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The Anatomy Of A Pre-Crash Bubble
We previously highlighted Didier Sornette's excellent work trying to identify pre-crash conditions in financial markets and John Hussman's chart below suggests we are indeed heading that way. His warning, however, "Don't rely on further blow-off - but don't be shocked - risk dominates... Hold Tight."
Via @Hussmanjp
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200 more spooz points. Before Brooklyn. http://hedge.ly/16DAaWW
oops i clicked on this story cuz i thought it was on BTC .....!!
"Global Financial Architecture and Economic Systems on Verge of Collapse"http://stateofthenation2012.com/?p=2200
"Perhaps we should now take off our blinders and admit that while, yes, all of the indicators are there, as they have been for quite some time, for a truly catastrophic global economic meltdown and financial cataclysm, these events are still to a great extent controllable. All of us have seen bubble after bubble grow and balloon, and merge and overlap, and inextricably interpenetrate each other, until all we have is one massive bubble ready to pop. But, when will it pop?!
It will pop when the confidence level is sufficiently undermined by the very same MEDIAthat controls the flow of the relevant information."
After waiting for 5 long years, I am wading in to the stock market just now. Missed the 39% upswing. The bull market is just begining. King Kong Yellen has not started her tenure yet.
Be careful in that casino, take in only what you can afford to LOSE! You missed 4-5 years of gains, still think that there are that much more to gain? Considering the economic and fiscal climate?
You have now been played, just like all the other moms and pops, who are going to lose everything when the house crashes!
Crash it will, just a matter of when...I say sooner than later!
Yes, good idea, buy the f*cking all time high (BTATH) in stocks, picking up nickels in front of the steam roller shown on the chart.
Make sure that whatever you don't use to buy stocks, hold in FeRNs in a bailed-out money-center bank. And no matter what, don't ever convert any of your FeRNs into precious metals! After all, they're not real money, always in a bubble and you can't eat them, of course.
Unfotunately, we all know that TPTB can count on the increasingly impatient and juvenilized, ADD-afflicted, ultra-short-term-obsessed lemmings otherwise known as 'modern investors' to be giving up, or to have long ago given up, on precious metals in favor of the latest bubble du jour. Because everyone knows that when you fall off the Empire State building, it's nothing but party time until you pass the 2nd floor.
ZH perma bears, views on ..gold wrong, silver wrong, stocks wrong , bonds wrong, bitcoins wrong. The broken clock trading method.
While you're licking that spittle, take note: We were buying PM's back when gold was under $300 and silver was $4. Come back and sing us that song about your Harare stocks in six months.
Wait--what's this?: "lickspitler: God damn that BITCOIN thing, can it just roll over and collapse.Constantly reminding me of a possible shift."
Yawn Perma-bear !
Two yawns....poseur.
Dragon King > 'Black Swan'
Legit analysis > Mumbo jumbo
Don't think Taleb would be a huge fan of forecasting the crash to the exact date, but this beautiful picture comes to mind:
http://www.replicatedtypo.com/wp-content/uploads/2011/10/turkey.png
Taleb is a certifiable sophist clown compared to Didier.
?????
A link?
Anything ???
Note: Known Fskhead, typical know-nothing; ignore anything connected with vd in the future to save time scanning ZH.
that's the best you got? what do you need a link for? you still won't get it.
edit: fuck it, i'm feeling geynorouys this am:
http://arxiv.org/find/all/1/all:+sornette/0/1/0/all/0/1
This paper is particularly enlightening:
http://arxiv.org/pdf/1205.0635.pdf
good man RR! you actually bothered to read, unlike the regular ZH trolls...
here's another interesting bit from the article you cite:
"..because traders are rewarded more by correctly foreseeing the other traders’ forecasts than by correctly calculating the fundamental price Pf."
It's mathematic "proof" that all you have to do is outrun the other campers in order to escape being eaten by the bear.
It will not end. All major currencies are monetizing and attempting to devalue against all other currencies. Still there is no inflation because automation makes labor cheaper, creates unemployment and part time workers. This requires larger entitlement central planning. There is no end to this cycle. The .0001% will own everything.
"It will not end"
It will not end well
"It will not end"
Yeah, baby. Because trees do grow to the sky. A camel's back can bear an infinity of straws. That which is unsustainable will sustain forever.
And a handful of super-rich oligarchs will withstand 300 million totally pissed, hungry, penniless American rednecks with more guns and ammunition than most armies in history.
You can get people to believe pretty much anything these days.
Soooooo......all in leveraged til New Years?
Oh shit, the Finite-Time Singularity! Is that bad?
