Skyscrapers Predict Real and Financial Markets

 

A Spurt of Gross High-Rises

Marks an Asset Bubble 

and Portends a Market Crash

A breakout of soaring skyscrapers can presage a crash of the stock market and a recession in the real economy. That is, a bubble in real estate by way of oversize buildings heralds the end of a boom and the onset of a bust. In this way, a rash of record-busting construction serves as a portent of doom during the long-lived cycles in the property market as well as the financial forum.

In the modern era, real estate and financial assets form the bulk of wealth for the population at large. For this and other reasons, the tangible and virtual markets are closely intertwined. In the larger scheme of things, the fortunes of both types of assets depend on the health of the economy at large. In that case, it makes sense for the real and financial markets to display a heap of correlation and even a glob of causality with each other.

In their own way, skyscrapers can serve as beacons for investment planning by spotlighting bouts of excess in the property sector as well as other domains such as the stock market. All too often, an upcast of buildings that set fresh records for height is a glaring sign of froth in the real economy and the financial system. For this reason, the sober investor should pay heed to high-rise projects that make little or no sense from a pragmatic stance. To wit, a spate of record-breaking buildings is a cue for the canny player to rejigger their portfolio and prepare for a blowout in the real and financial markets.


NOTE: The full report is a document in PDF form under the title of “Skyscrapers Predict Real and Financial Markets”. The briefing may be viewed or downloaded here.

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Forecasting Crashes of the Stock Market

 

Impact of Cycles versus Bubbles

at the

Dawn of the 21st Century

 

The stock market can crash whether or not a bubble exists. A showcase was the smashup of 2011 which popped up in tune with the long-range pattern of bombshells but otherwise without any good reason.

The pointless breakdown had one positive outcome. Given the confirmation of the running sequence of crackups, the schedule of flaps appeared to be on track in spite of the partial derailing linked to financial crisis of 2008.

For the wordly investor, the main event of 2011 was the blowup of the stock market in the U.S. and elsewhere, along with the bedlam in kindred fields such as commodities and currencies. As is often the case, the mayhem caused by the participants in the arena – be they part-time amateurs or full-time professionals – was for the most part a premature and avoidable ordeal for the entire community.

The teardown of the markets was prompted by the specter of a full-blown recession in the global economy within half a year or so. One reason for the jitters stemmed from the fitful progress of the industrial nations such as the United States, Britain and Japan. Another factor lay in the brouhaha over the debt crisis in Europe, along with widespread fears of a breakup of the euro along with the collapse of the regional economy.

For a number of years, the politicians in the developed world had been going out of their way to prop up the distortions in the marketplace that arose during the run-up to the financial crisis of 2008. Instead of prolonging the malady, the politicos ought to have left the economy alone to heal itself. Better yet, public policy could have helped to undo the damage done throughout the entire meshwork of production and distribution. Thanks to the counterproductive moves of the pols, however, the economy was doomed to struggle and flail for many years to come.

On a positive note, the crash of the stock market in 2011 showed up in sync with the long-running schedule of meltdowns. For this reason, the sequence of blowups appeared to be on track despite the partial derailing linked to financial crisis of 2008. As a consequence, the next crackup of the bourse could well occur around 2017 in line with the ongoing chain of flaps in the modern era.

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Note: This report is a revised and extended version of an article published last year titled Forecasting the Next Crash of the Stock Market. The new publication is available in a variety of formats ranging from HTML to PDF. A popular form lies in the EPUB standard favored by many devices including Apple products such as the iPad. A variant of EPUB is the MOBI version used by Amazon Kindle. Further details on the report are available by clicking the image to the right.

 

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Forecasting the Next Crash of the Stock Market

Timeline for the 2010s

For the wordly investor, the main event of 2011 so far has been the crash of the stock market in the U.S. and elsewhere, along with the bedlam in kindred fields such as commodities and currencies. As is often the case, the mayhem caused by the actors – be they part-time amateurs or full-time professionals – was for the most part a premature and avoidable ordeal for the entire community.

The smashup of the markets was prompted by the specter of a full-blown recession in the global economy in the near future. One reason for the jitters stemmed from the fitful progress of the industrial nations such as the United States, Britain and Japan. Another factor lay in the brouhaha over the debt crisis in Europe, along with widespread fears of a breakup of the euro plus the collapse of the regional economy.

