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## NONLINEARITY NOW: Global Equities and US Long Term Sovereign Debt 0 comments

:NONLINEARITY NOWGlobal Equities and US Long Term Sovereign Debtat one EXACTnonlinear break point:nonlinearity slowed by delta valuation trading limits that would occur otherwise in one hour of one day: October 1987 x 10The Economic Fractalist

19 October 06

A Final Posting

Saturation Macroeconomics and Saturation Curve Fractal Analysis- A Real Science?

Fast forward: August 2010:

The Wilshire: 70/152 years x/2- 2.5x

9/21 year x/2-2.5x

99/240 months x/2-2.5x (99 months 9 august 1982 to 11 October 1990)

47/97 months x/2-2.5x

14/35/28/23 months x/2.5x/2x/1.6x

19/47 week extended x/2.5x fractal by 8/20/21 days

Corrspondng to the 28/23 months of the 14/35/28/23 month fractal, a final lower high deteriorating maximum saturation growth fractal of:

35/89/89 weeks.

The Wilshire has proceeded to its maximum lower high growth limit at

x/2.5x/2.5x.

The Nikkei Futures completed an 8/20/20 day lower high maximum growth fractal.

The last saturation speculation money has flowed into equities as US long term debt futures began their 16/40/29-30 of 32-40 day blow off.

Observe the transpiring millennium 25-26/63-65 month second decay for Wilshire/Euro/NiKKEI equities and inverse decay fractal for US debt instruments (TNX and TYX).

2 year US debt instruments have already reached their 150 year lows; the 5 , 10, and 30 year US instruments will follow within days.

Expect predictable terminal second fractal synchronized great nonlinearity of Nonstochastic Saturation Macroeconomics Immediately ahead.

From: The Economic Fractalist

19 October 06

A Final Posting

Saturation Macroeconomics and Saturation Curve Fractal Analysis- A Real Science?

November 24 2006 - Day 398 of a 159/398/398 -

ideal X/2.5X/2.5X Maxium Growth Fractal.....

Perhaps GM points the way afterall; as GM goes, so goes ....

November 24, 2006 is day 58 of a 29/73/58 X/2.5X/2X GM Growth Fractal.

From AdamSmithhee:August 24, 2005

Brad and Angelina Love Triangle Shocker

Brad Pitt, former faithless husband of Jennifer Aniston, may be

getting a taste of his own medicine. It used to be that Brad, himself

a tireless campaigner for development, would cozy up with Angelina

during breaks on her tours of Africa. But now she's traveling around

the continent with a new boy-toy, Jeff Sachs. Not to be outdone, the

anti-Sachs Bill Easterly has been appearing on MTV wearing a cool

black t-shirt, perhaps hoping he'll get picked up by Jessica Simpson,

"GOP Babe of the Week" and noted aid skeptic. A surprising number of

development economists (i.e., more than zero) do turn out to be

stylish lotharios. Nonetheless, all the "Elvis of Economics" got to

travel with was a grizzled Irishman.

August 24, 2005 in People | Permalink

Comments

Limited

I am riding on a limited express, one of the crack trains

of the nation.

Hurtling across the prairie into blue haze and dark air

go fifteen all-steel coaches holding a thousand people.

(All the coaches shall be scrap and rust and all the men

and women laughing in the diners and sleepers shall

pass to ashes.)

I ask a man in the smoker where he is going and he

answers: "Omaha."

Kindly visit the Economic Fractalist economicfractalist .com/

Posted by: gary lammert | August 24, 2005 at 09:59 AM

The above comment probably deserves to be nixed as spam, but for those

who like their nutty theories dressed up in pseudo-scientific

gobbledygook, the linked site is almost as good as anything by Laffer:

"This site has been constructed because of the expected inevitability

of a major sudden phase transition to occur at the conclusion of a

grand 140 plus-year second fractal cycle starting in 1858. For the

masses this phase transition will occur both very unexpectedly and

very suddenly. Approaching the global macro economy from such a causal

and fractal Weltanschauung may help those considering further debt

obligation and those in position of formulating future interest rate

and monetary policy."

Posted by: Adamsmithee | August 24, 2005 at 11:53 AM

More nutty-theoried pseudo-scientific gobbledygook......

From The Economic Fractalist.. 25 August 2005 posting...

Saturation Curve Fractal Analysis - A Real Science?