"Don't rely on further blow-off - but don't be shocked - risk dominates... Hold Tight."
http://www.eriktaheri.com/wp-content/uploads/2013/04/holdfast.jpg
You bet. But this is not the big one, the world's actually going to end 2050. It's in his book (Sornette).
http://www.mathclimate.org/sites/default/files/Sornette_ICMS2013.pdf
>> the world's actually going to end 2050
That would make me 95. I'm good with that. But it's not actually the world that will end, just the human end of it. That, imo, would be an improvement.
Don't short this pig; Yellen is coming in and she's got two teats worth of QE in her at the least.
the average sow has 12 teats, some have only 6-8, but a prime sow has up to 16 teats.
QE 16 on the way, soooooeeeeeee, oink oink
Too bad the teats in question are on a bore(boar)...
"Don't short this pig; Yellen is coming in and she's got two teats worth of QE in her at the least"
Don't short this pig; Yellen is coming in and she's got two teats worth of QE in her at the breast.
fixed.
Not quite fixed. It should read:
Don't short this pig; Yellen is coming in and she's got two teats' worth of QE in her at the breast.
teats' is a plural possesive in this sentence. The construction is identical to:
a dollar's worth of silver
or
a thousand dollars' worth of gold
If you're going to correct someone, at least be correct.
Go ugly early?
Andrew Ross Sorkin & Joe (Isuzu) Kernen ? Kernen is bored beyond requiem.
Ok, I'm over it.
I wish it was a bubble! We have a {.govgeodesic dome} with multiple explosions ready to ignite!
Credit is blown out.
Bond yields are steepening.
Liquidity is tightening. Look at repo rates everywhere?
Diversification and being overweighted to liquidity is your friend today.
respectfully 'Bobert', I'm a currency trader.
Bobert, Hmmmm I had some crawfish with a bobart. Once upon a time.
I can't wait to take that guy cam-loop fishing with me! He'll pass out at 9000 feet!
We've already started to see the cult stocks crack. Tesla, Yelp, Whole Foods, and a few others are down fairly significantly.
So get out January 13th.,,,got it.
Why, five days prior to expiry or something more significant?
I'm guessing he read "Jan-14" on the X-axis as "the 14th day of January", rather than "January 2014".
Get out January 13th? Uh-uh, much too late. November 13-14 is Grid-Ex II. A simulation of continental grid collapse in the U.S., Canada and Mexico. What an ideal time to have all power and communications collapse synchronously due to an "unexpected failure". All cells of resistance inoperative, no one knows anything about anything, everything just goes dark.
Hey, it's not like I'm trying to scare anyone or anything.
"give me a tulip mania or give me death." the dollar hasn't busted a move higher "in conjunction with" the equity blast off. nor has gold truly rolled over like it did in the 90's as "all available cash gets sucked into the Wall Street Vortex." not that I'm being picky of course...just saying. 1998 had a ferocious correction as I recall and volumes high on the upside not just the downtick. and Banks are leading the charge this time...something that hasn't happened since the 70's actually. if I were to pick two projects that stand out "credit wise" it would be the massive build out of the Texas Gulf Coast shipping and the same happening in Loiusiana as well. The second would be the propulsion systems the US Navy is trying out (which is one reason why Tesla may not be in a bubble at all I might add...although the systems are all General Electric designs. The US Navy always has an interest in battery tech.) At some point the world is going to have to come to grips with Fukushima and Southern Europe I might add. That is unless we really do get a blow off top here.
You can shift the endpoint by large amounts of time in either direction and the curve looks about the same. That is the problem with bubbles. You don't know what year the endpoint is in, let alone the month. And the greatest gains in bubbles are always made right before the end.
I've played around with these log-periodic series in Mathematica and what you say is correct. This series is actually a solution curve to a fairly simple DE. There is a very nice paper on this by Emile Jacobsen which also corrects some mistakes of Sornette. One of the issues in arriving at the best fit parameters is that you must use a genetic algorithm in the optimization process.
This process works well when you apply it to price data that displays this log-periodic behavior. I divised a simple method for obtaining the parameters, but, in general, if you see a price series that is clearly log-peridic, take it as a warning that a crash is on its way.
Incidently, the log-periodic idea is just the fact that you have a sinewave where each succeeding lobe has a smaller period and a smaller amplitude. Triangle formations also display this.
You can use this to buy the dips once you fit a curve. You can also fit this Sornette curves to post-bubble declines. In those cases, the periods and amplitudes increase with time.
Personally, I just cast my chicken bones and devine the signs.
The hyperneptuminium of the hippotomous quared by ramplitude auger-rectumitude qualcum navigates mitigates and/or posticulates a most propitious postularity!
No, sorry, you just don't get it.......
Its...The Sqaw on the Hippopotamus hide is equal to the sum of the Sqaws on the other two hides......got it?
Have you seen the asymptote on that mother function.
