPO of virtually anything and people would buy it, regardless of business plan or expected profitability. Remember the insanity of the CueCat, sending free hardware to as many households in the US as the could?

The difference between today and 1999 is that the TPTB are doing stuff out in the open that they wouldn't have dared tried in 1999, thanks to the power free-for-all created by 9/11. But trust me, the rank and file out there know they're being lied to and screwed on a daily basis, and honest polling numbers reveal this clearly.

Sun, 09/29/2013 - 23:31 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

CueCat! Barcode scanners for home coupons and URL's! It was the beta of the QR code, before cameras and cell phones were fucking, and had halfling offspring. I'm worried my Ipad might finger fuck a fax machine, and we'll end up with an image transmitter....

Sun, 09/29/2013 - 17:56 | Link to Comment yogibear
yogibear's picture

The new economy is called central bank printing. It works until it doesn't.

Once the US looses it's reserve currency status it's when their game is over. The Fed will keep printing and the US will keep increasing it's debt limit.

Japan is the US Federal Reserve's great Keynesian printing experiment. 

Sun, 09/29/2013 - 16:58 | Link to Comment logicalman
logicalman's picture

I can't even imagine trying to trade anything in the markets as they exist today.

You would need a high-end crystal ball that told you what TPTB have cooked up for the day and what the algos are doing on a millisecond basis - even then you'd need a lot of luck if you are not one of the 'chosen/connected' (read criminals).

Try to reduce what the bastards steal from you and go with hard assets would seem to be a better bet.

Sun, 09/29/2013 - 17:02 | Link to Comment NDXTrader
NDXTrader's picture

Why? The markets have been simple for the last 5 years. Go long...they are going to print money..:its the only option they have left. Wait for "scary" events and buy all you can. This shit is priced in fiat currency for awhile at least

Sun, 09/29/2013 - 17:04 | Link to Comment NDXTrader
NDXTrader's picture

Can you imagine all of the fiat currency you could have to buy depressed real assets if you had night every dip since the currency printing started? Use their game against them. When the reset happens you'll know it. Until then buy every dip and use the profits to buy tangible stuff

Sun, 09/29/2013 - 17:09 | Link to Comment Seer
Seer's picture

"I can't even imagine trying to trade anything in the markets as they exist today."

Nothing has changed except the speed and depth of deception! (and if one were to look at this through the eyes of a benevolent Fed, not saying they are, but for argument sakes play along, one could see how tough it could be for the Fed to even come close to refereeing a neutral playing field [they're probably doling out some info to the biggies, as though this would ever have been different, but doing so with "pictures" (if those biggies fuck up and cause a disturbance then they're going down, a la Lehmans)].

You indirectly operate in the "markets" every day, if, that is, you transact with commercial enterprises.

No one has EVER known the future (well, the short-to-midterm one).  And peons like you and I have absolutely no way of significantly capitalizing on trends/changes because we don't have enough to have any influence (and, really, given some of the questionable thinking that goes on here I'm pretty glad that that's the case).

One either looks to support something based on what someone believes in, or, they are looking to GAMBLE, to profit off of someone else's loss.

"Try to reduce what the bastards steal from you and go with hard assets would seem to be a better bet."  Duh!

Sun, 09/29/2013 - 17:36 | Link to Comment thereisonlyonelaw
thereisonlyonelaw's picture

Trading is nothing but risk arbitrage. The rule is simple: buy low, sell high. You don't need a crystal ball, you just need good money management. The more volatility and the more irrational that volatility, the better.

Sun, 09/29/2013 - 17:02 | Link to Comment Seer
Seer's picture

They have to wonder whether growth is sustainable?

Can SOMEONE just stop such discussions right fucking there and ask the simple question: how CAN perpetual growth on a finite planet be possible? (prepare to back up with some actual/facts/math/models)

Sun, 09/29/2013 - 17:31 | Link to Comment thereisonlyonelaw
thereisonlyonelaw's picture

I can answer that.

1. While the planet is finite, it is also really fucking huge. The physical limits of "economic growth" on this planet are still far away.

2. Virtual technology. All goods are simply a means to create an experience. Their value is the value we give to those experiences. Experiences can be simulated. With proper technology, every man, woman and child could live in their own private virtual planet.

3. There are other planets.

Sun, 09/29/2013 - 17:40 | Link to Comment Skateboarder
Skateboarder's picture

You do realize that half the world barely has anything to eat.

Sun, 09/29/2013 - 17:58 | Link to Comment thereisonlyonelaw
thereisonlyonelaw's picture

Which half? They are doing a pretty good job of staying alive with no food. Usually the population falls pretty fast when there is barely anything to eat. It happens, but it is almost always a result of war, not lack of resources.

