Financial topics

[aedens]

http://www.forbes.com/sites/mikemyatt/2 ... velopment/

[jcsok]

A great short analysis of the death of empires for the last 300 years.

http://deflationland.blogspot.com/

[gerald]

This should help stimulate the economy ( sarcasm )----

Financial advice in the Obamacare era: Better start thinking about ways to decrease your income
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By Doug Powers • October 15, 2013 12:47 PM
**Written by Doug Powers
These pointers in the SF Chronicle will also be covered in the forthcoming book “Financial Advice in the Obamacare Era” in a chapter entitled “Pulling Yourself Down By Your Boot Straps”:
People whose 2014 income will be a little too high to get subsidized health insurance from Covered California next year should start thinking now about ways to lower it to increase their odds of getting the valuable tax subsidy.
“If they can adjust (their income), they should,” says Karen Pollitz, a senior fellow with the Kaiser Family Foundation. “It’s not cheating, it’s allowed.”
Under the Affordable Care Act, if your 2014 income is between 138 and 400 percent of poverty level for your household size, you can purchase health insurance on a state-run exchange (such as Covered California) and receive a federal tax subsidy to offset all or part of your premium.
[...]
For older people, getting below the 400 percent poverty limit could save many thousands of dollars per year.
I was going to ask if the Obamacare law provides funding to pay a bunch of demotivational speakers to encourage people to make less money, but that effect seems to be already built into the law. They thought of everything, didn’t they?
**Written by Doug Powers

[aedens]

https://duckduckgo.com/?q=Per+capita+UN ... S&kl=us-en http://www-958.ibm.com/software/data/co ... versions/1

http://multiplier-effect.org/?tag=minsky

[Higgenbotham]

The frequency of vibration in this analysis is 378 points on the S&P 500.

The red lines at 666, 1044, and 1422 are 378 points apart. 1044 is the key level because that is the highest point reached as the S&P 500 tried to recover before it crashed an additional 378 points in 5 months. It is also the low point before QE was hinted in August 2010. 1422 stopped the S&P 500 in April 2012 before further QE took place.

The orange lines are 1150 + 378 = 1628 and the market held there briefly in February of this year. The yellow lines are 1220 + 378 = 1598 and the market also held there briefly in April of this year.

The next lines are the green lines at 1370 + 378 = 1748.

WEEKLY.gif (46.03 KiB) Viewed 4782 times

Earlier this year I mentioned several cycles that indicated the S&P 500 should crash in the Spring. One was based on the idea that the time between the peaks of the Tulip Mania and the South Sea Bubble was approximately 83.5 years and that for various reasons it might also be expected that the time between the 1929 and a subsequent mania peak would be approximately 83.5 years, with a likely date of February 10, March 11, or April 10 on a new moon near the triple eclipse. The orange and yellow vibrational lines on the chart shown above did in fact hit in February and April of this year near those new moons. As the green line has been approached, this is a key time once again in reference to approximately 83.5 years ago, which was the time when the rebound from the 1929 crash peaked on April 16 and 17, 1930.

With regard to the eclipse cycles it's more common to have a solar eclipse followed by a lunar, with the triple eclipse and the lunar followed by a solar combinations less frequent. The current time is comparable to April 1930 in that there is a lunar eclipse followed by a solar, which makes this analysis easy. Those dates are:

Lunar April 13, 1930 and October 18, 2013
Solar April 28, 1930 and November 3, 2013

With the 1930 rebound high having occurred on an intraday basis on April 16, 1930 and a closing basis on April 17, 1930 that would equate to October 22 and 23, 2013. There are reasons to think the peak can come in a little earlier or a little later than those days if this timeline holds up.

As far as why the crash didn't happen in the Spring, I can only offer one theory. There was already an initial crash in 2008 due to the real estate bubble being bigger than the real estate bubble that peaked in the mid 1920s. When the mid 1920s real estate bubble peaked, it didn't affect the stock market and the bubble continued to grow.

In any case, I think the vibrational analysis above combined with this time analysis shows how the levels and the times fit together. If the idiocy and the greed are enough to blow out the 1748 level and this timeline, then the next obvious stop would be the resonance area in line with the main resonance of 666-1044-1422, which would be the round number of 1800.

April 19 (which is 6 months opposite October 19 on the calendar -the date of the 1987 crash) is a date in history that is known for bad things happening. Some recent examples are:
April 19, 1993 Waco Branch Dividian
April 19, 1995 Oklahoma City
April 20, 1999 Columbine
April 20, 2010 BP Oil Spill

For some reason, when bad things are about to happen, I've observed that the masses will engage in similar patterns of behavior, and the stock market is the best record of this. It may be that this time the stock market will be the thing in which the tragedy occurs.

