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Subject:  Re: Why the Market sold off and will continue. S Date:  11/12/2007  9:16 AM
Author:  abitare Number:  19888 of 770

Thank you both for the replies. For the record I am 50% short and 50% cash, I will likely get shorter on Tuesday.

Most people are optimist and slow to recognize there has been a change. They believe that the way things were yesterday is how they are going to be tomorrow. When there is a change in the paradigm many are caught off guard. 

 "World-changing technology, constantly in development."

Yes, good and bad. Weapons technology has evolved that some of the poorest and most isolated countries have nuclear weapons. The AK-47, VIED, IED, suicide bomber, rockets, GPS guidance, internet propaganda, cell phones etc…. have made non-nation state player capable of threaten and bankrupting first world armies / countries.   

One of the US primary exports is debt and military defense. What is the outcome when people no longer want or will pay for these? Will the World Bank and IMF help save the US dollar?

"Unprecedented levels of U.S. and global productivity (up almost 5% just last quarter) -- and these rates will continue to increase."

Maybe, but if there is a slowdown, there may follow a severe recession / depression ref WW1 and the depression.

"Near-record low levels of violent crime in the U.S. (i.e. a safer and more peaceful world). "

When there is work / opportunity there typically peace. But can the credit expansion go on forever? Some would credit Roe V Wade (Freakonomics) and some credit the record prison population. 

"Note what's happening in Korea."

NK has nuclear weapons; SK is hoping the US will leave. Everything the US could produce can now be produced overseas. The US no longer produces the worlds cars, TVs, cell phones, oil production (is down) etc… our primary export dollars and defense is in trouble (severe). 

The advantages the US has had are disappearing at a rapid rate. Are today’s children prepared to work as hard as Asian children to compete globally? Place your bets accordingly. Maybe Asians will tire of loaning the US money to support the US lifestyle which is 100x better then most Asians.

David Tice is "covering his book" - he is a permanent Bear.  Having him on Bloomberg saying he expects a 50-60% decline in US stocks has an impact. But does not mean he is wrong, he maybe early on his call. 

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