Qanta A380

Qantas A380 maiden flight to Los Angeles |

The inaugural A380 service left Melbourne at 11.15 AEDT, and is scheduled to land in Los Angeles at 7.30am local time (1.30am Tuesday AEDT), where it will receive a star-studded welcome from Qantas Ambassador John Travolta, Olivia Newton-John and Los Angeles Mayor Antonio Villaraigosa

Qantas A380 maiden flight to Los Angeles |

Qantas will follow the Melbourne-Los Angeles inaugural A380 service with its first Sydney-Los Angeles service on Friday, October 24.

Calling to Japan

How frustrating that the Japanese don’t use GSM anywhere. Right now there is not way to use your cell phone in Japan unless you won a Nokia N95 series or unless you have a 3G phone. I actually got my iPhone 3G to roam there, but couldn’t make any calls. There is the Softbank 3G network up and I got text messages but couldn’t make a call.

Sequoia slides

Well, someone posted the Sequoia slide

<div style=”width:425px;text-align:left” id=”__ss_648808″><a style=”font:14px Helvetica,Arial,Sans-serif;display:block;margin:12px 0 3px 0;text-decoration:underline;” href=”” title=”Sequoia Capital on startups and the economic downturn”>Sequoia Capital on startups and the economic downturn</a><object style=”margin:0px” width=”425″ height=”355″><param name=”movie” value=”” /><param name=”allowFullScreen” value=”true”/><param name=”allowScriptAccess” value=”always”/><embed src=”” type=”application/x-shockwave-flash” allowscriptaccess=”always” allowfullscreen=”true” width=”425″ height=”355″></embed></object><div style=”font-size:11px;font-family:tahoma,arial;height:26px;padding-top:2px;”>View SlideShare <a style=”text-decoration:underline;” href=”” title=”View Sequoia Capital on startups and the economic downturn on SlideShare”>presentation</a> or <a style=”text-decoration:underline;” href=””>Upload</a> your own. (tags: <a style=”text-decoration:underline;” href=””>depression</a> <a style=”text-decoration:underline;” href=””>recession</a>)</div></div>


!<! For some reason the 1970s don’t have a fancy label although I remember stagflation. Like the depression, it all started with the 1960s which featured massive deficit spending (to fund the Vietnam War, sound familiar) and loose monetary policy to reduce the sting of the deficit (sound familiar) but which caused a massive bubble in spending, borrowing

So this time inflation rather than deflation was the story because the deficits didn’t get trimmed and the monetary policy was loose. Trying price controls really didn’t work. Sadly, the dates are nearly identical, 1929 for the stock crash, then 1969 then 2008 (hmm, what is it about every 40 years, maybe everyone dies from the last time -)

Why did this happen, well the war for one thing, but then the Great Depression which had price deflation meant the 1970s were all about massive stimulus which caused inflation. See “Market Oracle”:

Understanding the Great Depression and the 1970s

Well how come the has a cool name, but the 1970s do not? Wikipedia as usual has a great analysis that includes how different countries were affect. Particularly relevant now in our interconnected world.

But the causes are the big issue Causes of the Great Depression which comes down to Keynes and monetary theory (I’m glad I liked my econ 101 classes!). What does sound familiar is that in the 1920s, everyone loaded up on debt to buy cars and things as well as factories. Then there was price deflation and a dramatic cut in spending to keep up on payments (sound familiar). The final face was massive layoffs and then as economic activity dropped, the debt was still there. Then banks failed wiping out savings but not the debt (hopefully this won’t happen this time) and as more loans were called, more people went bankrupt and stopped buying. The monetarist point out the fed wasn’t loose enough, so money supply fell by 1/3 as they let banks fail (not this time around!)

What is most interesting is the differential effects of the American flu:

* Australia. Back then (and now), it was really depending on exports
* Canada. Same deal
* Japan. Had the smart economists. They devalued their currency, so they could export more and they had deficit spending (but not for wars) to stimulate the economy. Not surprising, this caused inflation and ultimately led to the nationalists taking over when the economy was trying to cool.
* France. Was relatively isolated from a trade point of view, so was less affected. Maybe this is more like China today which has lots of exports, but a big internal deman.
* Germany. The war reparations crippled the economy and brought in Hitler.
* Latin America. Really hard hit because they were heavy exporters to the US.
* Netherlands. They had the gold standard for way too long, so they didn’t depreciate their currency, thus choking off exports.
* South Africa. Export driven also, they had a terrible time.
* Soviet Union. Because it was political and economically isolated, there was little impact

While most folks see the depression starting in the stock market in 1929, then economic activity collapese 2 years later. The most interesting thing is that in 1937 there was another recession. The bad part of rhetoric about big bad business,  but the good thing was a $5B fiscal stimulus package.

