Arrived in the Yucatán Peninsula, stage north to Tucson, Az...
John Pitera, the European Plunge Protection Team will be busy for awhile, after BNP Paribas, France’s largest bank, which said that ...the complete evaporation of liquidity in certain market segments of the U.S. securitization market has made it impossible to value certain assets fairly, regardless of their quality or credit rating... Keep watching the headlines and you’ll see story after story about sub-prime & hedge-fund flameouts. And if you keep a running tally on the loss totals as they’re announced, you’ll soon become very worried about the staggering dollar figures that are mounting on your little scratch pad... I’d expect a similar intervention here in the U.S. financial markets
In the 20s, the U.S. was a power on the rise & net exporters and a creditor nation. Our current status is the opposite on all three counts. The jobs that were created here at home from the industrial revolution are in significant part being created overseas during this tech revolution. Foreign demand for U.S. manufactured goods is concentrated with a relatively small number of capital good companies and commodities. The growth in jobs from the real estate boom has largely run its course and is beginning to contract, as is the wealth effect.
The U.S. is continuing to spend well beyond its means while the dollar is beginning to lose its status as the world's reserve currency. Euros are increasingly being used to trade in crude and our creditors are diversifying away from the dollar. An extended 5th wave in the U.S. seems hardly likely under these circumstances
The positives for the market is world wide liquidity, helping to fuel the private equity boom for the alternate counts for primary wave 5. Hot real estate money is coming back to the stock market and baby boomers are stepping up their retirement savings investments
However, these positive fundamental factors seem unlikely to overcome our deeper structural problems and support an extended 5th wave into late in the decade. The wild card is China and the emerging markets. In 1921, the U.S. & British markets registered important corrective lows. The U.S. market made an eight year hyperbolic run into the 1929 blow off while Britain only managed to reach its previous high of the 1900, as the industrials was being passed to the U.S. Similarly, as the U.S. passes the industrials to China, it is more likely that if any stock market extends hyperbolically into the 9th or 10th year of the decade, it will be China...
Good Read: Tyson Hummel, Major, USAF, Air Command and Staff College, Air University, Maxwell Air Force Base, Montgomery, Alabama...
Is the Science of Socionomics Able to Portend a Change in the United States’ Economic Might?
socionomics.org
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