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  • May 6 2010 Flash Crash and Matching Skeletalized Daily Equity and Bond Fractals 0 comments
    Aug 15, 2010 12:28 PM
    Matching Skeletalized Equities and Bond Daily Fractals

    The global macroeconomic system operates qualitatively and quantitatively in a nonlinear fashion. There are cycles of debt expansion, reciprocal money expansion, job expansion, produced goods and supply expansion, and expansion of asset valuations. All are interconnected. All are self-organizing. All have saturation limits. Nonlinearity in price valuation  occurs at saturated valuation  areas.

    Easily traded markers representing derivatives of  assets in the bond, commodity, and equity markets as a function of time are the exact instantaneous summation of all interacting elements in the macroeconomic system. The summation of all traded derivatives represent the macroeconomy's speculative money  supply which is directly related to a growing or contracting economy.

    While the hazard for bond owners is sovereign default as seen with the post war or revolution-related collapse of countries,  bonds and bond derivatives are the safer speculative investment and represent  the reciprocal  of the more speculative equities and commodities derivatives.  

    For the great masses and smaller entrepreneurs, residential and commercial building represents the predominant and  most valuable asset class and has the greatest associated debt against future wages. At macroeconomic debt and asset supply saturation areas, such as has occurred in Japan in 1990, in the West in 2007-2010, and is occurring  in China presently, money generally  flows into the safer investment vehicle, the bond market.

     Ironically as long term interest rates decline, the financial industry - chiefly responsible for the massive citizen debt, overproduction, and overvaluation of assets and first to be recapitalized in 2007 with taxpayer's future labor - has easy access and wherewithal to borrowing, can borrow at lower rates and can make money on money betting for or against the derivative markets with yet greater profit.

    The nonlinear saturation macroeconomy is exactly defined in the integrated quantum progression as a function of time of the valuation of its asset derivatives in the bond, equity, and commodity market.

    All of the macroeconomy's intergrated activity and growing or contracting money supply is exactly represented as a function of time in the minutely, daily, weekly, monthly, and yearly valuations which are self organized into quantum fractal progressions that follow elegantly simple mathematical rules.

    Over the last 12-14/27-29/29-31 days observe the daily valuation fractal progression of the US Wilshire and the US ten or thirty year bond market: TNX or TYX.

    The US Wilshire and the US bond market representing derivative markers for the world's largest and global macroeconomy's largest asset classes have  matching fractal progression.

     In 220 years of recorded US market activity, has this ever occurred before?

     Fractal skeletalization has occurred revealing the underlying quantum mathematical order of macroeconomic system described in The Economic Fractalist Main Page in 2005.

    The fractal skeletalization begins at the 'flash crash day' on 6 May 2010 which represents the 2-2.5x nonlinear second fractal ending of the Wilshire's  19 week first fractal base beginning on 6 March 2009.

    The  composite US bond and equity matching fractal skeletalization sits in a series  of US synchronized second fractals, the largest being a 70-71/152 year first and second fractal series beginning in 1787-1788.

    The global macroeconomy is an exact self organizing pristinely mathematical nonlinear system bounded by saturation areas of its component elements. The quadruple elements of the system that are synergistically creating the current saturated macroeconomic area from which nonlinearity will arise are: unpayable massive debt, overproduction of residential and commercial  real estate, persistent overvaluation of real estate, and declining composite wages to support the financial industry's  facilitated  citizen debt.

    Composite asset class second fractal saturated areas are followed by nonlinear deltas of asset class valuation.

    Observe the time function quantum fractal evolution of the composite equities, commodities and US debt's daily valuations and observe the new quantitative science of nonlinear saturation macroeconomics.
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