In For It
A hedge fund manager friend emailed me an article from which the graphic at right comes from. It is a perfect metaphor for so many recent events — the market collapse, demise of the GOP, the end of the Bush era — that I had to throw it up here.
The article itself strikes me as part wit, part nonsense.
The wit is the Hunter S. Thompson analogy; the nonsense is the belief regarding the cycles of history and the markets based on the formula for the circumference of a circle as a reliably investable thesis:
“[stock perfromance] was based, he said, on the formula for the circumference of a circle—the idea that 2πr might apply to the financial cycle—and, in combination with various Fibonacci fractal techniques, it had made him a lot of money. You could slice up history into what he called pi cycles, each lasting exactly three thousand one hundred and forty-one days, or 8.6 years. You could subdivide these, by the hours on a clock, say, or the signs of the zodiac, and detect mini-cycles of 8.6 months. He rattled off a series of inflectionary dates and occurrences: the Nikkei high, in late 1989; the ruble collapse, in mid-1998; the historically tight credit spreads in early 2007. By God, he was onto something.
Sure he is. I suggest the writer mortgage his home and immediately invest all of his money with this circle thesis manager, saving only enough to purchase a barrel at right.
That’s probably why this graphic made me smile.
Enjoy your evenings . . .
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Source:
In For It
Nick Paumgarten
The New Yorker, November 17, 2008
http://www.newyorker.com/talk/2008/11/17/081117ta_talk_paumgarten
November 11th, 2008 at 8:09 pm
similar to Martin Armstrong’s theory, who’s in jail now, but here is a link…
http://www.nowandfutures.com/buscycle.htm
One of his dates was Feb 27, 2007, and the market tanked about 400 that day, which led to a lot of people looking at his data again. Google him, and you can find more.
November 11th, 2008 at 8:26 pm
I only read it for the cartoons
November 11th, 2008 at 8:49 pm
I put some jelly on a biscuit and threw it at my wall street journal. The splatter resembles an upside tea cup or possibly a baseball cap. Buy buy buy!
November 11th, 2008 at 8:59 pm
Interesting link on the Martin Armstrong article….
Actually, Nicolei Kondratieff came up with the long cycle 50-60 year theory a long, long, long time ago. The “K” wave is alive and kicking today. There are some who believe we finished a Kondratieff Wave in 1998 and thus began another K wave…. The first several years of a Kondratieff Wave is pretty strong inflationary pressure coming after a ~20 year wave of commodity deflation (1998). This first wave of inflationary pressures and rapidly rising asset prices causes a “shock to the system” and a Depression (sound familiar?). The next wave, after the Depression, will bring about hyperinflation for 15-20 years. I think this next hyper-inflationary wave will begin in 2010.
Update on some short term technicals….the short term (next few days) has gotten fuzzy to me with today’s price action…I’m flat at this point….It sort of looks like a coin flip after today…we could rally 50pts or fall 50 pts on SP500, so I’m just going to sit it out until I get more price action. The fuzziness comes from the fact that I’m still not sure we even finished the fourth wave that began on 10/10. I noted this before…that we may be in the middle of some kind of ABCDE pattern. I thought there was a good chance we finished an ABC at 1007, but with today’s action I’m not so sure. When I know more, I’ll write something.
Regards,
- AT
November 11th, 2008 at 9:10 pm
Sir inflation is dead and will continue to be dead into prices can come back to wages. Or somebody making 8$ a hour can afford overpriced assets.
The Kwave didn’t crest in 1998, it JUST CRESTED.
November 11th, 2008 at 10:50 pm
Itiswhatitis:
They call it the “cruelest tax” for a reason. The poor people have little to say about inflation….otherwise we would never have inflation!
- AT
November 12th, 2008 at 12:33 am
Andy Tabbo @ 8:59
“The next wave, after the Depression, will bring about hyperinflation for 15-20 years. I think this next hyper-inflationary wave will begin in 2010”.
You and Jim Rogers may not be so far apart on this.
But 20 year hyperinflation? I’m not quite that pessimistic.
November 12th, 2008 at 6:58 am
In for it…yes, I am not sure if inflation follows what we have here or not…but I am sure we will pay much more in taxes and so is Barron’s…(unless we want to default)..
http://online.barrons.com/article/SB122633310980913759.html
Uncle Sam’s Credit Line Running Out?
November 12th, 2008 at 7:00 am
Good Morning Barry,
Can you pls shorten each entry? or have a link to “more” in each? That way we can see more posts per page. Which will encourage more comments.
Thanks for your great work!
November 12th, 2008 at 7:17 am
One other thing on the “In for it” thread…now it seems that economists have all come to the same place Mother Roubini did long ago…a 3% contraction this quarter followed by another 1.5% for the first quarter of 09….
Be careful with those longterm toes….
http://www.bloomberg.com/apps/news?pid=20601103&sid=aCIytV1_Ii7M&refer=us
U.S. Slump May Be Longest in Decades as Growth Fell Off `Cliff’
November 12th, 2008 at 9:18 am
Barry – You had to start something didnt you?
November 12th, 2008 at 11:25 am
Fortunately, the U.S. economy is so diverse it will save us, and besides, our exports will save us, and emerging markets will decouple, and China, China, China and BRIC, too, and tax cuts, don’t forget tax cuts….