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  • The Saturated Macroeconomy's Mathematically Perfect Predictable Albino Black Swan occurring 26 April 2011 2 comments
    Apr 23, 2011 9:01 PM


    The Saturated Macroeconomy's Mathematically Perfect Predictable Albino Black Swan occurring 26 April 2011


    The simple math defining the operating self-balancing characteristics of Earth's Small Macroeconomic Universe.

    Why did Google began its nonlinear descent 6 days earlier than the Wilshire?

    The macroeconomy and its integrated debt dependent, asset supply and asset valuation dependent, job and wage interdependent, asset derivative equity, bond, commodity and currency elements is a highly ordered and bounded system.

    The macroeconomy's asset valuations conform to highly ordered quantum fractal patterns that confer on the the macroeconomy the characteristics of a hard science.


    There are only 2 to 3 trading days left in the  Wilshire's 12 August 1982  - 11 October 1990  99/247.5 month x/2.5x fractal.

    There is an average of 21 trading days per month. The 99 month base fractal represents  2079 trading days: 2158 trading days + 21 trading days integrated from the preceding month.  The 2.5x second window has an expected  5197.5 trading days.


    11-12 April 2011 represented the  247 month conclusion of a 247.5 month and 5187-88th trading day of the predicted maximum 5197.5 day 2.5x second fractal.  Monday 25 April 2011 represents the 5196th day with a residual 1.5 day final window to complete expected historical nonlinearity.



     Within the final 3 days  and after the final saturation day on 25 April 2011 with the Dow expected to have a nonlinear gap to a 3 year  high and ending on the the low of the day, the world will see its greatest nonlinear crash of equity and commodity valuation.

    The Wilshire will have a similar gapped higher minutely opening pattern but will not exceed its 18 February 2011, the secondary high to its predicted 11 October 2007 nominal high


    The Macroeconomy's Quantum Fractal patterns.
    (From the 2005 Main Page of the Economic Fractalist http://www.economicfractalist.com/  )

    Both the degree of valuation and the cyclical time course of valuation evolutions appear to conform to range bound near quantum-like units and quantum related Fibonacci numbers. While the absolute degree of valuation is influenced by the absolute interest rate, the percentage or proportionality changes of valuations from highs to lows and lengths of time to decay and intra-cycle nodal points appear to conform to these range bound near quantum units.    

    The ideal growth fractal time sequence is X, 2.5X, 2X and 1.5-1.6X.  The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x. The third cycle 2X is primarily a growth cycle with a lower saturation point and decay process followed by a higher saturation point. The last 1.5-1.6X cycle is primarily a decay cycle interrupted with a mid area growth period. Near ideal fractal cycles can be seen in the trading valuations of many commodities and individual stocks. Most of the cycles are caricatures of the ideal and conform to Gompertz mathematical type saturation and decay curves.    2005


    'The ideal growth (and decay) fractal time sequence is X, 2.5X, 2X and 1.5-1.6X.  'Most of the cycles are caricatures of the ideal."

    From the Wilshire's 6 May flash crash: 12/30/24/19 days :: x/2.5x/2x/1.6x

    From the 6 May 2010
    flash crash a caricatured 12/30/24/19 day or 82 day four phase x/2.5x/2x/1.6x series can be observed ending on 31 August 2010. The actual nodal lows and highs were 14/27/24/20 days with a low on day 12 of the first fractal, a lower low on day 14 pointing to a lower low second fractal ending on day 27 or 1 July 2010 (or day 29 of a 12/29 fractal) with a higher low on day 30 pointing to the subsequent valuation rise   to day 24 of the third fractal and  finally to a higher low on day 19 or 31 August 2010 of the fourth fractal.

    This 6 May 2010 to 31 August 2010 12/30/24/19 day or 82 day four phase  growth and decay fractal series serves as the base fractal for maximum growth on 2x: 184 days series occurring on 25 April 2011(Good Friday 22 April was a trading holiday.
    This final growth day is within 1-2 days of the very terminal portion of a maximum  5197.5 :: 2.5x to the 2158 day 12 Aug82 to 11 Oct base.