For a number of years, the politicians in the developed world went out of their way to prop up the distortions in the marketplace that emerged during the run-up to the financial crisis of 2008. Instead of prolonging the malady, the politicos should have allowed the economy to heal itself. Better yet, public policy could have helped to undo the damage throughout the entire meshwork of production and distribution. Thanks to the counterproductive moves of the pols, however, the economy was doomed to struggle and flounder.

On a positive note, the crash of the stock market this year popped up in sync with the long-range schedule of meltdowns. As a result, the sequence of bombshells appears to be back on track despite the partial derailing linked to financial crisis of 2008. As things stand, the next crackup of the bourse is likely to occur around 2017 in line with the running sequence of flaps in the modern era.

Read more on Forecasting the Next Crash of the Stock Market.


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Wildcats of Finance

Turning a Wrecking Ball into a Productive Vehicle

for Investors and Other Stakeholders

Wildcat groups such as hedge funds have played a growing role in causing or hiking blowups in the capital markets as well as the banking system. A showcase was the crisis of 2008, which ended up crippling the financial complex along with the real economy. The bombshell obliterated trillions of dollars from each of the major stock markets of the world, destroyed millions of jobs in sizable countries, and nixed trillions of dollars through lost output in the global marketplace.

This guidebook exposes the reality behind the illusion of profits in the hedge fund game. In plain language, the primer explains knotty issues like the following.

• Why do the hedge funds destroy wealth?
• How can the operators enrich themselves by delivering worse results to their customers?
• Why does the true performance of the wildcats remain hidden from view of the investing public?
• How do the custodians slash returns and hoist risk for their clients as well as the financial community and the entire society?
• Why will the crash of 2008 and the global recession in its wake show up repeatedly, and cause greater devastation, unless proper safeguards are put in place beforehand?
• How can public officials protect the stability of the markets?
• How could the economic liability of hedge funds be turned into a social asset?
• How can shrewd investors grow rather than wreck their capital?

The main audience for the book consists of active investors and earnest policymakers. Other types of readers include concerned professionals in the financial community as well as thoughtful observers in all walks of life.

Given the carnage to the real economy caused by reckless schemes in the financial sector, the message of this guidebook is in fact relevant to every member of the society at large.

Read more on Wildcats of Finance.



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Armageddon in Real and Financial Markets - Regulation of Hedge Funds Driven by Speculation and Leverage

Hedge funds entered the public spotlight in 2008 for the dominant role they played in taking down the financial system and the real economy. The ensuing blowup was the greatest wipeout of wealth and the worst takedown of the global economy since the Second World War.

Until the financial crisis burst upon the scene, it was the stuff of sheer fiction to picture a single outfit or a small crew of actors that could tear apart the fabric of civilization as we know it. Yet the debacle of 2008, along with its aftershock, was the shot across the bow for a laid-back populace. On current trends, a calamity that lays waste to the trappings of modernity is not only possible but inevitable.

On the bright side, though, the outcrop of doomsday could be forestalled by a mere act of forethought along with the legislation to match. The fitting course of action would be plain, quick and wholesome.

On the other hand, the feat will be far from easy to pull off due to the mass of opposition from lobbyist groups. The sensible approach will require the courage of statesmen along with the backing of their constituents.

The recent crisis has shown that extreme levels of leverage can bring down the entire system of finance and economics. Thus far, the annihilation of wealth has amounted “merely” to trillions of dollars and millions of jobs in each of the major countries of the world.

Yet the carnage will not always remain so slight in the future. Whether the assailants happen to be hedge funds or other rabid players, it would make sense to defang the forces of armageddon before they have a chance to do some serious damage.

More on Armageddon in Real and Financial Markets - Regulation of Hedge Funds Driven by Speculation and Leverage.


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Hedge Fund Regulation: How to Avoid a Boondoggle

The central role of wildcat outfits in causing or aggravating blowups in the financial arena has led to widespread calls for hedge fund regulation. Amid the furor, policymakers have responded in their usual fashion by cooking up legislation intended to curb the excesses that led to the wipeouts.

However, past experience suggests that the heap of regulations will merely serve to throw a monkey wrench into the machinery of finance. In that case, the main impact of the legislation will be a mound of paperwork and bureaucracy which does little or nothing to prevent similar fiascos in the future.

If the stumpers are to be tackled head-on, a sweeping change is required in order to blunt the threat of hedge funds armed with weapons of mass carnage. The purpose of this article is to lay bare the real problems along with a cogent approach to eradicating the bogeys.

More on Hedge Fund Regulation: How to Avoid a Boondoggle.

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