You are obviously a master of ananonymystical algebraic coconuttery, a veritable parangong of US 'american' monolization of the crypto-quasi-pseudo-intellectual means and upping with blobbing-uppityness.
most eloquent sophistry, my man
A paper that fit the gold price to a log periodic bubble equation back in 2010 did pretty well, but not exact.
http://historysquared.com/2011/04/19/log-periodic-oscillation-analysis-f...
They forecast the end of the bubble in April-June 2011 and the peak was actually in August.
Also, the experience of gold tells us that the aftermath of a bubble does not have to be a real crash. Gold dropped sharply from the peak and then has been in a sideways market ever since. Whether it is in a holding pattern for future declines or will have another bull market is unknown at this time. I know there are a lot of gold bulls here, but whether that view is right depends on how all the other big credit bubbles turn out, doesn't it?
Thanks for the reference...now back to my upblobbing coconutry.
"Upblobbing algebraic coconutry"
Please throat your mind in the proper citizenism fashion for to make highest clear the ideals of your US 'american' duplicitous parangong eternal nature.
If you take a look at their OMXs30 prediction, it's wildly off. If the bubble had been allowed to collapse normally they were predicting something like 200 on that index today. It's in the 1200 range just now. The bubble hasn't been allowed to collapse. It's been re-inflated and the index is now indicating an even longer, bigger and harder bubble instead.
Thanks.
It's Emilie Jacobsson, here's the link to the paper in case anyone else is interested:
How to predict crashes in financial markets with the Log-Periodic Power Law
US Treasuries... Thats the bubble to take a look at.
Bullish
this time is different...
I love it ... for the first time I see someone make a concrete, time stated prediction ... but 1,900 looks a little scary to The Bear
Welcome back stranger. is aud/usd going below 90 again?
The point I'm trying to make Bear! You're looking for someone to take a stand, and open the door for you to do what you do!
Am I wrong? Are you ready to settle down?
AUDUSD is 89 before 96. The trade is sell Aussie buy the Loonie ... In Melbourne last year the average Coke was 2.00 Aussies, in US/Canada 1.00. However, if Australia relaxes immigration policy all bets are off.
Am I ready to settle down? No ... I'll sell until the cows come home. Well, I will sell at 1758.75, 1658.75, 1558.75, 1458.75 and 1358.75 ... if I can, but not until then.
Thanks. Update your website!
http://bearmarkettrading.blogspot.com.au/
people care about you!
Different Bear ... same mind
So is the yen about to take off versus the dollar which would be bearish for US equities.
The real game for Uncle Sam Obam is the S&P 500. The will keep pumping it to distract the masses. Clinton did it and he was a lot less worse than this nightmare.
Yen cross, got badly humped by EURUSD whern i was short at 1.30, but have managed to go long dollar somehow in the past week through dollar index. Got so confused withtin the G7, i decided to go for the index.
Any thoughts on USD? My view is that it has bottomed for the year and confirmation comes above 84.25.. Apart from that sitting short AUDUSD and long USDINR..
These things never go to the last day. It looks good on paper but when the trading range get too cramped it breaks down. I'm still good with my EOW by EOY prediction.
Can anyone confirm the authenticity of that JPM letter to business account holders warning that withdrawals would be limited starting Nov. 17? It was posted in a ZH article a couple of weeks back.
It made me think about something happening around the US Thanksgiving long weekend? Maybe a market problem or staged failed bond offering. Then everyone is sitting around with their families concerned and Super Ben and Super Janet come flying in to the rescue. Maybe they can do it Sunday night right after family dinner. Or do it at center field at half time of the Cowboys game. Just hover the helicopter over the crowd and start dropping bills.
And what a wonderful way for everyone to "celebrate" the 100th anniversary of the Fed and how lucky we all are to have it. Oh yeah and that other assassination thingy. The guy who was issuing US silver backed securities.
If you prevent an exit then the bubble never bursts.
It does however stop growing as more will not join fearing it can never be removed.
Once a bubble stops growing it IS the end.
There are multiple copies of the letter when the story broke 10/17, and JPM Chase confirmed the policy (but disputes that it's a capital control, instead saying it's risk management for cash businesses.)
Other banks including my own have sent out similar letters with varied policies, the key seems to be sensitivities to outgoing wire transfers. Every notice I've seen points at those, but only for certain accounts.
I doubt the bank holiday will happen without an overt precursor crisis a few days beforehand.
Thanks. The international wire thing I can almost understand but the blanket cap on total transactions reeks of an ulterior motive.
Here's just an FYI passing info from a tag agent the other day as I renewed my DL. It started as a conversation about the fingerprint thingy & my stating "everyone's a criminal". He told me that he had 2 friends, one that worked for ATF the other for the state BI. NEITHER did what was in their job descriptions. BOTH did nothing but watch a computer monitor all day long viewing nothing but financial transactions.
This tells me just how fragile the economy is & how desperate the Stasi is.
Its the real deal.
