Obama has won the elections. According to socionomic theory, it was expected because the agggregate mood of the population as reflected by the stock market has been up for 4 years now. In the wake of the Presidential election, the Social Science Research Network (SSRN) reports that the study, "Social Mood, Market Performance and U.S. Presidential Elections" has earned the #3 spot among the most-downloaded papers in the past 12 months.
The SSRN eLibrary is one of the world's leading social science resources and includes 430,000 paper abstracts from 200,000 authors. It has delivered close to 56 million downloads, and last year it received over 66,000 new submissions. Among those submissions: the elections paper written by a team from the Socionomics Institute.
Authored by Robert R. Prechter, Jr., Deepak Goel, Wayne D. Parker and Matthew Lampert, the study amounted to a bold challenge to conventional wisdom about the factors that predict presidential re-election outcomes.
"We demonstrated a counter-intuitive point about what matters, what doesn't and why" Prechter said about a FREE VIDEO.
"GDP was a significant predictor in some of the simple models," said Deepak Goel, "but it was rendered insignificant when we combined it with the stock market in multiple regression analyses. Inflation and unemployment had no predictive value in any of our tests." So what does matter?
Historians and political scientists have long argued that gross domestic product (GDP), unemployment and inflation have great bearing on presidential elections. So Prechter et.al. tested those ideas. They studied every presidential re-election campaign dating back to George Washington's successful bid in 1792. And what they found was amazing.
The stock market. Specifically, they found that the stock market's performance for the three years prior to Election Day does predict elections. But an even bigger finding came when they examined the question of whether or not money made or lost in the market had any effect.
"We contrasted eras when stocks were widely owned vs. hardly owned, and there was no difference in results," Robert Prechter said.
They ruled out GDP, unemployment, inflation and money made or lost in the market as factors. That left only one. Matt Lampert explained:
"The best explanation is that the trend of social mood is important in driving the valuations of both stocks and presidents."
You can read more on social mood and it's effect on economy, politcs and culture at this Kondratieff Wave website and understand the mechanics of Inflation and Deflation in a credit based economy that is ruled by human emotions that shows predictable behavior at aggregate level.
Thursday, December 20, 2012
Saturday, October 27, 2012
OIL is Falling Despite the Printing Press
Despite today's less-than-stellar global economic environment, as
recently as April, crude was trading well over $100 a barrel. Then Bernanke said he would keep printing money indefinately until economy gets better (in other words until prices go up). Can the printing press really stop Kondratieff Winter? Can Bernanke's newly minted dollars warm us up to borrow and spend again?
After a 4-day losing streak, on October 23 crude oil futures fell as low as $85.69 a barrel -- the lowest price since July.
Predictably, the mainstream energy market observers have blamed the drop on "global economic worries." Of course, we have pointed out before how, on one recent occasion, oil fell in the face of positive economic expectations. And on another recent occasion, oil fell despite the absence of any real news, period. Fundamentals, news, events do not determine the prices in financial markets. It is something else: Social mood drives markets.
So, the mainstream analysts have to do better than "global economic worries" to explain the latest oil selloff...except that they can't.
See, in the world of "fundamental" analysis, markets always react to something. If it's not A, then it's B; and if not B, then it's C. "Action" outside the markets produces a "reaction" inside them. So it's simply inconceivable for a conventional analyst to suggest anything other than an outside factor -- the handy "global economic worries," in this case -- to pin the October 23 selloff on.
Fine...except, doesn't every day now bring some 'concern about global economic growth'?
Europe has been dealing with the debt crisis for several years now; China's economy has been cooling off; and right here in the U.S. -- well, every month it's been hit and miss with various economic indicators, from unemployment to manufacturing to consumer confidence.
One could argue that in this environment, oil prices should be half of what they are today. But they aren't. In fact, as recently as April, crude was trading well over $100 a barrel.
When it's all said and done, you have to accept the fact: To get serious about forecasting the future trend in crude, you have to consider something other than the proverbial "fundamentals." Elliott wave analysis provides a real alternative.
By studying price charts, wave analysis tracks and measures the changes in the market's collective psychology. After all, what moves market prices but the market participants? If you can forecast their bias, bullish or bearish, you can reasonably forecast the market. And right now can you see how EWI Founder and President Robert Prechter views the common argument over "peak oil" for free.