    'The ideal growth (and decay) fractal time sequence is X, 2.5X, 2X and 1.5-1.6X.  'Most of the cycles are caricatures of the ideal."  "A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x."

    The 6 May 2010  flash crash was itself contained within the third 12 day subfractal of a 31 March 2010  6/15/12/9 day :: x/2.5x/2x/1.5x fractal and was at the 221 day second fractal terminal nonlinear 2x-2.5x  end of  the 6 March 2009 88/221 day :: x/2.5x fractal with two trading days of the 221 days half trading days. 6 May 2010 was the 208th day of the 221 day second fractal sequence.

    SYNCHRONIZED SECOND FRACTALS


    "A sudden nonlinear drop in the last 0.5x time period of the 2.5X is the hallmark of a second cycle and characterizes this most recognizable cycle. After the nonlinear gap drop, the third cycle begins. This means that the second cycle can last anywhere in length from 2x to 2.5x."

    As of 24 April 2011

    1695                  93/222 years    In the terminal 2nd fractal 2x-2.5x window

    1788                  70/153 years   In the terminal 2nd fractal 2x-2.5x window

    1982                   99/247 months In the very extreme 2nd fractal 2x-2.5x window

    Oct 1998            50/103 months In the terminal 2x-2.5x 2nd fractal window

    10 Oct 2008      185/453 days In the extreme terminal 2nd fractal window

    6 May 2010         82/163 days (25 April is the 2x 164th day (and expected  final high for the DJIA)

    16 Mar 2011       9.5/18 days 25 April is day 2x or 19 of 9.5/19 days and the expected final high for the DJIA

    25 April 2011 will be the final high the DJIA, ideally characterized by a minutely opening gap to a nonlinear higher high and ending on the low of the day.

    Why 18 February 2011 was the final high for the Wilshire?

     The Fibonacci saturation ratio : 1.618

    Both the degree of valuation and the cyclical time course of valuation evolutions appear to conform to range bound near quantum-like units and quantum related Fibonacci numbers. While the absolute degree of valuation is influenced by the absolute interest rate, the percentage or proportionality changes of valuations from highs to lows and lengths of time to decay and intra-cycle nodal points appear to conform to these range bound near quantum units. 

    Fibonacci ratios of 0.6 and 1.6 characterize maximum growth and decay in a maximally saturated range bound system. The 4th decay fractal time ratio is ideally 1.6x of the base : x/2.5x/2x/1.6x.

    The Wilshire is such a saturated system. the nodal of the 52 second week fractal from to 8 July 2009 to 1 July 2010 spanned 247 days.  The ideal base fractal x of a 2.5x : 249 day fractal would be 99.6 days. 1.618 x of this base fractal is161.1 days.

    For the Wilshire 18 February 2011 was the 162th day after the second fractal low on 1 July 2010.

    The Wilshire represents all US equities. It is supported by the total speculative available wealth. The 1.618x third fractal 100/249/162: x/2.5x/1.6x 18 February 2011 will not be exceeded. The 2x 200 day of the third fractal 100/249/200 lies as the 7th midpoint day between the Wilshire's 18 February secondary averge high on 6 April 2011 and the expected final secondary high on 25 April 2011.

    Why did GOOGLE collapse 6 days before the Wilshire's 26 April collapse?


    Google's 10 October 2008's base fractal of 31/70/84 days was 2-4 days shorter than the Wilshire's 31/70/86-88 day base fractal.

    The equity and commodity  collapse on 26 April 2011 will be the greatest in historical. Unprecedented nonlinearity can be explained in the simple nonstochastic saturation macroeconomic mathematical quantum fractal models described above and in 2005 The Economic Fractalist.

    Just like the ordered connectivity among energy particles in  physical energy space universe and descriptive mathematical models, there is connectivity between the asset valuation parts of the macroeconomic universe.  Time ordered growth and decay and interconnectivity of the macroeconomic system may have analogous time ordered fractal growth and decay and connectivity of subatomic energy particles and larger mass-energy elements  in the energy space universe.













