Seeking Alpha

The Economic Fr...'s  Instablog

The Economic Fractalist
Send Message
  • The 2011 Day Unit Devaluation Crash Sequence Using Ideal Lammert Second Fractal Nodal Lows And The 6 March 2009 Lammert Ideal Four Phase Fractal Expected Nodal Low 4 comments
    Jun 4, 2011 6:01 PM
    The 2011 Day Unit Devaluation Crash Sequence Using Ideal Lammert Second Fractal Nodal Lows And The 6 March 2009 Lammert Ideal Four Phase Fractal Expected Nodal Low

    A Precise Prediction of the Crash Devolution Pathway must be prospectively identified to validate the simple mathematical model of Saturation Macroeconomics.

    Most reasonable people are aware that a great equity-commodity 'correction' is coming, timed with US congressional negotiations on the debt ceiling, Moody's warnings about lowering of US debt credit ratings, expected 3rd quarter decreased global earnings in the  aftermath of the Japanese earthquake, the sudden deceleration of job growth in the US economy, the PIGS Euro insolvable debt problem with possible dissolution of the European union and bondholder's incipient assumed losses,  the mismatch between the owners of bubble valuation priced and now underwater valued assets and expected decreased wages to support that de facto debt enslavement, the decline of US manufacturing replaced by the negative value added financial industry, the real conditions of a bankrupted  US major banking system, the massive 14 trillion dollar debt load of US citizens which limits further desire for increased debt load, US college student debt load that cannot be repaid under declining economic conditions, bankrupted US states and local governments whose entitlement programs including state pensions cannot be sustained, the 5 trillion dollars spent by the Federal Reserve  and US government producing little realized GDP gain and even less real economic gain by the average citizen(but very much preventing an earlier recession/depression), the Chinese real estate bubble with empty towns now ready to implode, the now late collapsing Australian real estate bubble, the US college industry which is not delivering promised jobs and whose support by US federal funds via student loans will undergo retrenchment, the leanings toward earlier 20th century  more responsible lending parameters with a requirement of a down payment prior to loan initiation, the continuing short sided greed  of rich elite and their control over the rich man's party in congress to prevent a return to an earlier 1950's 1960's 1970's  period of taxes adjusted to income to promote the good and security of the entire system..... et. al., et. al, et; al.

    Most reasonable people ..... now expect .... a sizeable equity-commodity correction with exiting money flow into the transiently more stable sovereign debt instruments hence the 3 percent US ten year note. (It will reach historical 150 year low interest rates during the equity-commodity crash valuation).

    The empirical science of saturation macroeconomics identifies repetitive fractal patterns of growth and decay that define the system.  The patterns define its time dependent growth expansion limits and its nodal time periodicity. 

    Saturation Macroeconomic's  empirical mathematical ratios which correlate to the entire system's internal summation activity are what they are. The empirical numbers and relationships  that define gravity, Planck constant, the speed of light et. al. are what they are.  All of these numbers are based on the internal operations of the energy universe and the interactions of its most elemental components within space. Saturation Macroeconomics is a part of that larger system.

    Part of Saturation Macroeconomic's theory and construct is that while artificial banking/lending/money creation measures can distort valuation highs and lows and can extend and maintain asset valuation highs further toward the end of a natural fractal cycles, these distorting measures cannot alter the actual time for ideal fractal cycle nodal low valuations.

    The simple fractal mathematical patterns are identified in the Main Page of the Economic Fractalist:    http://www.economicfractalist.com/

    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. 



    The US long first and second fractal patterns start in 1789 and 1858 respectively  and are 70/153 years :: x/2-2.5x

    The 153 year second fractal beginning in 1858 is composed of two subfractals 1858 to 1932 and 1932 to present(2011)

    The 1932 to present fractal is composed of a 17/33/31 year fractal series with nodal lows in 1949 and 1982.

    Valuation growth since the 70/140 year :: x/2x series ending in 1998 has been maintained via a series of overzealous credit expansions: the LTCM bailout, Internet bubble, real estate bubble,  the US Federal Reserve 2008 750 billion banking credit injection and Tarp et. al programs  and last two years of world-wide central banks 8-13 trillion dollar equivalent 'credit' push on string. cash for clunker program.

    The last 31 year cycle of the 1932  17/33/31 year series  starting in 1982 was the US hegemony's last hurrah, using the wealth, responsibility, and innovations accumulated by the earlier generation in the 33 year second cycle from 1949 to 1982 as the foundation and  leverage fulcrum to allow US politicians, greedy non nationalistic Unamerican CEO's, unreasonable greedy unions, the corrupt and amoral Wall Streetprofiteers and negative value added financial industry ... to systematically cannibalize the great solid economy that once was the United States. All that is left is a leveraged carcass, and even now the greedy elite gnaws the last meatless sinews of the picked skeleton ....