After a 4-day losing streak, on October 23 crude oil futures fell as low as $85.69 a barrel -- the lowest price since July.
Predictably, the mainstream energy market observers have blamed the drop on "global economic worries." Of course, we have pointed out before how, on one recent occasion, oil fell in the face of positive economic expectations. And on another recent occasion, oil fell despite the absence of any real news, period. Fundamentals, news, events do not determine the prices in financial markets. It is something else: Social mood drives markets.
So, the mainstream analysts have to do better than "global economic worries" to explain the latest oil selloff...except that they can't.
See, in the world of "fundamental" analysis, markets always react to something. If it's not A, then it's B; and if not B, then it's C. "Action" outside the markets produces a "reaction" inside them. So it's simply inconceivable for a conventional analyst to suggest anything other than an outside factor -- the handy "global economic worries," in this case -- to pin the October 23 selloff on.
Fine...except, doesn't every day now bring some 'concern about global economic growth'?
Europe has been dealing with the debt crisis for several years now; China's economy has been cooling off; and right here in the U.S. -- well, every month it's been hit and miss with various economic indicators, from unemployment to manufacturing to consumer confidence.
One could argue that in this environment, oil prices should be half of what they are today. But they aren't. In fact, as recently as April, crude was trading well over $100 a barrel.
When it's all said and done, you have to accept the fact: To get serious about forecasting the future trend in crude, you have to consider something other than the proverbial "fundamentals." Elliott wave analysis provides a real alternative.
By studying price charts, wave analysis tracks and measures the changes in the market's collective psychology. After all, what moves market prices but the market participants? If you can forecast their bias, bullish or bearish, you can reasonably forecast the market. And right now can you see how EWI Founder and President Robert Prechter views the common argument over "peak oil" for free.
 |
Free Oil Report from Robert Prechter In July 2008, when crude oil prices were at $148 a barrel and "peak oil" bulls were forecasting a rise to $200, even $300 a barrel, contrarian technical analyst Robert Prechter took the opposite stance: "One of the greatest commodity tops of all time is due very soon." Six months later, a barrel of oil cost just $32. Now, you can read Prechter's big-picture outlook on the oil markets in a newly released report. Follow this link to download Prechter's 26-page oil report now |
Saturday, February 18, 2012
US Dollar Big Picture
More credit is denominated in U.S. dollars than any other currency. What does this mean for the value of the dollar as the credit crisis continues its strangle-hold on the world economies?
Enjoy this video clip of Bob Prechter from an October interview with The Mind of Money host Douglass Lodmell, in which Bob discusses the debt implosion and the value of the U.S. dollar.
You can watch Prechter's full 45-minute interview here -- no sign up required!
Enjoy this video clip of Bob Prechter from an October interview with The Mind of Money host Douglass Lodmell, in which Bob discusses the debt implosion and the value of the U.S. dollar.
You can watch Prechter's full 45-minute interview here -- no sign up required!
Thursday, January 12, 2012
How will the stocks do in 2012?
A new year has started, and there are new high hopes for the stock market, as you can see in this December 21, 2011 headline from USA Today:
Strategists predict a glowing 2012
The article notes that a "quick survey of New Year's prognostications from investment strategists suggests stocks might deliver the double-digit gains that they have put up, on average, over the long term. A snapshot of 2012 year-end-price targets from five firms shows an average gain of 10.5% for stocks."
But, haven't we heard this before?
The 10.5% gains forecasted for the coming year is intriguing considering it is almost exactly the average gains that were forecasted for stocks in 2011. Take this Barron's cover story from December 2010 as a prime example:
OUTLOOK 2011: Our panel of savvy Wall Street strategists expects stocks to rise 10% next year, as an economic expansion takes hold.
But as you know, in 2011 we essentially had a flat market. The DJIA ended up 5.53% for the year, the S&P was flat...while the NASDAQ was down 1.80%. The broadest aggregate measure of stock market performance, the DJ Wilshire 5000, which includes nearly all stocks that trade, ended 2011 down 1%.
And the Dow's action masks a strongly negative stock market performance in the overseas markets.
