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Is A Thunderous Flock Of Black Swans Imminent, Or The "Price Stability" Redux
Update per commentary feedback: time to rebrand the Black Swan to The Black Loch Ness Monster.
For today's chart of the day we once again look to Bloomberg, which has compiled a fascinating dataset looking at the frequency of 4 sigma+ events in the S&P500 since 1951. The trend is unmistakable, as is that the cumulative total now looks glaringly like a swan itself (paging William Banzai). What is also glaringly obvious is that all those claiming central planning under a monetary authority leads to market stability need to have their head examined: what the central bankers of the world do is merely push back ever more disastrous events into the future. Sorry: physics can not be circumvented with a printer, and a crash deferred today, is double the crash that can not be deferred tomorrow. Yet for all their brain power, all those Hewlett Packard fans in the Marriner Eccles building still can not comprehend this one so simple fact.
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He certainly knew his way around that corndog at the Iowa State Fair.
If the chart went back to the Thirties, higher spikes than 2008 in four-sigma events would be visible.
The Fifties were a sleepy time in the markets.
House prices will not go up in my lifetime; here is just one more reason why...all has to do with massive Fraud at every level:
"One thing that's not declining with the housing bust is mortgage fraud, a new FBI report says.
The report found that fraud in 2010 was at about the same level as it was in 2009. As the number of purchases and mortgage originations fall, the type of fraud shifts: from lies on applications to buy a house to schemes involving mortgage modifications, foreclosure rescue and short sales."
http://realestate.msn.com/blogs/listed-loans.aspx?post=4b11a32b-7159-419...
My friend bought a house and is now being sued by the seller who claims the paperwork was not corect. he bought a $50,000 legal problem instead of a peaceful place to live.
GL!
"Many miles away
there's a shadow on the door
of a cottage on the shore
of a dark Scottish loch"
Tylers,
Could you please link your sources more often?
Thanks
Double post.
two days ago I sent an letter to the ny times, to Mr. Norris. (of course no answer from that rag) taalking about hft and leverage, and how central bankers my attempting to make the market stable introduce leverage, and destabilize the market. In fact the central bankers should actively act to down side surprise the market on a more regular basis to prevent the build up of leverage.
my letter:
margin and hft a lethal combination like I said. a major reason for the instability in markets is in fact the fact that central banks keep attempting to stabilize it. the system should either be allowed limited leverage in total (including margin on trading accounts), the market needs to have rather frequent small disruptions to prevent the build up of margin. Greenspans always making margin safe (LTCM) in fact is what caused the problems. because central bankers don't think this way we are fucked. of course increased margin also means profits for their masters (bankers, ceos. and socialized losses we taxpayers pay for.
instead of using the financial crisis to deleverage the system central bankers have acted as fast as they can to releverage, money went to the "financial economy" instead of the real economy, and also hence larger wealth disparity. It's part of the system and how it's gamed for the rich. it's also the central fault of Keynesian theory. I have no problem with stimulus of loose monetary policy, but lets change the structure so it goes where it should, and benefits all, instead of where it shouldn't and benefits the top 1%Our problems are caused by too much debt. The last time we had too much debt was the 30's depression. How did rare events then compare to now?
I like the dax and cac as lei..when t/hey took out ibm also that was a warning sig. The bkx hs been a red flag for 8 months.. the signs were there.
Once 10.5 k goes on the dow.. its waterfall time.