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  • The Economic Fractalist
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    Author’s reply » The Predicted Decay Fractal Sequence:

     

    6 May - 31August 2010: Lammert quantum saturation macroeconomics in a nutshell.

     

    Monday 25 April, 2010 is the 164th day (2x) of the 82 day (x) 6 May 2010 to 31 August 2010 base fractal composed of a perfect Lammert averaged x/2.5x/2x/1.6x growth and decay pattern :: 12/30/24/19 days. The 6 May 2010 actual fractal nodal lows are14/27/43 days - the asset valuations exist within an integrated system; lower lows predict the direction of asset valuations.

     

    This 82 day base fractal and the subsequent 31 August 2010 64 day base fractal which is composed of two subfractals: 8/18/12 days and 7/15/10 days form the two interlocking fractal bases for the coming historical asset valuation collapse. On Monday 25 April 2011 the great Wilshire, summation of all US equity valuation, is expected to have minutely gaps to higher levels but not exceeding the February 18 2011 high - and potentially end on the low of the day.

     

    The area under the equity valuation curves represents the available speculative money to support asset valuations. The y axis is time and x axis is asset valuation. The system integrates a portion of preceding decay fractal into the next phase of growth. This is why in quantum fractal saturation macroeconomics uses a double counting system whereby a nodal low is designated as time unit one vice time unit zero and why larger fractal times units, for example months which incorporate the terminal portions of the lower order weeks are more accurate. Looking at the monthly chart for the Wilshire from the 6 March 2009 low, a x/2.5x/2x fractal or 5/13/10 months is easily discernible. This is a Lammert growth sequence first described in Urban Survival - a 1929 replay and later in the 2005 The Economic Fractalist main page. www.economicfractalist.../

     

    In its toolbox to fix or maintain the US macroeconomic tax generating engine(essential for debt obligation liquidation) the 1913 Federal Reserve has only two tools left in its tool kit: a hammer and a very large sledge hammer. This delicate engine will need some careful sledgehammer taps to loosen and remove bolts. Bolts are better removed with a proper fitting wrench; a sledgehammer is only likely to damage other parts of the engine with little on the bolts. While maintaining funding for social security, medicare, medicaid, US military government contractors and federal government workers, the use of the hammer of zero interest rates and sledgehammer of money fabrication is killing savers, traditional banking practices, and the middle class through commodity inflation. The Federal reserve's acceptable level of inflation appears to refer solely to wage pressure. There is no wage pressure, no need for the elite to be concerned about the little people having more opportunity in this saturated macroeconomy, because the central bank's hammer and sledge hammer mentality, in such an asset saturated environment primarily caused by the federal reserve's practices, has created such asset overvaluation of the common citizen's major holding, i,.e., real estate and such a coexisting and now collapsing bubble in the service sector - which after the stimulus package is now regressing. The sledgehammer approach of the central banks have defacto promoted only one group: the collective class of speculators, financiers, the moneyed elite, bankers, and this group's lobbied and bought politicians. The sledgehammer approach of the central banks - which is the central bankers' only end option and tool - is doomed to failed. While it might succeed in a Parker's brother game, it cannot succeed in a real macroeconomy system - it is failing. The bureaucracies and entire system needs to be reordered. Incentives have to be established to reward saving and actual useful job creation. Global merciless taxation of speculation and transactions on speculation trades must be established to crush the money changers and that avenue of worthless gain. History shows banking to be an incredible scam and central bankers central to the scam. Napoleon had it right. Ross Perot had it right.

     

    With regard to integration of preceding decay areas of the ongoing valuation curves, the 6 March 2009 second fractal from nodal low to nodal low 8 July 2009 to 1 July 2010 was 249 days in length. The ideal first fractal would be 100 days which is captured in a 5/13/10 month:: x/2.5x/2x growth fractal. The Wilshire's 18 February 2010 high was the 162nd day of a 100/249/162 day series. The golden Fibonacci ratio is 1.618. The global macroeconomy is at its saturation limits: outstanding bad debt will never to be repaid; a plethora of entitlements will never to be honored; housing mortgages are grossly beyond the market value; global housing supply relative to wages is disproportionally enormous, especially in China, completely disconnected from the laws of supply and demand; 2011 job numbers and job wages in the US are remarkably and historically ten million less than 2001 in spite of a growing population, young Americans face a wall of inopportunity,- and the Fed and world central bankers are swinging drunkenly, blindfolded, and without wherewithal, over sized sledgehammers that are causing more damage than benefit.. The global macroeconomy is at a multigenerational saturation point. Perhaps central bankers cannot discontinue what they are doing because they know they are so very responsible for the current state of overvaluation and oversupply.