Sequoia issues warning of secular bear market (aka it is better to hold t-bills)

!Force of Good: a blog by Lance Weatherby

Today, Sequoia Capital hosted a mandatory CEO All-Hands Meeting on Sand Hill Road. There were about 100 CEO’s in attendance and let me tell you, the mood was somber. I’m not one to perpetuate doom and gloom or bad news, but let me underscore this for you: We are in a serious economic downturn and this is just the beginning. Immediate, decisive and swift action is required, along with frugal, day-to-day management of expenses and our business is required.

Market trends – Wikipedia, the free encyclopedia

A secular market trend is a long-term trend that usually lasts 5 to 25 years (but whose distribution is more or less bell shaped around 17 years, in the stock market), and consists of sequential ‘primary’ trends. In a secular bull market the ‘primary’ bear markets have in the past almost always been shorter and less punishing than the ‘primary’ bull markets were rewarding. Each bear market has rarely (if ever) wiped out the real (inflation adjusted) gains of the previous bull markets, and the succeeding bull markets have usually made up for the real losses of any previous bear markets. This is one of the reasons why a secular market trend may be said to encompass the primary trends within it. In a secular bear market, the ‘primary’ bull markets are sometimes shorter than the ‘primary’ bear markets and rarely compensate for the real losses of the ‘primary’ bear markets occuring during this extended cycle.

For example, in the 1966 – 82 secular bear market in stocks, there was hardly any nominal loss. But in real terms the loss was devastating. (In the past most ‘housing recessions’ were of a slow nature, thereby allowing inflation to keep housing prices steady.) Another example of a secular bear market was seen in gold during the period between January 1980 to June 1999. During this period the nominal gold price fell from a high of $850/oz ($30/g) to a low of $253/oz ($9/g),[7] and became part of the Great Commodities Depression. The S&P 500 experienced a secular bull market over a similar time period (~1982 – 2000).[8]

Hussman Funds – Weekly Market Comment: Secular Bears – February 25, 2008

First, let’s define our terms. From my perspective, a “secular bear market” comprises a series of two, three or more individual “cyclical” bear markets (with cyclical bulls in-between), where in general, each successive bear market achieves a lower level of valuation at its trough. Over the period from peak valuations and trough valuations, it has invariably been true that stocks have lagged Treasury bill returns. .

This result is not particularly sensitive to the level of Treasury bills, but instead reflects the simple mathematics of total return. Holding the P/E multiple constant, the total return on stocks is equal to earnings growth plus the dividend yield. Since peak-to-peak earnings growth for the S&P 500 has historically been capped at only about 6% from cycle to cycle (as I’ve presented in numerous prior charts), it’s hard to get significant long-term traction from one bull market peak to the next unless the second bull market reaches a higher P/E than the first one did. Worse, when each successive bear market registers a lower trough valuation, even rapid earnings growth is incapable of pulling total returns to satisfactory levels.

Secular bears in the past century include 1901-1917, 1929-1949, and 1964-1982. To illustrate, consider the 18-year period from 1964 to 1982. From a valuation standpoint, the S&P 500 reached about 20 times record earnings in 1964 and 1965. Even though stock prices continued erratically higher until 1972, a buyer of stocks at the rich valuations of the mid-1960’s would have been only slightly ahead of Treasury bills by the 1972 peak.

Hussman Funds – Weekly Market Comment: Secular Bears – February 25, 2008

prior “secular bear markets” have generally provided a wide range of investment conditions and many good opportunities to accept market risk. Though investors who carelessly ignore valuations are sometimes forced to endure years of disappointing returns, it is also generally true that excellent investment opportunities develop well before the end of a secular bear. In the 1965-1982 period, for example, the brutality of the 72-74 plunge made the water safe for investors for several years at a time beginning in 1974 (even though stock returns didn’t durably outperform T-bills until the 1982 trough was set

Hussman Funds – Weekly Market Comment: Secular Bears – February 25, 2008

Though the 2000-2002 decline was similarly brutal, it unfortunately originated from truly psychotic valuations of about 34 times record earnings. As a result, the 2002 bear market trough occurred at the highest valuation (15 times record earnings) of any prior bear market trough in history, and failed to clear the excesses of the prior bubble. Predictably, the recent bull market has been far less robust than typical bulls

!Market’s 7-Day Rout Leaves U.S. Reeling –

On its way down, the Dow Jones Industrial Average broke through another milestone, closing below 9000 for the first time since 2003, wiping out the bulk of the gains from the last bull market. The decline leaves America in one of its worst bear markets in decades, a slump that is triggering comparisons to long-running declines of the 1930s and 1970s.

Thursday’s decline — the 11th largest in percentage terms in the Dow’s history — put the stock market either in, or nearly in, a crash. A common definition of a crash is a 20% decline in a single day or several days. The Dow’s crash in 1987 was 22.6% in one day. The 1929 crash was back-to-back declines of 12.8% and 11.7%