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The Economic Fractalist

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  • The Macroeconomic Quantum Universe and McDonald's Valuation Fractals [View instapost]
    17 January 2010
    McDonald's: America's Premiere Domestic Industry; Revisited

    The next 6-12 weeks contains and represents the debt-defaulting nonlinear collapse period for America's 152 year second equity valuation fractal.

    From the above December 2009 posting. ....

    " Since its low in 2003 MCD is composed of a two subfractal series of 10/20/12 and 10/20/15 of 18 months. The second fractal series of 10/20/15 months is composed of 34//24/61/22-23//8-9/2... of 16-17/12 week fractal or a 34/84/61 of 80-81 week y/2/5y/2.5y decay fractal matching the weekly Wilshire decay pattern cited above."

    Currently McDonald's weekly Lammert Fractal Growth x/2.5x/2x cycle is:

    8-9/21/18 weeks :: x/2.5x/2x

    This series constitutes a second fractal of a 23 week base.

    There is a possibility of third fractal growth extension of this second fractal series to 8-9/21/18-21 weeks :: x/2.5x/2-2.5x.

    McDonald's 10/2012 monthly fractal starting in 2003 is followed by a 10//20//6/11 of 13-15 month or 10/20/18- 20 month (decay) fractal where first two subfractals of 10 and 20 months represented growth of the money supply with the second 20 month subfractal containing the Wilshire's nominal 11 October 2007 high and representing the peak of the 'investable' American money supply.

    The third decay subfractal of 18-20 months of the 10/20/18-20 month y/2y/2y (decay)fractal series is composed of a 23/45 of 46-47 week x/2x lateral growth first and second fractal series.

    The ideal expected end of this first and second interpolated fractal series is 23/56-58 weeks or x/2.5x and represents a low in about April 2010 concluding a 10/20/19-20 month decay fractal y/2y/2y or 34/84/78-80 weeks.

    The last 18 week third fractal of the 8-9/21/18 of 18-21 weekly fractal series is composed of a daily 20/42/23 of 23-40 days.
    The 42 day second fractal follows the 2-2.5x second fractal pattern proportionality of the 20 day first base. The nonlinear gapped drop between the 41st and 42nd day characterizes second fractals as defined in the main page of 'The Economic Fractalist.'

    So much of America's growth and entitlement promises over the last 30 years has been based on a disproportional growth of total debt without producing real basic economic elements e.g. factories and sell-able items to sustain economic growth and repay debt.

    The growth of America's GDP is a measure of its disproportional debt burden rather than the creation of a real economic engine to employ citizens and sell products to the world.

    The financial industry has been the recipient benefited party of this disproportional debt growth at the expense of building a real economic base. The bankruptcy prevention of the financial industry by the central bank and by America's current politicians in office represents total capitulation to a debt driven debt based economic system.
    Jan 17, 2010. 08:14 AM | Likes Like |Link to Comment
  • 1 January 2010: Quantum Saturation Macroeconomics [View instapost]

    The Great US Second Fractal Equity-Commodity Valuation Collapse

    The Great Macroeconomic Devolution is in the Near Future, Not the Recent Past

    This statement is obvious with the unsustainable entitlement liabilities created by the western political world. But what is informational is that a nonlinear collapse will occur even prior to the estimate s of the imminently respectable former CBO director and the likewise the sage observations of the very respectable TARP overseer.

    The East, The West :: Japan, the USA :: the Nikkei, the Wilshire :: 26/58 of 65 months

    The countervailing debt market: TNX 12/29/16 of 24 weeks and IRX 21/38 of 42-52 weeks.

    The Federal Reserve Financial Industry, can create wealth at will and from nothing. And yet, the real macroeconomic system ... and how that debt/asset valuation/jobs system really operates ... will be the dominant force. Financial firms who have been recapitalized by their counterpart principals in the central bank will own just about every thing in the west after the collapse as non-dollar equivalent asset valuations fall during the above second fractal time frame.

    For optimists, classic economists, and linear macroeconomic thinkers: expect the very unexpected.
    Jan 16, 2010. 05:45 PM | Likes Like |Link to Comment
  • 1 January 2010: Quantum Saturation Macroeconomics [View instapost]
    5 January 2010 (modified)

    4 January 2010 -Near the top of composite equities?

    The Wilshire is at 27/55/43 of 43-54.

    The growth sequence for the Wilshire's third 43 day growth is thus far composed of three caricatured Lammert fractal growth and decay sequences: X/2.5x/2-2.5x/1.5x
    Ist daily sequence: days 1-19 3/8/7/4 x/2.5x/2.5x/1.5x
    2nd daily sequence: days 19-34 3/7/6/3 x/2.5x/2x/x
    3rd daily sequence days 34-43 3/7/2 of 6 to 7 x/2.5x/2.5x

    The caricatured cycles can be better observed in FTSE. An underlying slope line for the FTSE contains each growth and decay sequence.

    It is possible that one more short growth cycle will occur taking the Wilshire and FTSE to a 27/55-56/54 day sequence or x/2-2.5x/2x. This terminal area would match a 34/84/68 week terminal area x/2.5x/2x and a 23/46 week terminal area.
    The Economic Fractalist

    The rise in the US 3 month Treasuries indicate the malinvestment that the central bank(s) is(are) causing as some 'investors' in US treasuries are finally giving up on the artificially extreme low rates caused by central bank ex nihilo buying of treasuries and (at the euphoric end run of the equity markets) are causing the last minutely gaps upward in the equity markets at the terminal saturation growth point.