I think cycles are probably valid, but the inaccuracy or misinterpretation is more attributable to those who are applying them.

Something else I mentioned awhile back was the 83.5 years between the major bubbles (Tulip and South Sea). The obvious answer is to go forward 83.5 years from September 3, 1929. The less obvious answer is that the market sold off, then made a lower peak on October 11, 1929 and 83.5 years from that day is April 11, 2013. If that were to line up with other cycles (it does), it might work, whereas March 3, 2013 doesn't line up with anything else that I am aware of. If the Fed is pushing this thing for all it's worth, the less obvious answers might be the right ones.

This would explain why a turn might be more appropriate now rather than on October 22 or 23. Disasters and stock market turns often occur on or very near April 19 and October 19. The 1987 crash bottomed on October 19. This is also true on a monthly basis. Over the past 7 years, many of the major stock market turns from a high have occurred on the 18th or 19th of the month. Some examples: July 19, 2007; May 19, 2008; January 19, 2010; February 18, 2011; October 18, 2012; September 19, 2013.

We can add to all that the fact that the 1930 rebound turned down just short of that April 19 time also.

I'm not certain that I fully understand your methodology, Higgenbotham, so perhaps I can try to restate this and you can correct me if I'm mangling your argument?

First, you're saying that the 1929 high and subsequent crash were in some sense 'on time' or natural, whereas the lows in 1932 and 1938 were caused by government policy, especially that of the central bank? That sounds right to me, and that is what Milton Friedman would say. What I'm not sure I understand is the connection between the September 2007 high and the 1929 high.

If there were a 'natural' point for our markets to crash this cycle, might that have been in 2001 rather than 2008 when it did happen?

You're right, I didn't explain the methodology used to determine what I referred to as being "on time". This is simply a stock market pattern I discovered that nobody else so far as I know has.

To see it, divide a piece of paper into 4 columns. Label the columns LOW, HIGH, LOW, LOW.
In the first column, write: 10-1857, 10-1896, 10-1935, 10-1974.
In the second column: 10-1890, 10-1929, 10-1968, 10-2007.
In the third column: 10-1896, 10-1935, 10-1974, 10-2013.
In the fourth column: 10-1935, 10-1974, 10-2013, 10-2052.

After you have done this, you will see that heading down the columns, all those dates are 39 years apart and heading across the columns those dates are 33, 6, and 39 years apart. All of the dates in the columns correspond to a major stock market high or low except for 1935 and 1968. Had the Fed not botched up and created two lows in 1932 and 1938 (about equidistant from 1935) instead of one in 1935, the 1968 high probably would have come in "on time" and there was an attempt to make a high in 1968 that came pretty close to being "the" high for that time period. Several of these highs and lows hit precisely to the month (10-1857, 10-1974 and 10-2007) while others are only one or two months off from the actual (8-1896, 9-1929) and one is 5 months off (5-1890).

I'm guessing that the natural point for our markets to crash was in 2009. The 2008 "crash" had to do with real estate and I believe created a first wave down in the stock market which liquidated the excess out due to the bursting of the real estate bubble. But believe it or not, I haven't given a great deal of thought as to whether there was a time at which the stock market "should" have crashed, so I would need to think about that some more.

In keeping with this discussion from 2011, the Fed has driven the expected October 2013 low to its polar opposite. That would be another reason to consider looking for a high in this time frame.

Last but not least is this. I checked the forums and those who follow him closely said the date was October 17 and the post was also made that day.

BULL'S-EYE MR. COWAN! HIS 2013+ FORECAST SHOWS ONCE AGAIN WHY HE'S THE UNDISPUTED CYCLE ANALYSIS KING!

Mr. Cowan's 2013+ forecast listed 3 dates as critical in 2013, Mid-May, Mid-August, and October. The indices have made triple tops on these dates!

http://cycle-trader.com/

[Higgenbotham]

A normal vibrational frequency in an index would be 360 points, due to the fact that there are 360 degrees in a circle. That can be noted several places in the chart above.

The May 2008 high of 1440 is 360 times 4. There are several key levels that are 360 points apart: the July 2010 low of 1010 followed by the May 2011 high of 1370 followed by the September 2013 high of 1730. All 360 points apart.

I think the fact that the natural frequency of 360 has been stretched to 378 could be problematic.

The stretch in the normal vibrational frequency can also be noted in the Russell 2000 index, which held the level of 1080 which is 360 times 3 three times before exploding higher recently.

378 times 3 is 1134. I am watching for the Russell 2000 to make an all time high at this level before collapsing. That will probably occur after the S&P 500 tops out at 1748. Just a guess.