    The Wilshire is proxy for the macroeconomy system's leveraged and facilitated asset valuation system. Wall Street and their defacto owned  politicians have created  system of favored tax breaks over gains made from personal saving accounts. This has caused favored entry of wages into this casino that the financial industry manipulates and steals wealth from with negative value added to the real economy. Ultimately the concocted  leveraged rules have resulted in the current awful outcome the system has produced. The  rules created by the super rich and financial industry have  placed expedient dollar gains by any extractable means above the stable sustainable  gains of the real citizen's economy. The economic security of the nation has been directly terrorized by these economic Wall Street carbombers

    Since 1982 the Wilshire, in this leverage environment, has grown 34/83 of 85 quarters (3 month time units) :: x/2-2.5x.

    The 1990 83 month second fractal to the 1982 34 quarter base is composed of 17/34/34 quarters :: x/2x/2x.  Compare the fractal pattern to the Main Page paragraph.

    The last 34 quarter fractal of the 17/34/34 quarter sequence is compose of three monthly fractal sequences:

    11/27/22/17 months :: x/2.5x/2x/1.5x

    2/5/5 months :: y/2y/2x  (the final 'x' denotes transitional fractal postiive growth)

    (a transitional fractal from decay to growth where the first 2 months is part of the 17 months of antecedent 4 phase fractal and the last 5 months which is the base fractal of incipient growth of the follow-on fractal series) and that follow-on fractal series

    5/13/12 months :: x/2.5x/2x as of June 2011.

    A natural x/2.5x/2x/1.5x  fractal progression which would complete the  ideal 1982 34/85 :: x/2.5x quarter first and second fractal series would be 5/13/10/7-8 months. (6 additional months from June 2011 would represent 2 additional quarters.) (The 5 month first fractal base is 'short and a 5-/11/9/7 month series is also appropriate.)

    The focus is on the Wilshire 6 March 2009 final 5/13/12 months.

    From the 6 March 2009 low there are five daily nodal low fractal sequences of interest, 3 are first and second fractal series x/2.5x and 3 are four phase series x/2.5x/2x/1.5x.:

    FRACTAL SERIES  1:    x/2.5x   88/221(220) days

     From the  6 March 2009 low :: x/2.5x  :: 88/221 days The 6 May 2010 flash crash was day 208 of the 221 day sequence within the 2x-2.5x  terminal portion of the second 221 day second  fractal. 2 of the 221 days were half trading days making the nodal low exactly 220 days or exactly 2.5x of the 88 day base fractal.

    FRACTAL SERIES 2:  x/2.5x/2x/1.5x    6/15/12/9 days

    Within the terminal portion of the 221 (220)day starting with a base fractal of 6 days from 31 March to 8 April 2010 a fractal a 6/15/12/9 day :: x/2.5x/2x/1.5x fractal is observed with the 6 May 2010 crash day day 7 of the third fractal and ending on day 9 of the 4th fractal on 25 May 2010 which is day 221(220) of FRACTAL SERIES 1

    FRACTAL SERIES 3: x/2.5x/2x/1.5x         88/221(220)/176/132 days

     88/221(220)/176/132 days From the 6 March 2009, this is the ideal x/2.5x/2x/1.5x series. Notice that the time length of the sum of the first and second growth fractal exactly equals the sum of the third growth fractal and the fourth decay fractal.
    This summed length is 308 days (There half been more half trading days). Using 25 May 2010 as end of the 221(220) day  second fractal to the 6 March 2009 88 day base, the Wilshire has finished as of 4 June 2011 day 260 of 308 days to its final ideal x/2.5x/2x/1.5x 4th fractal nodal low. which will occur in 48 more trading days.

    The 3rd 2x and 4th 1.5x fractals of this idealized series has been distorted and caricatured by the 5-10 trillion dollars of artificial support of the Federal Reserve including the very necessary 50 billion dollars a month purchases of US debt instruments. Compare the monthly purchase of US debt instruments by the Fed  with the average ten billion a month inflows into the equity market.  The end of QE 2 and the above mentioned underlying conditions will occur in the
    final 48 trading days of the 308 day summed 3rd and 4th fractal.  The expected final nodal is in 48 trading days.

    The integrated fractal weakness of the market is characterized by the Wilshire's  lower low on 1 July 2010 of the next fractal series

    FRACTAL SERIES 4.  x/2.5x/2x/1.5-1.6x   14/27/24/20 days or  using secondary lows  12/3024/19 days

    This is a curvilear transitional fractal series connecting the first 88 day and the second 221(220) fractal series to the third growth fractal. This daily fractal series nodal low to low occurs from 6 May 2010 until 31 Aug 2010 and is a 14/27/24/20 which is a caricatured form of a 12/3024/19 day fractal :: x/2.5x/2x/1.6x spanning 82 days. Noticed that within the first 14 day  and the second 27-28 days there are secondary nodal  lows (and third fractall 2x high)that fit exactly a 12/30/24/19 sequence. During this time decay in Wilshire valuation is transitioning to growth; it is a curvilear fractal sloping down for fractals 1 and 2 and then sloping up for fractal s 3 and 4.. The 82 day fractal series is the base sequence for the next FRACTAL SERIES 5 nodal low.