So, how should you plan for 2012? What's really ahead for the markets, and what does it mean for your portfolio? Will the European credit crisis and U.S. debt debacle continue to loom over the markets or will the economic expansion actually take hold?
Elliott Wave International has just released a free report that will help you navigate the year ahead. You'll get all of the indicators that they have been analyzing over the past year, with 25 eye-opening charts and 14 pages of straightforward commentary to help you see where we've been and what's ahead.
Download your free report now: What will the stock market do in 2012?
Strategists predict a glowing 2012
The article notes that a "quick survey of New Year's prognostications from investment strategists suggests stocks might deliver the double-digit gains that they have put up, on average, over the long term. A snapshot of 2012 year-end-price targets from five firms shows an average gain of 10.5% for stocks."
But, haven't we heard this before?
The 10.5% gains forecasted for the coming year is intriguing considering it is almost exactly the average gains that were forecasted for stocks in 2011. Take this Barron's cover story from December 2010 as a prime example:
OUTLOOK 2011: Our panel of savvy Wall Street strategists expects stocks to rise 10% next year, as an economic expansion takes hold.
But as you know, in 2011 we essentially had a flat market. The DJIA ended up 5.53% for the year, the S&P was flat...while the NASDAQ was down 1.80%. The broadest aggregate measure of stock market performance, the DJ Wilshire 5000, which includes nearly all stocks that trade, ended 2011 down 1%.
And the Dow's action masks a strongly negative stock market performance in the overseas markets.
So, how should you plan for 2012? What's really ahead for the markets, and what does it mean for your portfolio? Will the European credit crisis and U.S. debt debacle continue to loom over the markets or will the economic expansion actually take hold?
Elliott Wave International has just released a free report that will help you navigate the year ahead. You'll get all of the indicators that they have been analyzing over the past year, with 25 eye-opening charts and 14 pages of straightforward commentary to help you see where we've been and what's ahead.
Download your free report now: What will the stock market do in 2012?
Saturday, November 12, 2011
Weakest Borrowers Will Go Bankrupt
Greece is having trouble again and it seems Italy is about to join the party. Greece economy is small enough that it can be saved. But can the same be said for Italy? Why are these countries having trouble? Why are home owners having trouble paying their mortage? Let me explain.
In an interest based economy with fractional reserve banking, weakest borrowers will go bankrupt when deflation hits! Why?
Banks create money when we borrow. Google for "How do banks create money" to understand how it happens if you don't know. Entire money supply is debt. It is the principal we borrowed. But banks demand that it is paid with interest. It is not possible for every borrower to be employed at levels that enables them to earn principal + interest. Because the interest portion is not created yet. It is only created with more borrowing. The inflation created by money creation of banks punishes savers and forces more people to borrow. New money is used to pay old debt. When we run out of borrowers, it crashes. Here is how deflationary crash happens:
http://www.kondratieffwavecycle.com/economy/deflationary-crash/
New money that is created in a society should belong to the society. It should not belong to private bankers. Thus, if any interest is to be paid, it should be paid to the people, not to the private bankers. A solution is to require 100% fractional reserve. Let treasury print principal + interest when a loan is made. Principal is loaned out to the borrower. Interest portion is spent in place of taxes. principal + interest is available to earn. When interest is paid back, destroy it. Web of Debt by Ellen Brown explains it well.
http://www.kondratieffwavecycle.com/web-of-debt/
Current system requires perpetual debt since existing debt cannot be paid without further borrowing. Banks can at will withold loans and create a depression. Then they will make loans to their friends and withold loans from competitors. When competitors who cannot access loans go bankrupt, they are bought by the friends pennies on the dollar. This way the banking cartel gains control of the media and other industries. This is a ponzi scheme but when it goes bust, they get bailed out.
Last but not least, if banks did not create money out of nothing when they made loans, then home prices would be lower and savers would afford them cash down. This is because when 30% of the population works in financial services, the other 70% has to work harder to feed the 30%. If financial services is reduced to 1% just like farming, then they will be employed at more productive tasks (building homes?) and the burden on the 70% will be reduced.
In an interest based economy with fractional reserve banking, weakest borrowers will go bankrupt when deflation hits! Why?