     

    18 February 2011 is near the end of this saturation area. Valuation growth, even under the central bankers most ardent sledgehammer tactics to impossibly fix a complicated and elegant engine of macroeconomic balance, will not not proceed to higher valuations. In nature a limitation and bending of growth occurs at natural time ordered saturation areas. The Fibonacci ratio:1.618 empirically characterizes this limitation and the 162nd day, 18 February 2011, of the third fractal of a 100/249/162 day sequence (considering half trading days) is a reasonable retrospective saturation high.

     

    Now for predicted decay. How many times predicted and how many times wrong? Many. Many. Many. Edison too made a few bad bulbs; he knew the principal to be true; but he just didn't have right observation mix. (Perhaps he should have kept Tesla around).

     

    The predicted decay sequence:

     

    From the 6 May 2010 82 day base and the 31 August 64 day base a synergistic second fractal sequence is hypothesized with 25 April 2011 the exact 2x ratio (164th day) of the 6 May 2010 82 day base and the final higher high for the elite Dow and final lower high to the Fibonocci 18 Feburary 2011 averaged ideal 100/249/161.8 day fractal sequence for the US all inclusive great Wilshire.

     

    At the conclusion of the 31 August 2010 64 day base, a 13/30/33 day :: y/2-2.5y/2-2.5y day decay fractal (74 days) is observed for Wilshire. The historical greatest ever decay fractal starting on 16 March 2011 is an expected 10/25/25 day y/2.5y/2.5y decay fractal with the 19th day of the second 25 day fractal or 25 April 2011 - the final higher high for the DJIA and final lower high for the all-encompassing Wilshire. The third decay fractal of 25 days is expected to be an 8/18 day decay fractal with the break-down after the 15th day of the second 18 day fractal. The 15th day is day 128 2x of the 31 August 2010 64 day x base fractal.

     

    The ideal final completion of the lower low is expected on day 12 of a 8/18/12 day fractal which is day 2.5x or day 205 of the 6 May 2010 82 day x base fractal.

     

    The Federal will continue QE even if by sub rosa means, eg, the US central bank will give the Euro central banks 2 trillion of dollars; the Euro central banks give the US 2 trillion's worth of Euro's - and then lend to each other: its an incredibly collusive decadent money laundering money creation system. In the end monetization will destroy America's middle class via commodity price speculative inflation. The alternative is no better: jobless deflation. There is no solution other than real market painful retrenchment and dissolution of bad debt and asset overvaluation. The system is grossly unfair to America's new generations. It is a failed system where the worthless financial elite do artificially well in an contrived valueless added monetary system.

     

    New rules are needed. new leadership is needed. The great US constitution, blue print for fairness and honest opportunity - needs to be restored.
    25 Apr 2011, 05:52 AM Reply Like
  • The Economic Fractalist
    , contributor
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    Author’s reply » For the DJIA, the gapped high occurred in the last trading minutes on 21 April 2011. The Wilshire did make a final tertiary high to the 18 February high within the first trading hour on 25 April 2011.

     

    With 2 trading holidays on Friday and Monday, the European Market is now a trading day behind the US market.

     

    The DAX, representative of a market economy with the lowest debt ratio did have a mnutely gap on 26 April within the first two trading hours taking the index to a secondary high to the Fibonnaci 1.6x 18 February 2011 trading area.

     

    The great crash sequence is 10/19 to 20 of 25/25 days : : y/2.5y/2.5y as of 26 April 2011.

     

    In the last three years the financial industry has used the money system and central bank policy to skim dollars. During global retrenchment, these dollars will buy hard assets for dimes on the dollar.

     

    And history repeats itself ......
    26 Apr 2011, 05:24 AM Reply Like
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