what happens when the gap closes between economic reality and perceptions biased by marketing?

  • Fibonacci Pinwheel Datura
    Fibonacci Pinwheel Datura (Photo credit: cobalt123)

    Shelly Barineau

    I have read the prior article… I thought it was great at breaking down the “gap” of perception and actual fact…. But are you saying that marketing creates and perpetuates the “gap” while trading benefits from the closing of the “gap”?

  • J R Fibonacci Hunn

    Traders benefit from strategically diversifying across highly predictable price trends.

    There is an inherent gap between the perceptions of different people.

    English: Nearly octahedral diamond crystal in ...

    English: Nearly octahedral diamond crystal in matrix. (Photo credit: Wikipedia)

    Marketing can take large gaps and make them HUGE

    Like the diamond that costs $8 to acquire “at source” and then gets moved around and cut at a cost of $300 and then  is auctioned in New York for $8,000

    People in New York perceive those diamonds to be scarce.

    Diamond Ring

    Diamond Ring (Photo credit: Wikipedia)

  • Shelly Barineau

    Yes, agreed that marketing can take large gaps and make them huge. Are you saying marketing is source of economic problems?

  • J R Fibonacci Hunn

    With a cartel monopoly on supply and millions of dollars on advertising over the years, diamond jewelry has HUGE profit margins.

  • J R Fibonacci Hunn

    What do YOU mean by “economic pRoblems?”

    Starvation?

    Obesity?

    Obesity is a direct result of marketing.

    Starvation is more of an incidental thing than a direct product.

  • Shelly Barineau

    Well, no, I was meaning housing collapse and stock market downturn.

  • J R Fibonacci Hunn

    The coming flood of bankruptcies and foreclosures are the direct result of massive marketing of mortgages.

  • 8:54pm

    We already had a flood, didn’t we?

  • J R Fibonacci Hunn

    The way to look at it is that marketing created a temporary boom

    The stock market bubble is huge.

  • Shelly Barineau

    And when the gap closed…. Crash

  • J R Fibonacci Hunn

    Even things like the existence of 401Ks contributed to people being extremely complacent about investing.

    They think of investing as a tax shelter technique.

  • Shelly Barineau

    …and that’s a terrible idea because…. [why? … is it really so terrible?]

  • J R Fibonacci Hunn

    That is an awesome set-up for someone like me- but also rather frightening.

  • Shelly Barineau

    You mean ppl put more merit in the tax shelter part than the retirement benefits?

  • J R Fibonacci Hunn

    The tax exemption is the retirement benefit.

    However, when the complacent investors do what the marketers and sales people are trained to get the investors to do, then when the baby boomers start to really sell their retirement savings, all of those sell orders will crash the value of all of those portfolios.

    Again, 2008 was just a hint.

    Did you look closely at the 24 year chart of the Japanese stock market?

  • Shelly Barineau

    I did not look closely… Just read caption Abt “20 yr recession”

    So complacent 401k investor who follows advice of marketer is doing what everyone else is doing… And when they all go to sell the “same” portfolio=/no value…

  • J R Fibonacci Hunn

    Yes
    When there are 10 houses for sale for every qualified buyer, prices collapse.
    Same for stocks or anything else.

    In Japan, the stock market was at 40000 yen in 1989, then fell to below 8000, now at 14000

  • Shelly Barineau

    And that seems so obvious when you say it that way

  • J R Fibonacci Hunn

    It is obvious. It takes a lot of marketing to distract people from the obvious.

    Gay marriage is a huge PR buzz.

  • Shelly Barineau

    How did I know that was coming

  • J R Fibonacci Hunn

    A huge amount of “News” is manufactured.

    Boston bombing is a huge media sensation too.

  • Shelly Barineau

    This is what you and Chandi discussed today?

  • J R Fibonacci Hunn

    Not really.

    She was driving. I talked. She listened.

    Then she arrived where she was going and I wrote the blog.

  • Shelly Barineau

    Elaborate on Boston

  • J R Fibonacci Hunn

    I wrote about Boston a few days ago.

    But somewhat indirectly.

    Just consider that the media loves that story.

