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Wednesday, August 5, 2015

Shaky markets



This is one I haven't seen before. Apple is so big that if it has a financial downturn it will take the whole market with it.

Now I would have thought Puerto Rico's inability to pay its debt would be big story about market threats. Maybe Apple is bigger than Peurto Rico.

We used to think the Greece situation was dire. It is, but the story has been pushed to the back burner as the EU fix is in. The "solution" is a temporary papering over of a financial mess that cannot be fixed.

Of course, there are other countries that are almost as in as much debt trouble of Greece -bigger countries that will have more geopolitical impact. Italy and Spain come to mind, but really, the whole EU has issues.

By rights, if there was going to be any sort of an economic boom it would be now. Petroleum prices are lower than they've been in some time. That should be a major economic boost. The fact that we are still just muddling along says something. When the economy takes a big downturn, the whole petroleum sector will really go in the dumpster.

Then anything can happen. In fact, we could then reach a point where energy prices sore, even during a major recession or even a depression. The energy sector could suffer so much damage that it might be unable to supply even a greatly reduced market.

Will this all happen? When will it happen? If I could answer those questions with any precision I'd be a rich man indeed. What I can say is that it would be very imprudent to assume things will keep chugging along the way they are. At the very least, look at your situation and figure out how vulnerable you are to financial fluctuations.

The Great Depression is almost no longer in living memory. When we forget the past is when we repeat it.

-Sixbears

8 comments:

  1. Most people, especially politicians forget what happened yesterday unless they can make political capital out of it.
    There's certainly none in New Zealand who learn by yesterday's mistakes. A shame really. History repeats itself...

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    1. Indeed it does. Sad to think that New Zealand is also run by the short sighted. Your country has a lot of advantages and it's a shame to see them squandered.

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  2. Yes, indeed. Don't live in fear, live prepared.

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    1. I'd be more worried if I lacked my preps and skills.

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  3. In 2007-2008, though we had invested very conservatively, my wife and I took a real drubbing. Now I am invested in tangibles, not electronic numbers a bunch of crooks in New York can manipulate at will. If there's a major depression, I won't be effected one whit, other than my kids will probably have to come home and that's ok with me.

    Unless the government starts confiscating certain "stores of value" . Even then, saying it and doing it are two different things.

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    1. In 2007 -2008 I lost about half the paper value of my house. Since I don't plan on selling it, that doesn't really affect my day to day life. My state managed retirement took a hit and that cost me a bit too. Haven't missed any meals though.

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  4. (crap, try to be somewhat anonymous and blogspot loses my nice comment...) to recap it: PR GDP is $103 billion, Apple's market cap is $670 billion. So yes, Apple is worth more, at least my those metrics.

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    Replies
    1. Weird. A seller of electronic trinkets is "worth" more than an big island full of people.

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