[John]

Over the years, I've changed my mind about how stock market panics
work.

What I've heard all my life is that the stock market crashed on Black
Monday in 1929, because everyone went crazy and sold.

But we know that's not what happened at all. There was a panic on
Black Monday, but it ended a couple of days later. The reason that
the market kept falling was because of deleveraging and margin calls.
In other words, the "emotion" ended quickly, and after that it was all
driven by solid economics.

Is the market overpriced today? Quite possibly not. It's possible
that it's in equilibrium because of the $85 billion monthly QE. So
even if there was a momentary "panic," it would die quickly and the
market would recover because the $85 billion keeps pouring in.

This would mean that a crash CANNOT occur at this time, or as long as
the $85 billion continues. For a crash to occur, something drastic
would have to occur to cause disequilibrium - perhaps a war or perhaps
tapering.

The same reasoning, incidently, applies to Europe and China, where the
stock markets are also being held up by a flood of liquidity.

But the bottom line is that a crash is not emotional, and it's not
caused by a panic. It's caused by a sustained deleveraging that
results from a change in underlying fundamentals. It's possible for
the panic to trigger the deleveraging, causing a vicious spiral
downward and crash, but the panic is not the cause of the crash.

[Higgenbotham]

I think weak stream made a good argument a couple years ago. There's always money pouring in at the top of a bubble but at some point money flow makes no difference. Hussman had a discussion on that awhile back that is worth reading.

There is indeed the possibility of a panic at any time now as so many potential triggers from the Euro mess to Japan sliding to oblivion to a panic in China. I don't think, however, we are that close to the "Big Kahuna" that will bring us to Dow 3000 or thereabouts yet. The reason is that most market participants believe wholeheartedly in the Federal Reserve's ability to stop any slide. When this faith begins to fade, all hell is going to break loose.

When a bear market happens investors always filter the news negatively no matter and that would include anything the Fed does. Back in late 2008 and early 2009, with the Fed pouring money in, the market collapsed every time Geithner and Bernanke opened their mouths.

Following the Fed to 50% Flops

John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy

One of the most strongly held beliefs of investors here is the notion that it is inappropriate to “Fight the Fed” – reflecting the view that Federal Reserve easing is sufficient to keep stocks not only elevated, but rising. What’s baffling about this is that the last two 50% market declines – both the 2001-2002 plunge and the 2008-2009 plunge – occurred in environments of aggressive, persistent Federal Reserve easing.

It’s certainly true that favorable monetary conditions are helpful for stocks, on average. But that average hides a lot of sins.

Strikingly, the maximum drawdown of the S&P 500, confined to periods of favorable monetary conditions since 1940, would have been a 55% loss. This compares with a 33% loss during unfavorable monetary conditions. This is worth repeating – favorable monetary conditions were associated with far deeper drawdowns.

Ditto for the 2008-2009 market plunge. Persistent monetary easing did nothing to prevent a 55% collapse in the S&P 500.

http://www.hussmanfunds.com/wmc/wmc130603.htm

It's caused by a sustained deleveraging that
results from a change in underlying fundamentals.

Hands-down, the worst-case scenario is a market that comes off of such overextended conditions and then breaks trend-support in the context of an economic downturn. That’s not something we observe at present, but it is something to keep in mind, as I doubt that we will avoid that sequence over the completion of the current market cycle.

[Higgenbotham]

To me, the bottom line on the money flow argument goes back to what the late Anna Schwartz said when she said Bernanke should be fired for fighting the last war. No amount of money can save a civilization or a stock market that is insolvent and can't operate at a profit on a standalone basis. Some are trying to make the argument that the government and the stock market are somehow separate. When the US government bond market collapses (and it has been falling slowly for a year) the stock market will die with it no matter how much QE money flows. The only question is when. The US government bond market is the last firewall. When that firewall goes there will be utter panic.

I think that we're going to see eventually a series of bankruptcies. And I think that the rise in the interest rate is probably the fatal sign which is going to ignite a derivatives crisis that is going to bring down the derivatives system. There is something like a quadrillion of derivatives and most of them are interest rate derivatives. The spiking of the interest rate in the United States may set that off.

--Hugo Salinas Price (transcribed from the link above)

The stock market should already be down by some amount from the top when this happens. My guess is a flash crash type of incident will have already occurred to take it down from the top before the big one hits.

[aedens]

http://nypost.com/2013/10/19/us-quietly ... -pakistan/

Red or Blue makes no difference since its just a ear tag color in the new grain colony.

http://en.wikipedia.org/wiki/Blat_%28term%29