In order to qualify as a true science, the subject entity must be

testable by scientific method and have underlying laws that operate in

the real physical environment. These laws must be repetitively

provable and have reasonable predictability for different

applications. Scientific testing in college biology, chemistry, and

physics laboratories usually results in

experimental values that roughly support the underlying mathematical

equations and theoretical constructs. If indeed complex economic

systems travel by the simple quantum laws that observational fractal

analysis suggests, a similar validity should be testable and provable,

retrospectively and prospectively, in the great laboratory of readily

obtainable asset valuation saturation curves.

Valuation fractals represent a composite integration of primarily six

elements in the complex economic system: cash and savings; total

private, corporation and governmental debt load; ongoing wages;

assets; lending

practices; and prevailing interest rates. Each of these six broad

parameters has its own complex internal dynamics and summation

characteristics. In a very mechanistic fashion, following simple

near-quantum and near-quantum

related Fibonacci numbers, valuation fractals 'grow' to buying

saturation levels and thereafter 'decay' to lower selling saturation

levels. The fundamental point to this new potential economic science

is that the daily, weekly, monthly, and yearly valuation fractals

represent the sum total integration of those six elements and their

complex interactive relationships. Pour into the economic vat: cash

for daily transactions, savings available for money to be borrowed at

given interest rates using

prevailing lending practices for both major purchases and minor credit

card purchases, balanced by on-going wages and debt servicing

obligations, balanced by relative valuation of assets and their

relative state of consumption, mix it up on a daily, weekly, etc.

basis - and - from the vat flows forth the daily, weekly, etc.

summation saturation curves dancing to a

rather precise near quantum fractal tune. While lower order time unit

fractals such as minutes and hours represent trading valuation

saturation points, intermediate fractals represent the larger picture

of on going velocity of money growth percolating through the system.

The higher order or 4-yearly, 17-18 yearly and 70 year fractals

represent both business cycle

and asset and debt saturation levels at the basic consumer level.

There are three sequential identified ideal growth fractals followed

by a decay fractal. The near quantum number time units for the three

cycles are x, 2-2.5x and 2x, respectively. A nonlinear devaluation

typically characterizes the second growth fractal somewhere between

the 2x and 2.5x

time period. The third growth fractal which ideally is 2x in length

can have an extension to 2.5x. This extension of the third growth

fractal has characterized both the current US equity and heavily

invested commodity areas, particularly oil and gold, for the entire

128 week duration of the March 2000 secondary growth period.

Just as the complex system is an integrative process, valuation

fractals which exactly represent them are likewise composite

integrations with nonlinear capacitor like decay devaluations.

Fractals incorporate the terminal portion of the preceding decay

fractal into the beginning of the

follow-on growth fractal. An elegant pristine example of this rolling

integration was the 40/100/100 day cycle exactly x/2.5x/2.5x that

resulted in the March 2005 top(((an errror of statement -the January 05

top))) for the DJIA. The first two fractals were 'declining' growth

fractals with a very characteristic nonlinear break at the end of the

second fractal in August 2004. That second fractal was likewise

elegant in its evolution in that it was composed of a 29/72 day x/2.5x

sub fractal sequence. The probability that these precise sequences are

random numerical sequential events approaches zero and elevates

fractal analysis, reciprocally, to a high probability real science

descriptive of the comple macro economy.

The subsequent growth fractals dating from August 2004 likewise have

followed the same very precise fractal growth evolution with a 52/130

(x/2.5x) day first and second fractal growth sequence with the typical

nonlinear drop between 2x and 2.5x of the second fractal. Anyone can

verify this pattern using any of the major US or European indices. The

third

fractal US equity sequence has been a 12/30-31/28 day sequence,

approaching the extended ideal form of x/2.5x/2.5x growth pattern. The

major European indices ,e.g., the FTSE, DAX, and CAC have a slightly

different mix of the

six aforementioned underlying elements and have extended their growth

- but are still confined within the 52/130/104 theoretical maximum and

the theoretical Fibonacci maximum of 52/130/(1.62 X 52 = 84-85)days.

These recurrent numerically ideal patterns since August 2004 once

again lend substantial credibility to the notion that the complex

macroeconomy operates according to some relatively precise laws of

fractal

design.

What are the rate limiting factors that result in growth saturation

points or asymptotes, decay selling saturation points or asymptotes,

and the general nature of fractal patterning? Each of the six

controlling parameters- assets, ongoing wages, lending practices,

prevailing interest rates, debt load, and cash and savings -

contribute to the saturation areas.

Some are more important than others in determining cycle lengths and

saturation points.