  • Shelly Barineau

    Yes, that is understood… And the public loves the story as well

  • J R Fibonacci Hunn

    There are huge teams of people who create our cultural programs.

    Obvious cases are public schools and the entertainment industry.

    Pro sports is a huge marketing industry creation.

  • Shelly Barineau

    Btw, jumping back to marketing… You seem to vilify it, yet you are in marketing (though you say you choose to market what the public is actively seeking and simply tell the public your clients offer their desired target). I find that interesting….

  • J R Fibonacci Hunn

    Golf existed in the 19th century, but there were no golfers making $2 million to appear in a TV ads.

    I did not vilify marketing. I stated the obvious.

  • Shelly Barineau

    Okay, in a negative light…

  • J R Fibonacci Hunn

    without marketing, the immense transfer of wealth that is about to happen would not be possible.

  • J R Fibonacci Hunn

    Imagine that a golf champion gets million of dollars to do car commercials. Same for movie stars, etc.,,

  • J R Fibonacci Hunn

    We complain that a CEO gets 300 times a minimum wage, then we turn on the TV and watch people who make 30 times what those CEOs make because we watch them run up and down a field after a ball.

    I am not vilifying any of this. It is quite amazing.

  • Shelly Barineau

    But you are saying it this way bc sports equates running behind a ball.

    But a sports enthusiast would describe it differently

    The skill involved, the teamwork, the talent, the drive, the dedication

  • J R Fibonacci Hunn

    Consider the alteration to our culture if instead of owning TVs and monthly cable, more people traveled once a year to a developing nation to visit some poor people or even to volunteer in their local area. What if instead of gay marriage, there was a huge PR surge to volunteer at your local schools.

  • J R Fibonacci Hunn

    I love sports.

    I used to coach soccer.

  • Shelly Barineau

    You love sports? Are you sure?

  • J R Fibonacci Hunn

    That is not the point. We have a culture of national celebrities. It is very odd from a historians perspective. Marketing and mass media created it.

  • Shelly Barineau

    I swore you said you did not [love sports]

    But yes, not the point

  • J R Fibonacci Hunn

    I do not watch sports much on TV.

  • Shelly Barineau

    Are you sure marketing created it? Or did they just tap into it?

    Meaning its what We WANT to see, not what we are told we want to see

    There is no controversy in volunteering at schools

    But there is on gay marriage… And marketing did not create that… People’s beliefs and values did

    Marketing and pr and media just tapped into it

  • Btw, I’m not saying *i* prefer to hear abt gay marriage over more meaningful subjects like killing bees… I’m saying the general population does… Which is beneath me as I sit in the snobby, special population of dimwit senseis

  • J R Fibonacci Hunn

    dimwit senseis. that is good. short and sweet.

    Yes, marketing created a massive industry of professional sports.

    it was quite deliberate.

    even just a few decades ago, there was a huge shift in the marketing of pro basketball

    Mega-stars were created. Michael Jordan was always good. When Nike signed him in to a long-term contract, they out a whole PR team behind him- dolls and so on. The NBA went from team-oriented marketing to marketing individual players: such as “Kobe.”

    There were stars prior to that, but not mega-stars. Jordan, Shaq, Kobe, and others became THE faces of pro basketball.

    There are also businesses like pro wrestling which are theatre rather than sports, but marketing created that industry. There was pro wrestling in the 1950s as well, but no Hulk Hogan or Dwayne Johnson (“The Rock”) who went on to become actors in Hollywood.

    It is a culture of celebrity.

    In the record industry, Elvis was “made.” The entire “boy band” and teen idol phenomenon are entirely results of marketing: the monkees were all marketing, the back street boys, new kids on the block, even groups like Journey were CREATED by marketers.

  • J R Fibonacci Hunn

    Neal Schon (of Journey) was playing guitar with the touring band of Carlos Santana. A few other musicians were assembled and then a search was done… by the manager hired by the band… to find a lead singer that could make them financially successful. They were already top musicians. They were barely making any money though. The manager found Steve Perry. The band never got along well with him off-stage, but “commercial rock” or “corporate rock” filled arenas like no group since the Beatles.