ALL the other banks are following suit in their own ways.Some are allowing business wires but not
personal ones.I had to talk to 'someone' in head office(PNC) to send a wire recently.
Having lived in the UK when capital controls were in force, that 'someone' was on loan from
the Treasury, or working on their specific orders.I recognized it instantly.
Welcome to hotel Kalifornia.
I love gold
>> I love gold
Me too, it just ain't been lovin' me back for a long time.
There is a subtle difference this time. The capability to adjust distortions is much better with far superior communications so the bubble can be grown way bigger so think it has a while to run. The trick for any central bank however with these new abilities and a far bigger bubble is how exactly do you stop it bursting? That last part of the problem has never been solved in all the times previously the bubble "has" burst before.
How can one measure the insanity of the ULTIMATE PONZI????
See what's really going on -- with music and humour ("WORLD OF DEBT"):
https://www.youtube.com/watch?v=99xsqxzJnXs
Vomit
Oh yeah... check out KARL DENNINGER'S STOCK PICKS--MUST SEE!
https://www.youtube.com/watch?v=XqWIS0O2gIk
As it ever so often happens the market will crash ONLY AFTER EVERY SHORT has been destroyed. This is how the universe works. Probably happens near elections. JMHO.
at a top and bottom you see holding periods decline to almost nothing. Thats clearly what the chart is showing. The market hasnt sold off at all on major bad news with the govt shutdown,etc. This implies a big correction is on the way, a major collapse. //sitting in cash
My advice, young man, one word... tulips, buy tulips.
There is this brilliant guy that works for the French government, John Law is his name I believe, selling shares in a hot Louisiana land deal, get in now or forever be priced out.
There is this brilliant guy that works for the French government, John Law is his name I believe, selling shares in a hot Louisiana land deal, get in now or forever be priced out.
Ya its the blow off top - you can just feel the pressure building - maybe 1900 s&p yet this year?
No blow off and yep, S&P will end at a record high this year, and next year and maybe even the year after. When a young dog gets gun shy, it's not worth a damn, can't hunt. That's what a lot of investors are like, still haunted by the crashes. Gone from being bird hunters to bird watchers.
Long Term Capital Management Like Funds are Running the Asylum
http://winteractionables.com/?p=7169
Why China, Turkey and Thailand are not just buying Twitter, but Gold?
China, India, Turkey and Thailand Buying Record Amount of Gold - What Do They Know The Others Don't?
These two charts present the big picture in Gold Supply and Demand the best. When Central Banks are distorting the markets by suppressing the Gold price the increased Demand is overwhelming the diminishing Supply. The Game of Musical Chairs in Fractional Reserve Gold System continues, but it is very close to its logical conclusion with COMEX deliverable Gold being leveraged of 59 times at least.http://sufiy.blogspot.co.uk/2013/11/china-india-turkey-and-thailand-buying.html#
"Don't rely on further blow-off... Hold Tight."
"this time is different"
Foutaise!
If Citi is involved forget bubbles, its a crime scene. Thats their M.O.
According to BMO Capital Markets:
https://app.box.com/s/38q5x8x29vv25ujcg7ef
November 8, 2013
In Search of the Mythical Market Correction
Strong Market Performance Has Amplified Correction Chatter
Many clients we speak with are convinced that the market is on the verge of correction. Sure, the stocks have been on an impressive and almost uninterrupted run these past few months, but we believe performance patterns alone are not enough to justify directional market calls. Instead, investors should consider the macro and fundamental backdrop along with risk-taking levels to determine whether or not the performance is justified. From our perspective, the data simply do not support the correction talk and we remain committed to our optimistic market outlook through year-end and into 2014. As such, we believe those investors waiting to “buy on the dip” are likely to be disappointed.
Performance Patterns Have Followed the Script
Despite the fact that it has been over a year since the last major market pullback, recent performance patterns are not totally unprecedented. In fact, the current bull market has already produced as many 5%-10% and 10%+ pullbacks as the prior six bull markets dating back to 1970, on average. The main difference has been the duration between corrections, which has been roughly half the average since 1970 even with the latest correction free period. Therefore, the past year or so can be at least partially viewed as a reversion to the mean since more investors are beginning to accept this market for what we believe it is – the early to middle stages of a secular cycle that has at least five more years of life in it.
Macro Trends Contradict the Correction Talk…
The one thing that almost all market corrections during bull markets have in common is that they are usually triggered by a Fed rate hike or a spike in oil prices. In addition, high levels of confidence, expensive market valuation, and underperformance from Financials are also typically associated with bull market corrections. Fortunately, most of these conditions are nonexistent in the current environment making the probability of any sort of major market correction very low over the near term, in our view.
…As Does the Absence of Excessive Risk Taking
Excessive risk taking has been another common precursor to meaningful market pullbacks based on our experience. However, the risk measures we track suggest no indication of excessive risk-taking by investors.