Assets have two important elements: relative valuations and saturation

ownership. If the valuation becomes too high or too overly consumed,

demand will decease. The timing for this decrease is exactly

represented by an asymptotic valuation saturation level or a single

high valuation point

followed by lower valuations. The valuation curves provide precise

'barometric' information on instantaneous demand relative to valuation

level and relative to the consumption level. Some assets such as gas

and oil must be purchased to maintain livelihood. As global

consumption for the this

finite resource increases, resulting price increases squeeze the null

saving US consumer, far too many living from paycheck to paycheck, to

the financial breakpoint. Unnecessarily expensive US healthcare, 25

percent of the value of which goes to third party insurers and the

non-value added bill

collection system, can be considered yet another consumable asset,

that, like 'uninsured equivalent' gasoline prices, is driving many to

insolvency.

Ongoing wages and just as important the jobs that support those wages

are perhaps the most important rate limiting factor in determining

valuation saturation points. In the US jobs sphere, high paying

manufacturing jobs with the exception of the housing industry have

been significantly

outsourced. As the housing bubble crests, overcapacity will become

evident and high paying home construction jobs will contract. A

considerable subset of jobs in America have questionable value-added

real economic worth and

will be lightened during consumer retrenchment. It is easy to image

using the 1930's as a template of a positive feedback contracting

system, whereby decreased ,e.g., construction jobs leads to decreased

consumer spending which

leads to further job contraction in other nonessential service areas

which leads to further spending contraction and so forth.

Lending practices and prevailing interesting rates, the latter a

Federal Reserve controlled parameter, work in synergy to foster money

creation and asset inflation. Fractional reserve lending practices

amplify the bank and money market savings used as a reserve base for

lending. Extremely low interest rates, i.e., a Fed fund rate of 1

percent coupled with a lending practice of LIBOR type loans, no money

down and interest only payments

creates the interesting situation in which the interest cost of money

is far below the real asset inflation rate. Not to borrow is to lose

money that would be made with the expected inflation. Conversely,

saving money under these interest rate and lending practice guidelines

results in loss of purchasing power. Credit card interest rates

reflect the needed higher

interest rates to overcome the default rate. The last year of higher

Fed Fund interest rates have resulted in both increased mortgage

payments and decreased bank profitability secondary to the contracting

spread of long term verses short term interest rates.

Ongoing debt load and the requirement to service that debt diminishes

cash available for asset consumption and investment. Percentage wise

the total debt load relative to wages and GDP has had relatively small

incremental

increases - a fact which has mistakenly reassured many linear thinking

economists. Debt load becomes very important and a primary factor in

the fractal decay process, where assets are liquated in an attempt to

pay down debt. Because debt is in a major way based on the value of

the asset, debt

load becomes relatively greater with ongoing declining asset values.

This process also represent a positive feedback system and is self

perpetuating. It results in a mechanistic devaluation and deflationary

process, lowering the value of nearly all non cash or non-cash

equivalent assets.

Cash is the money that is represented by greenbacks in circulation and

greenback equivalent readily convertible debt instruments such as

treasuries, notes, bonds, bank deposits, and money market funds. In

short cash represents the dollars in circulation and savings. The

savings rate,

which the Federal Reserve has bemoaned to be dangerously low and was

reported to be zero in July, reflects the competition of the the

various Investment areas. With interest rates below the real(which

includes housing) asset inflation rates, deposited money in saving

instruments loses its purchasing power value each week that it is

malinvested in the bank or

interest bearing cash equivalent instruments. Deposited money in

saving instruments has been generally a bad investment in the last few

years.

During the decay fractal process, this scenario will be reversed with

money from ongoing asset liquidation flowing into cash and cash

equivalents, whose purchase power value will increase relation to

asset devaluation.

These are the lumped six broad elements that are dynamically

interacting with each other to create the summation valuation points,

curves, and saturation asymptotes.

The evolving integrative fractalsthat appear to so well describe the real instantaneous state, the

trending state, the

saturation areas, and importantly predict with relative exactness the

expected nonlinearities of the complex macro economic system, have the

fundamental characteristics of a real science.

Gary Lammert economicfractalist .com/

Posted by: gary lammert | August 27, 2005 at 05:15 AM

Gary Lammert

This pages was last modified on 10/19/2006

The Saturation Peak dayFrom the currently available achives of the Huffington Post ....

Australian Dollar Hits 23-Year High Against US

Generational US Consumer Saturation Macroeconomics - 11 October 2007: the Top Valuation Day for the Wilshire ?; near the final weekly low for the US dollar?

Posted 10/10/2007 at 22:23:35

Watch for an opening day trading gap to the all time high for the Wilshire on 11 October with a closing at the low of the day. While the US dollar will likely be lower against other fiats and gold, it is near its multiweekly nadir.

posted 10/10/2007 at 22:23:35

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