Financial topics

[Higgenbotham]

Posted Jan 26 2012

Cyclical Risk Patterns & Equity Prices

Nearly a year after the end of the Great Recession, we concluded that we were "approaching the most dangerous period of the business cycle to employ a buy-on-dips strategy." That turned out to be a prescient forecast that was followed by widespread stock market worries about a "double-dip recession."

This conclusion drew on an analysis covering six decades that pinpointed the stages of the business cycle at which equities run the greatest risk of corrections. Given the current market rally, we repeat the analysis to assess the risk of market corrections, and their likely magnitude at this stage of the business cycle.

Full Report: January 20, 2012: U.S. Cyclical Outlook

http://www.businesscycle.com/reports_in ... tails/1117

They're few and far between but I found one more who is on the same page as jcsok and me. ECRI has the reputation of being very accurate in calling recessions; in fact, I don't think they've ever missed.

[aedens]

In light of today's action, this looks like a trap that was set by The Forces of Darkness. t/f
Be nimble H

[OLD1953]

Indeed, I feel much the same way.

Currency in Syria and Iran has dropped to near worthless outside those countries, and this is going to eventually cause friction with Iraq.

http://www.vancouversun.com/news/Dollar ... story.html

Don't forget that Iraq is the place for Shiite pilgrims to travel, and that travel from Iran to Iraq is a big thing. If Iraq is going to insist on dollars instead of Iranian currency, there will be trouble.

[Higgenbotham]

Hig - I went all in today; have been riding 25% short since 1275, had GTC in at 1335 for 50% and at 1340 for 50% of usual trade size. Short 6E 100% for a week. The increase in aircraft carriers in the gulf, increased tension of Isreal/Iran caused me to purchase 100% of yearly diesel fuel for farm operation today. I haven't looked for when the next full moon will be, but it looks like the werewolves are about to be everywhere.

In that video, DeMark talks about the multiple recycling of his patterns. Last April, I talked about the upcrash from the April high, where there was an upcrash into the May top instead of a downcrash. This time around, there have been multiple upcrashes that are laid on top of each other, similar to what DeMark said (although his methods are not the same as mine). Any one of them could have ended the rally weeks ago. Specifically, the last upcrash starts at the December high. Trouble is, December was a double top, so finding the end of that pattern has been ambiguous. But I think the DeMark 13 does mark the spot.

[aedens]

Indeed, I feel much the same way.

Currency in Syria and Iran has dropped to near worthless outside those countries, and this is going to eventually cause friction with Iraq.

http://www.vancouversun.com/news/Dollar ... story.html

Don't forget that Iraq is the place for Shiite pilgrims to travel, and that travel from Iran to Iraq is a big thing. If Iraq is going to insist on dollars instead of Iranian currency, there will be trouble.

http://atimes.com/atimes/Middle_East/NB04Ak01.html
If more could see the fans stoking the burning embers fueled by the actual body's smoldering on the bonfires of ignorance.
Evil has a face and always will to burning self interest at others actual cost.

[Higgenbotham]

I would expect the beginning phases of a descent into a Dark Age to be milder than if an actual cleansing and regenerative process were to occur instead. In a descent into a Dark Age, one way to look at it is we continue to borrow more from the future instead of stopping at some point and replenishing the future. That is what clearly continues to happen, as we can see. There are many symptoms of that, but an obvious one is the failure to have enough children to replenish the population and we see that across all of the Western societies with Japan taking the lead. As Peter Drucker has commented, this is unprecedented.

The fifth horseman of the apocalypse
By Spengler

The essay below appears as a preface to my book How Civilizations Die (and Why Islam is Dying, Too).

Population decline is the elephant in the world's living room. As a matter of arithmetic, we know that the social life of most developed countries will break down within two generations. Two out of three Italians and three of four Japanese will be elderly dependents by 2050. [1] If present fertility rates hold, the number of Germans will fall by 98% over the next two centuries. No pension and health care system can support such an inverted population pyramid. Nor is the problem limited to the industrial nations. Fertility is falling at even faster rates - indeed, at rates never before registered anywhere - in the Muslim world. The world's population will fall by as much as a fifth between the middle and the end of the 21st century, by far the worst decline in human history.