Sun, 09/29/2013 - 23:34 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

I have a modest proposal to solve that "hunger" issue. http://art-bin.com/art/omodest.html

Sun, 09/29/2013 - 17:03 | Link to Comment DOGGONE
DOGGONE's picture

How about criminalizing use of the term "free market"?

Sun, 09/29/2013 - 17:13 | Link to Comment Seer
Seer's picture

Is that before or after outlawing the words/sentence: "perpetual growth on a finite planet isn't possible"?

Sun, 09/29/2013 - 23:35 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

Or at least demanding that you say freely manipulated...

Sun, 09/29/2013 - 17:11 | Link to Comment NDXTrader
NDXTrader's picture

Even in Zimbabwe you had time to get out if you were paying attention. Use their death throws to make paper and turn it into gold. It's that simple

Sun, 09/29/2013 - 17:16 | Link to Comment Seer
Seer's picture

Yup.  If people haven't figured out the answer by now (still trying to "fix" the System) then they've pretty much missed the boat.  Part company with all of this voluntarily, before the parting becomes pure, real sorrow...

Sun, 09/29/2013 - 17:14 | Link to Comment Quinvarius
Quinvarius's picture

Panama banking holiday going on.

Sun, 09/29/2013 - 17:16 | Link to Comment NDXTrader
NDXTrader's picture

Does anyone really think the world is going to end this weekend or the dollar is going to lose reserve currency status? If you still trade in paper then buy this dip and you'll be up significantly by the end of the year. Unless you think Yellen is going to grow a conscience. Use that worthless fiat to buy more gold. Then do that until the central bankers either lose control or want something different

Sun, 09/29/2013 - 17:19 | Link to Comment Seer
Seer's picture

"Unless you think Yellen is going to grow a conscience."

Huh?  Pigs flying?

The System is psychopathic!  This is locked in and on full throttle until we hit that free-fall at the cliff's edge.  "Old Charlie stole the handle..." [Jethro Tull]  Yellen is but a passenger on the train...

Sun, 09/29/2013 - 17:24 | Link to Comment NDXTrader
NDXTrader's picture

Exactly right. If you trade paper, position yourselves with the 1%... Do what they are doing...which is buying worthless paper that people still believe in and use it to buy real things. Everyone on ZH will know weeks beforehand when the shit really hits the fan. Calmly go to your safe deposit box, gather your gold and silver, Stock up an ammo and when everyone else is freaking out keep your friends and family close. Until then paper is going to skyrocket. It's all they have left

Sun, 09/29/2013 - 17:58 | Link to Comment hardcleareye
hardcleareye's picture

Perhaps you should watch the "Buy the Dip or you are a fucking idiot..."  cartoon...... lol

http://www.youtube.com/watch?v=jllJ-HeErjU

 

Sun, 09/29/2013 - 17:42 | Link to Comment NDXTrader
NDXTrader's picture

I love the down arrows. Sure I would have gotten them in 2009 as well. It's simple now - if you're a prepper now then god bless. If you trade this market that's priced in dollars then go long. Use your profits to buy things that are important. There is no chance in hell the Fed lets this market go down when all of their chips are in. They will fight "deflation" until they own everything. It's their last gambit

Sun, 09/29/2013 - 17:43 | Link to Comment NihilistZero
NihilistZero's picture

The internetz in general and video hosts in particular have propagandzing a little more difficult :-)  When someone can view you contradicting yourself multiple times it's hard to keep credibility.

Sun, 09/29/2013 - 17:48 | Link to Comment Herkimer Jerkimer
Herkimer Jerkimer's picture

'

'

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No wonder everybody in mainstreet media hates your effing guts, Durden!

Way to go makin' friends again!

Keep up the good work. It's why I come back here eveyday, twice or thrice!

Nobody likes a truth-teller.

 

•J•
V-V

Sun, 09/29/2013 - 17:59 | Link to Comment yogibear
yogibear's picture

A US Bankster holiday eventually with them eventually seizing money from accounts.

Sun, 09/29/2013 - 19:26 | Link to Comment Quinvarius
Quinvarius's picture

Looking back and knowing how the Fed was manipulating everything, it is almost comical to see how ignorant people were about what moved the economy around.

Also, it is good to see Morgan Stanley was so good about making predictions that they said the internet was less important than the invention of the elevator.  LOL.

Mon, 09/30/2013 - 02:48 | Link to Comment zipit
zipit's picture

Lets see that chart except showing "Percentage of US Population With a FULL-TIME Job."

Mon, 09/30/2013 - 04:26 | Link to Comment SonOfSoros
SonOfSoros's picture

I started going into physical assets after learning about fractional banking in school.

I feel pretty comfortable either way because I am well positioned for fiat gains as well as a fiat crash. Doesn't matter when I profit either way.

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