Banks create money when we borrow. Google for "How do banks create money" to understand how it happens if you don't know. Entire money supply is debt. It is the principal we borrowed. But banks demand that it is paid with interest. It is not possible for every borrower to be employed at levels that enables them to earn principal + interest. Because the interest portion is not created yet. It is only created with more borrowing. The inflation created by money creation of banks punishes savers and forces more people to borrow. New money is used to pay old debt. When we run out of borrowers, it crashes. Here is how deflationary crash happens:
http://www.kondratieffwavecycle.com/economy/deflationary-crash/
New money that is created in a society should belong to the society. It should not belong to private bankers. Thus, if any interest is to be paid, it should be paid to the people, not to the private bankers. A solution is to require 100% fractional reserve. Let treasury print principal + interest when a loan is made. Principal is loaned out to the borrower. Interest portion is spent in place of taxes. principal + interest is available to earn. When interest is paid back, destroy it. Web of Debt by Ellen Brown explains it well.
http://www.kondratieffwavecycle.com/web-of-debt/
Current system requires perpetual debt since existing debt cannot be paid without further borrowing. Banks can at will withold loans and create a depression. Then they will make loans to their friends and withold loans from competitors. When competitors who cannot access loans go bankrupt, they are bought by the friends pennies on the dollar. This way the banking cartel gains control of the media and other industries. This is a ponzi scheme but when it goes bust, they get bailed out.
Last but not least, if banks did not create money out of nothing when they made loans, then home prices would be lower and savers would afford them cash down. This is because when 30% of the population works in financial services, the other 70% has to work harder to feed the 30%. If financial services is reduced to 1% just like farming, then they will be employed at more productive tasks (building homes?) and the burden on the 70% will be reduced.
Friday, August 12, 2011
Roubini Warns About Global Recession
Economist Nouriel Roubini says the risk of a global recession is greater than 50 percent, and the next two to three months will reveal the economy's direction. In an interview with WSJ's Simon Constable, Roubini also says he's putting his money in cash. "This is not the time to be in risky assets," he says.
Wednesday, August 10, 2011
How to Short the Stocks
Stocks have been falling sharp and the talk of recession has started again. Normally, the stock market goes down first and recession is declared later. Similarly, on the way up, stocks move up first and recession ends later. So what does this mean? It means if you are going to buy stocks, you need to buy when the hour is darkest. Similarly, you need to short the stocks when it's all sunny and seemingly good.
If you are watching the market timing services, some of them already went short more than a month ago. Rode the 1st Elliott Wave down and now closing shorts.
I think this is a good level to cover. Yesterday we have touched 38.2% fibonacci retracement level which is the first technical support. As the media beats the drums about upcoming recession, market should rally punishing late short entries now. A 3 waves up will bring back the optimism and should suck in wanna be longs just before the major leg down.
I think stocks are a bubble and nothing has been fixed. Last 3 years we have enjoyed spending the borrowed money at Uncle Sam's expense. But it won't last forever. I suspect this leg down will be worse than the 2008 market crash. So I will either try to short it or stay in cash. I suspect Gold bugs will get caught in a deflationary crash as well.
Debt is the problem and it is denominated in US dollars. Not Gold. People borrowed and they promised to pay back US dollars. When the s$%#!t hits the fan, it will be a race for US dollars. Borrowers will have to sell everything including Gold. If they don't, their creditors will!
If you are watching the market timing services, some of them already went short more than a month ago. Rode the 1st Elliott Wave down and now closing shorts.
I think this is a good level to cover. Yesterday we have touched 38.2% fibonacci retracement level which is the first technical support. As the media beats the drums about upcoming recession, market should rally punishing late short entries now. A 3 waves up will bring back the optimism and should suck in wanna be longs just before the major leg down.
I think stocks are a bubble and nothing has been fixed. Last 3 years we have enjoyed spending the borrowed money at Uncle Sam's expense. But it won't last forever. I suspect this leg down will be worse than the 2008 market crash. So I will either try to short it or stay in cash. I suspect Gold bugs will get caught in a deflationary crash as well.
Debt is the problem and it is denominated in US dollars. Not Gold. People borrowed and they promised to pay back US dollars. When the s$%#!t hits the fan, it will be a race for US dollars. Borrowers will have to sell everything including Gold. If they don't, their creditors will!
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