Share on Google Plus Share on Twitter Share on Facebook 1 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 2 (3 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   1 comment

OpEdNews Op Eds

Quadruple Witching Hour - Chaos After the Market Crash?

By (about the author)     Permalink       (Page 1 of 3 pages)
Related Topic(s): ; ; ; ; ; ; ; ; ; ; (more...) ; ; , Add Tags  (less...) Add to My Group(s)

Must Read 1   News 1   Valuable 1  
View Ratings | Rate It

- Advertisement -
Chaos will necessarily follow: social and political turmoil, military adventures, racism and xenophobia... All the evils the world has already experienced after Black Thursday in 1929. The Deep Depression is not a fatality. Act before September 9th.

The Invisible Hand of Irrational Exuberance.


PRLog (Press Release)Jun 28, 2010 No one disagrees now: the global economy is in a fragile condition. We will soon discover that governments, central banks and supra national bodies will be powerless when faced with another slow down of economic activity or an outright market collapse.

We already have clear signs of economic slow down: increase in new jobless claims, decrease in consumption, durable goods orders and an eye popper stumble of new home sales.

Diagnostic and Prognostic:

Fiscal Policy:

Also called Keynesian stimulus has found its limit as people and financial markets become wary of further deficits and, more importantly, powerful vested interests oppose it.
- Advertisement -

Monetary Policy:

That also has reached its limit with short-term interest rates close to zero in every developed economy. Central banks will find it difficult to decrease it lower than what they call the zero lower limity. The so called 'quantitative easing', which have pumped trillions of liquidity that can't find their way into real investment. If they were we would witness some sort of inflation which we don't. It raises the question: What several trillion dollars more will do that 2 trillion dollars didn't do. Will people accept another round of these obviously unjust measures? The last non conventional monetary policy tool, devaluation of the currency, has also already been exhausted.

What can yhey do the Japanese couldn't during the last decade, which is now 17 years old, when faced with a milder local collapse of the economy?

How could we know how effective is the monetary policy? The Federal Reserve System decided on March 23, 2006, 9 month before Goldman Sachs decided to pull back from Mortgage Bond Securities market, to terminate the publication of the single most important measure of the effectiveness of its actions: the M3 measure of money supply or the quantity of liquidity it injects that gets transformed into long-term investments.

- Advertisement -

Long-term yields go down as they have since 1981. At some point they will be so low as not to reward the investor for interest-rate risk. Sooner or later he will prefer cash at 0% interest rate rather than any lon-term investment: it is the crash.

Long-term trend of the Yields of US Treasury Bonds:

Short-term trend of the Yields of US Treasury Bonds:

Next Page  1  |  2  |  3


Take action -- click here to contact your local newspaper or congress people:
Chaos After the Market Crash.

Click here to see the most recent messages sent to congressional reps and local newspapers

I have an engineer diploma from Ecole Centrale de Lyon (France) and a MBA from Boston University. Since 1986 till 1994 I have worked as a broker dealer on the French Domestic Fixed interest market. Since the spring of 1994 I have worked on the (more...)

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon

Go To Commenting

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Contact Author Contact Editor View Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Bonds Hammer Bernanke at Jackson Hole

The Yield Curve Twist Omen

2012 The Mayan Calendar Scam.

Twist n' Shout: It's a Trap!

Giving Tempo to the TWIST.

Timing of the Omen of a Financial Nemesis : FND - 8.


The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
1 people are discussing this page, with 1 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

The final hour of thestock markettrading sessionon... by Shalom Hamou on Sunday, Jun 27, 2010 at 9:20:44 AM