  • J R Fibonacci Hunn

    The Beatles were also a landmark in the history of… marketing.

    What is s distinctive about Elvis and the Beatles? They were also movie stars. they were not just musicians. they were celebrities.

    Anyway, yes controversy is a big part of the job of the media. they sensationalize and scandalize and stir.

    JFK and many other US presidents were well-known for their infidelity and extramarital affairs. With Bill Clinton, his (alleged) infidelity was used for political blackmail.

    the marketing of our political system is too big a subject for me to focus on in this format.

    I will say that if we analyze the US government AS IF it is entirely theatrical, like similar to pro wrestling, then a lot of very odd patterns are not so odd.

    We tend to presume sincerity on the part of politicians, then create an uproar when they do not do what they promised during their campaigns.

    How many times does that need to happen before people start to question the honesty of the whole system?

    Why do some politicians seem to reverse political positions like actors playing two different roles in two different movies?

    Could it be that they are just reading a script that someone else wrote?

    In fact, aren’t we aware that they are doing exactly that?

    I will not say a lot more about this now, but when people say things like “lobbyists have taken over the government,” I ask things like “when exactly?” Lobbyists form governments, fund governments, and direct governments. Lobbying was not suddenly invented last Tuesday.

    Our culture is an imperialistic culture. That means we take over populatuions by force and install occupation governments over the masses.

    the british did it in India, in north america, and so on.

    The US now has permanent military bases in more than one country. That already should be a little bit odd right there. Why do we have permanent military bases in Japan and Germany and Iraq and so on?

    Oh, maybe we do not CALL the bases in Iraq permanent, but it’s been a good 10 years, right?

    10 years in to the US occupation of Germany or Japan, we may not have called the US military bases there permanent either.

    In some places, the US eventually withdraws enough troops that it closes or sells bases.

    However, fundamentally, the US is an expansionist global police state.

    We MARKETED communism as our excuse for a few decades.

    We MARKETED other excuses prior to that (back when the USSR was our ally).

    Today, we MARKET terrorism and other excuses.

    Again, I am not vilifying any industry or any country. I am simply stating what might be rather obvious, but rarely stated directly.

    re “But there is [controversy] on gay marriage… And marketing did not create that… People’s beliefs and values did”

    Values and beliefs can be marketed. That is what public schools are for. That is what commercial advertising is for. That is what mainstream religions are for. They promote specific sets of beliefs and values.

    Values and beliefs are not genetic. They are cultural. They are patterns in language, patterns of attention, patterns of perception.

    When people perceive that borrowing lots of money to invest in real estate is “wise,” then does that perception effect their behavior?

    When it is borrowed money, are people more or less diligent about studying the reality of market conditions?

    When there are tax breaks for real estate, does that effect behavior?

    When there are massive networks of commission-earning realtors putting little magazines in front of the grocery store, does that effect the attention and behavior of the masses?

    It is not deceptive exactly. It is simply influence.

    Some things involve intricate deception. Some things, like marketing of some pop star or some movie, are basically simple.

    Currently in the US, there is historically low amount of savings. There is a historically high amount of debt. There is a historically high amount of speculative investing (like in stocks and real estate).

    All of those are the intended outcomes of marketing.

  • What we have is lots of over-priced investments, with prices ballooned by an aggressive mortgage industry, and record low levels of savings. If I showed you charts of all of those things, (or if you researched it yourself and found multiple sources all indicating the same thing). do you think it would be a matter of whether or not those marketing-influenced behavioral trends will reverse, or simply a matter of when and how fast they will reverse?

  • There is no real controversy in economics. However, simple statements of the obvious are absolutely taboo within our mainstream media. That would be counter to the sole function of the media in regard to influencing attention, perception, and behavior IN A WAY THAT IS PROFITABLE TO THE RULERS/ RULING CLASS (for instance, in the case of the US, a small groups of bank owners to whom the US Treasury owes the majority of truly vast massive amounts of debt- similar in Greece, Japan, etc).

    English: A picture I took on my senior trip

    English: A picture I took on my senior trip (Photo credit: Wikipedia)

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