    FRACTAL SERIES 5.  x/2.5x  82/205 days

    This 82 day 4 phase growth and decay series becomes the base for an 2.5x expected nodal. As of 4 June 2011 the Wilshire has completed 192 days of an expected 205 day (2.5x of the 82 day base) nodal low. An expected 2.5x nodal low will occur in 13 trading days.

    FRACTAL SERIES 6. x/2.5x     64/160 days
    From the 31 August 2010 low a 64 day nodal low to nodal low base fractal is formed.  As of 4 June 2011 the Wilshire has completed day 129 of an expected 160 days. (2.5x the 64 day x base fractal) A nodal low is expected in 31 trading days.

    The prediction of nodal lows using the empirical science of Saturation Macroeconomics:

    Using FRACTAL SERIES 5. 6, and 3, from 4 June 2011, major nodal low will occur in 13 days , 31 days , and a final low in 48 trading days. Units are in days and trading halts will extend the time frame.

    The daily predictions are
    6 -10 June a lower low on June 6 with an ending above the 3 June low. trending higher valuations thru the end of the week.
    June 13 a major devaluation below the 3 June low.
    June 14 an increasing valuation day
    June 15 a lower valuation below the the 13 June low
    June 16 -17 and  June 20-22 lower lows with a nodal on 22 June which is day 205 of FRACTAL SERIES 5: 82/205 day.

    An 8 day base fractal will be formed between 13 June and 22 June 2011. This will form the base for an 8/19/18 day decay fractal with day 19 of the second decay fractal a nodal low and the 160th day of Fractal SERIES 6:   64/160 days.
    The final low will occur in additional 18 days or day 308 in Fractal SERIES 3 where the length of the first two fractal series of 308 days equal the sum of  length of the final 3rd and 4th fractal series.

    This would put the final low in August 2011.

    How low will the Wilshire fall?

    Mutual fund cash reserves are at a historical low. The equity market has been artificially leveraged  to a valuation which is inconsistent with the underlying health of both the real economy and debt burdened banking industry.  Too much and too overvalued real estate supply and coexisting  unpayable debt burden and unpayable entitlements - including the 1980-2011 new  tax  entitlements given to  the rich elite by their paid for politicians - so absolutely divorced from Roosevelt's or Eisenhower's plan for a secure and strong America - are the invisible forces of the macroeconomic system that will contract asset valuations. (Perhaps one day even US sovereign debt will be regarded as an entitlement.)

    How low will the Wilshire fall? 

    Much lower than needed had reasonable and prudent men and women established and followed reasonable and prudent rules with the goal of citizen fairness and opportunity and promotion of national security and real sustainable economic trading power.

    QE3, QE4, QE5, QE6, QE7, and QE8 will immediately provide a floor for the US economy.  Rules regarding debt slaves to mortgage valuations -  criminally leveraged by benefited financial institutions - will require immediate attention and reduction. New unencumbered banks are needed - banks who business is making money from lending not speculating and hawking in the equity and commodity markets. Taxes on speculative markets need to be considerably higher than on savings. Taxes on trading speculative leveraged assets need to be appropriately high to discourage this negative value added activity.

    New good rules need to be developed to replace the old bad rules.

    Finally ... every system is perfectly designed to yield the results it gets.
Back To The Economic Fractalist's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (4)
Track new comments
  • acrabbe
    , contributor
    Comments (5) | Send Message
     
    Strong conviction.
    8 Jun 2011, 12:22 PM Reply Like
  • The Economic Fractalist
    , contributor
    Comments (53) | Send Message
     
    Author’s reply » Wilshire Growth till Friday 10 June?

     

    ... was declining growth :: 6/15/15 hours :: x/2.5/2.5x

     

    Indicative of a collapsing valuation market.....

     

    bigcharts.marketwatch....
    10 Jun 2011, 08:11 PM Reply Like
  • ex umbra
    , contributor
    Comments (19) | Send Message
     
    steel and bank stocks positive on June 10th. Both this and recent strength in natural gas futures . . . possibly suggestive of large scale infrastructure development as stimulus . . .

     

    also, look at TLT chart. It has top formation. And it did not make new high June 10 even though SJB was up and SP500 fell. Part of softness might be due to concerns China has raised about US defaulting on its treasuries. Or this could be somehow related to action in steel and banks.

     

    alas! it is only one day's action. Have to see next week, but perhaps next week will have the market strength, a spike counter rally.
    11 Jun 2011, 06:58 AM Reply Like
  • ex umbra
    , contributor
    Comments (19) | Send Message
     
    June 10 action:

     

    1. banks (BAC, C, GS, JPM, WFC) fared well.

     

    2. steel (AKS, NUE, X) fared well (CWRN iron ore looks possible bottom)--major infrastructure development to be announced??

     

    3. TLT did not make new high despite weak DJIA and spiking SJB.

     

    4. $IRX did not go to zero despite weak DJIA.

     

    thus, "perhaps" strength that was forecast for the week concluding June 10, shall appear instead following week--to flush the shorts that have piled on using leverage. tbd.
    11 Jun 2011, 06:58 AM Reply Like
Full index of posts »
Latest Followers
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.