    At the equity (and commodity) saturation areas a portion of the nominal 5 trillion dollar rise in Wilshire will repurchase some of the central bank's ex nihilo purchased bonds.
    Jan 5, 2010. 06:16 AM | Likes Like |Link to Comment
  • 1 January 2010: Quantum Saturation Macroeconomics [View instapost]
    5 January 2010

    4 January 2010 -the top of composite equities?

    The Wilshire is at 27/55/43 of 43-54. 43 days for the third growth fractal represents a Fibonacci proportionality with the 27 day base.

    The growth sequence for the Wilshire's third 43 day growth is composed of three caricatured Lammert fractal growth and decay sequences: X/2.5x/2-2.5x/1.5x
    Ist daily sequence: days 1-19 3/8/7/4 x/2.5x/2.5x/1.5x
    2nd daily sequence: days 19-34 3/7/6/3 x/2.5x/2x/x
    3rd daily sequence days 34-43 2/5/5 x/2.5x/2.5x

    The caricatured cycles can be better observed in FTSE. An underlying slope line for the FTSE contains each growth and decay sequence with 5 January completing the 2/5/5 day x/2.5x/2.5x extended growth fractal.

    It is possible that yet one more growth cycle will occur taking the Wilshire and FTSE to a 27/55-56/54 day sequence or x/2-2.5x/2x.
    The Economic Fractalist

    The rise in the US 3 month Treasuries indicate the malinvestment that the central bank(s) is(are) causing as some 'investors' in US treasuries are finally giving up on the artificially extreme low rates caused by central bank ex nihilo buying of treasuries and (at the euphoric end run of the equity markets) are causing the last minutely gaps upward in the equity markets at the terminal saturation growth point.

    At the equity (and commodity) saturation areas a portion of the nominal 5 trillion dollar rise in Wilshire will repurchase some of the central bank's ex nihilo purchased bonds.
    Jan 5, 2010. 05:50 AM | Likes Like |Link to Comment
  • Defining the Global 38-39 week Second Fractal Decay Sequence: [View instapost]
    Saturated: 3 December 2009

    The DAX, FTSE, and CAC show a reciprocal inverse fractal 3/7/7 day fractal with a gap higher at the opening of the 7th day of the third fractal on 3 December: this is a saturation apical pattern.
    Dec 3, 2009. 06:46 AM | Likes Like |Link to Comment
  • The Worst Case Scenario (Someone Has to Say It) [View article]
    The US savings rate has climbed to over 200 billion. Its not clear what units 'the savings' are in: stocks. US dollar denominated money markets, US sovereign debt.....

    Likely those with 'savings' are the wealthier who are getting wealthier....

    This 200 billion increased savings is balanced by 10 trillion dollars of asset valuation losses over the last 5 years and 9 trillion dollars of financial aide to needy financial institutions.

    At any rate there is a new macroeconomic hard science that has been defined from the debt dependent asset valuation curves.

    The mathematical patterns defining the growth and decay of asset valuation curves are as real and quantitative as any of the laws of physics, chemistry, and genetics...

    July 2005 Nonstochastic Saturation Macroeconomics - A New Science

    Blog of gary.lammert -A recap of debt dependent quantitative saturation nonstochastic macroeconomics

    The Economic Fractalist - An introduction Posted at 2005-07-01 13:54:52 by gary.lammert

    Welcome to the small alcove for the advancement of cause and effect saturation macroeconomics. This site pursues the hypothesis that the nature of market valuations and economic cycles is both causal and quantitatively decipherable. Valuations conform to fractal cyclical patterns that can be recognized, interpreted in conjunction with data emanating from the macroeconomic system, and used with short term and long-term predicative power. Information from this site is not intended to be construed as investment advice or as an investment tool. 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. The cyclical nature of the macroeconomic system operates by causality rather than chance. Valuations of assets are controlled chiefly by interest rates - the cost of money. Lowering nominal interest rates, below asset inflation controlling rates, leads to macro economical disequilibria with excessive money expansion through increased borrowing. This expansion engenders unbalanced forward consumption, consumer saturation, overproduction, and inflation of assets and consumer items. With the addition of ongoing wages of the consumer masses, these oppositional elements are countervailing, and periodic macroeconomic imbalances will self correct. Market overvaluation saturation and decay corrections to new lower saturation points occur in a fractal manner. Cyclical patterns can readily be identified on valuation charts denominated in minutely, hourly, daily, weekly, monthly, and yearly units. The transitional asymptote of overvaluation saturation curves are followed by decay curves which bring market valuations to lowered decay saturation levels where intelligent buyers reenter the market. Valuation fractal cycles of yearly and multi-yearly lengths are based on saturation at the consumer level. Human psychology is a decidedly lagging indicator and follows as an end effect of the mechanistic saturation and decay evolutions in the market. Market contrarians understand these turning points and anticipate the directional changes of the markets based both on market asymptotic overvaluation saturation areas or decay end-point saturation characteristics and counter intuitively by recognizing the lagging psychological parameters of extreme optimism or pessimism in reaction to the mechanistic respective high and low points. 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 followed by a decay sequence of 1.5-1.6X. 'X' represents the fractal unit of time denominated in minutes, hours, days, weeks, months, and years. The first two cycles include a saturation transitional point and decay process in the terminal portion of the cycles. The second cycle may be composed of two roughly equal time units or one confluent time unit. 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, which has import for the current 140 year grand fractal cycle, now in its 147th year. . 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. Feel free to visit The Economic Fractalist Website. G. Lammert


    Rome is burning.
    May 10, 2009. 12:49 PM | 1 Like Like |Link to Comment
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