Population decline, the decisive issue of the 21st century, will cause violent upheavals in the world order. Countries facing fertility dearth, such as Iran, are responding with aggression. Nations confronting their own mortality may choose to go down in a blaze of glory. Conflicts may be prolonged beyond the point at which there is any rational hope of achieving strategic aims - until all who wish to fight to the death have taken the opportunity to do so

http://www.atimes.com/atimes/Global_Eco ... 3Dj05.html

[aedens]

The vetoes drew harsh criticism from Security Council members that supported the resolution and who had amended it several times to ease those concerns

This is a dark day Higg. I can convey countless acronyms and initialisms as we all can on these dark intents. Withered hearts...
Some may see that we plan for the grandchildren for a reality the world ignores as the article points out from a older book.

[Higgenbotham]

A permanent reduction in population over some time scale longer than, say, a saeculum seems to be characteristic of a Dark Age as opposed to a normal crisis period. Naturally, this is a case of arbitrarily defining something as opposed to something else and giving it a name.

So how could a scale of population reduction that is 10 times that of the prior saeculum occur? My thesis is that a Dark Age scale population reduction can only come about through large scale individual moral and institutional failure. This is harder to quantify, but my previous post describes what that looks like as opposed to typical crisis period failure.

"Spengler's" article linked above elaborates on the meaning of the above 2 paragraphs posted a few months back.

Within the past 45 years, rationalizations for furthering the death of culture and civilization have been encoded into the belief system of the Western nation-state. As "Spengler" points out, it is beyond fixing. It's no longer understood exactly what it is that perpetuates a culture and a civilization and what does not. Technological progress does not and "Spengler" adequately points out the disadvantages of emphasizing technological progress on the birthrate and the linkage of that to a descent into a Dark Age (he dosen't use that exact term but alludes to it) but, at the same time, civilizations that encroach on indigenous or technologically inferior cultures cannibalize the cultures that they come into contact with. There doesn't seem to be any way out of that trap.

The tipping point will be reached when there is nothing left to borrow from the future and nothing left on the periphery to cannibalize.

[Higgenbotham]

February 5, 2012
The tipping point will be reached when there is nothing left to borrow from the future.
February 4, 2012
I am so short I look like a midget next to Tiny Tim.

October 19, 2003
With nothing left to borrow from the future -- and a single minded obsession with debasing the Dollar, policy makers better pull a rabbit out of their hat quickly, or the complacent equity market might have a rude shock. The bear market rally has done its job well. Almost everyone is back on board -- now that it is time to turn down again.

http://beta.finance-on.net/upload/Mario ... report.pdf

On October 19, 2003 the bubble had 4 more years to run. I am writing essentially the same thing on February 5, 2012. What may seem logical at the time can prove to be ridiculous in hindsight. Just because I can't see a way for them to borrow much more from the future doesn't mean they won't figure something out.

Be nimble H

I hear ya.

[Marc]

On October 19, 2003 the bubble had 4 more years to run. I am writing essentially the same thing on February 5, 2012. What may seem logical at the time can prove to be ridiculous in hindsight. Just because I can't see a way for them to borrow much more from the future doesn't mean they won't figure something out.

There's the parallel contrarian in me with that one. As for a Greek default taking place on March 20, 2012, it is certainly possible that it will happen (which goes against what I expected earlier), although I was thinking that a few recalcitrant hedge funds out there would cause the can to be kicked down the road further regarding such a default. But overall, I think that the Fed, along with other central banks, have enough firepower to keep kicking the can down the road past 2012, and when you stop to think about it, there may be another incentive to do so: in 2013, the Fed becomes 100 years old, and it would certainly make its centennial celebration suck to have an economic collapse before then.... —Best regards, Marc