Manhattan Reborn 1978

new York.

night~

Fifth Avenue and 60th Street, Manhattan.

Metropolitan Club, fourth floor.

Standing next to the slide projector, David discussed in detail with Mr. Pierre Tenelli, head of Citibank's Asia branch, about investing in Forex Connect and how to make Citibank's board members clearly understand its risks and benefits.

After discussion~

Seeing that his mentor, Professor Bartlett, had stopped communicating with Old Morgan, Panaris, Nalent Ramon and others, David put a new slide in place, pointed at the diagram on it and smiled.

“I understand economics as a machine that has a simple appearance but very complex internal components.”

"Many people fail to understand its objective operating rules or mechanisms, so they will inevitably make wrong decisions at certain wrong stages."

“For this, I feel a great sense of responsibility!”

“So I will try to describe the seemingly complex economic mechanism in the simplest language possible~”

"First of all, please take a look. If we want to track the economic development trend of a country, this economic cycle trend template will help us figure out what will happen and when."

"Any economic cycle we know of will have a vague starting point for the rising period!"

“This starting point is like a long-term debt cycle curve around this straight line of economic productivity growth.”

"And the small wavy line around the long-term debt (claim) cycle curve is the short-term debt (claim) cycle curve."

"If we build this analysis template from the first industrial revolution several hundred years ago, we can easily find that the domestic economy is in a period of rapid decline."

“Just like here~”

"According to Engels, productivity is the ability of people to actually carry out production activities, the ability of labor output, and the productivity of concrete labor."

"In his book Capital, Marx believed that the three factors that determine the level of productivity are workers, means of labor, and the objects of labor."

“The fundamental difference between productivity and labor is that the former is the expression of the function or ability of the social organism, while the latter is the ability or function of the human organism.”

“Productivity always refers to the productivity of society.”

“The reason why productivity is an objective material force is more importantly that it is an acquired force that cannot be freely chosen by people.”

"It not only has continuity and historical inheritance, but also reflects the relationship between man and nature in the production process. The productivity is not exclusive to a certain era, a certain society, or a certain class, but is the wealth created by all mankind."

"We can see from this template that if we set the economic growth created by productivity as the vertical axis and time as the horizontal axis, this straight line representing the productivity growth after World War II has continued for more than 30 years as the population and demand have grown since the war."

"So in my opinion, this straight line of productivity growth also represents the growth of total wealth in the world."

“The faster it grows, the more it highlights the ups and downs of the long-term debt cycle curve!”

David held the slide projector in his hand, moved half a step to the side, looked at everyone and shrugged.

"In the picture I drew, we can clearly see the change in economic trends over a period of time."

"But it is difficult for me to predict where the end of the economic downturn we are in will be."

"Because it has no beginning and no end, it is always fluctuating!

"The ups and downs of the cycle all revolve around an equilibrium point that is ultimately formed through countless rounds of gaming!"

"When countless game equilibrium points appear, they will form this main line of magnetic cycle development, allowing everything to gradually return to normal."

"Same~"

“Transactions in the market are all completed by people.”

"When people want to make a deal, they tend to follow human nature to make choices."

“These objective laws make the cycle model very reliable and allow us to see the details of its fluctuations, such as the time, market, force and speed, as well as the important reasons behind these details.”

“Therefore, I summarized the three major laws of the cycle!”

“First, the development of any event will not be a straight line, but an undulating curve.”

“A big rise in the financial market cycle is always followed by a big fall, and a big fall is always followed by a big rise.”

"But ordinary investors usually only see its fluctuations but fail to think clearly about the British relationship."

“Second, history will not repeat the details of the past, but will only repeat similar processes!”

"If we look back at the economic fluctuations during the Great Depression, we can always find some very similar details."

"But the causes behind these details, as well as the contingency, inevitability and randomness of their existence, are different each time."

“So I can make some predictions about the general trend or direction of the cycle, but I cannot accurately define its fluctuation depth and fluctuation time.”

“Third, the cycle will fluctuate around the basic trend line composed of countless equilibrium points. The direction of market development is either in the extreme or towards the extreme.”

When David reached this point, he looked at his mentor, Professor Bartlett, and after seeing a hint of approval in his eyes, he felt more relaxed.

"I once read a report in the newspaper that said that over countless years, the biological cycles of nature have been very regular."

“But the cycles of economic activities, business activities, and investment activities that people participate in are very irregular and can easily go to extremes.”

"Because most people only consider their own gains and losses. After obtaining some benefits, they will think about getting more greedily."

"So I think that to study cycles, we must first study people, understand human nature, and analyze the important factors that influence people when making important decisions, etc."

David held the slide with one hand and replaced it with a "diagram" he had prepared. He spoke with calm eyes and a serious expression.

"In addition to the three major laws of cycles I just mentioned, I divided them into three categories and nine types in order to study the cycles more systematically~"

"The first type of cycle, the fundamental cycle!"

“It includes economic cycles, government regulation cycles and corporate profit cycles.”

"The second type of cycle is the psychological cycle."

“It includes the mid-term sentiment cycle, risk attitude cycle and psychological equilibrium cycle of financial investors.”

“The third type of cycle is the market cycle.”

"It includes the stock market, credit market, distressed debt market, real estate market and commodity futures market, etc."

"So for the sake of convenience, I will classify them into market cycles."

“First, let’s look at the first type of cycle, the fundamental cycle.”

"I have already talked about the economic cycle and the government regulation cycle. Now I will mainly talk about the corporate profit cycle."