Thursday, July 30, 2009

A Great Socionomic Headline

How's this for a screaming headline straight from socionomic theory?

Drawing Up the Drawbridges
Europe Falls Out of Love with Labor Migration
...The mood has now shifted to one of overt xenophobia in Italy, which, like Spain, only became a country of immigration in the last decade. Illegal immigrants cannot be "handled with kid gloves," Interior Minister Roberto Maroni said, and the government of Prime Minister Silvio Berlusconi promptly unveiled a new security law. It calls for a fee for residency permits and proof of a minimum level of income. Under the law, the homeless will be fingerprinted, doctors will be required to report patients without papers and citizens' patrols are to be authorized to pick up illegal immigrants. Anyone working in the country illegally will be deported, and those who refuse to leave can be sent to prison for up to four years...

Emphasis mine. And this is just one paragraph of a long story describing how social mood is propelling Europe - normally associated with open immigration policies - into a new era of restrictions and hard policing of a once winked-at practice.

Tuesday, July 28, 2009

The Dark Years

Thanks to Zero Hedge for pointing out this recent missive from Matterhorn Asset Management:

The Dark Years Are Here -

And speaking of collapse, I like Dr. Sornette's name for the major decline events. Wave Principle calls them Third Waves of high degree. Dr. Sornette calls them Dragon Kings (as opposed to mere Black Swans):

Dragon-Kings, Black Swans and the Prediction of Crises
by Didier Sornette, International Journal of Terraspace Science and Engineering
We develop the concept of “dragon-kings” corresponding to meaningful outliers, which are found to coexist with power laws in the distributions of event sizes under a broad range of conditions in a large variety of systems. These dragon-kings reveal the existence of mechanisms of self-organization that are not apparent otherwise from the distribution of their smaller siblings. We present a generic phase diagram to explain the generation of dragon-kings and document their presence in six different examples (distribution of city sizes, distribution of acoustic emissions associated with material failure, distribution of velocity increments in hydrodynamic turbulence, distribution of financial drawdowns, distribution of the energies of epileptic seizures in humans and in model animals, distribution of the earthquake energies). We emphasize the importance of understanding dragon-kings as being often associated with a neighborhood of what can be called equivalently a phase transition, a bifurcation, a catastrophe (in the sense of René Thom), or a tipping point. The presence of a phase transition is crucial to learn how to diagnose in advance the symptoms associated with a coming dragon-king. Several examples of predictions using the derived log-periodic power law method are discussed, including material failure predictions and the forecasts of the end of financial bubbles.

I realize that Dr. Sornette has played fast and loose with some Wave Principle basics and called them his own, but the man does have a mind for this stuff.

Sorry for the lack of original posts lately - I have several cooking in the pot, but the day job is keeping me hopping. Nothing new on the immediate action front - keep a positive frame of mind (not delusional a la' CNBC, Fox Bidness Newz, et al), enjoy each moment as best you can and prepare for the worst - it is coming.

Monday, July 27, 2009

The Cliff

Think about this chart for a few moments. If we are lucky we are in the early days of a Grand Supercycle Wave IV - assuming that the last few hundred years was part of Grand Supercycle III. Let's hope and assume that because the correction we are facing will take this chart down below a 1000.

We talk a lot about news and current events, but just take a few minutes to think about what the world would look like at DJIA 500. The devastation will be vast. Yes, that will be the time to spring into action and build up from the ashes, but just think about all the triumphs and emotional energy invested in that long upswing (I just show from 1981 on - Excel choked when I tried to chart the data from 1928 to today). Think about all the emotional programming, the cultural hardwiring that was informed by this great bull market. And think about what will happen when it all gets torn down...

Thursday, July 23, 2009

Money, Demand and the Collapse

Here's an interesting perspective on the Great Collapse and how the crony-capitalist financial economy can grow to distort the feedback mechanisms that make free-market capitalism efficient.

The description of how financial goods trade with positive feedback loops is pure Prechter and Parker.

The Anti-Ecology of Money
John Michael Greer, The Archdruid Report
...The differences between a tertiary good and a primary [FJ: as defined by E.F. Schumacher - a good provided by natural processes] or secondary one [FJ: produced by human labor and capital inputs] reach further than this. Tangible goods produced by natural cycles or human labor are available in amounts limited by the supply. If there’s only so much water in a river, for example, that’s how much water there is; the fact that people want more, if such is the case, does not produce any more water than the hydrologic cycle is already willing to provide. Equally, if a country’s labor force, capital plant, and resource base are fully engaged in making a certain quantity of secondary goods, producing more requires a good deal more than an agreement to do so; the country must increase its labor pool, its capital plant, its access to resources, or some combination of these, in order to increase the supply of goods.

Yet tertiary goods are available in amounts limited only by the demand. How many bonds can a corporation print? For all practical purposes, as many as people are willing to buy. A good number of the colorful bankruptcies that have enlivened the business pages in recent months, for example, took out firms that mistook a temporary bubble for permanent prosperity, issued bonds far beyond their ability to pay, and crashed and burned when all that debt started to come due. On an even more gargantuan scale, the United States government is currently trying to restart its economy by spending money it doesn’t have, selling bonds to cover the difference, and amassing debt on a scale that makes the most extravagant Third World kleptocracies look like a bunch of pikers. It’s hard to imagine any way in which the results of this absurd extravagance will be anything but ugly, and yet buyers around the world are still snapping up US treasury bonds as though there’s a scintilla of hope they will see their money again...

...It’s when we get to the tertiary economy of financial goods that things change, because the feedback loops governing tertiary goods are not negative but positive. Imagine a thermostat designed by a sadist. In the summer, whenever the temperature goes up above a certain level, the sadothermostat makes the heat come on and the house gets even hotter; in the winter, when the temperature goes below another threshold, the temperature shuts off and the house gets so cold the pipes freeze...

Worth the read. Plenty of food for thought.

Wednesday, July 22, 2009

There's Something Happenin' Here...

How's this for a manifestation of negative mood: A three-day Urban Escape and Evade course, replete with getting yourself out of handcuffs and evading 12 professionally trained trackers in a 25-square-block area.

People are feeling the mood swing. Gardening is up. Tension is high. People smell something in the air. Some are preparing...

P.S. Note the way to defeat zip ties in the video. Might come in handy for those of you contemplating civil disobedience in the near future.

h/t Matt Savinar over at Life After the Oil Crash

Woo-Woo Wednesday

I've added a little woo-woo to the blog. There is a now GCP Real-Time Dot over on the right-hand side. It is part of the Global Consciousness Project (GCP). The GCP attempts to track what they think are the effects of consciousness on material systems and see if they correlate to real-world happenings.

From the GCP Website
The Global Consciousness Project collects random numbers from around the world. These numbers are available on the GCP website. This website downloads those numbers once a minute and performs sophisticated analysis on these random numbers to see how coherent they are. That is, how probable it is that the numbers are generated as they are. The theory is that the Global Consciousness of all the people of the world affect these random numbers...

Maybe they aren't quite as random as we thought. The probability time window is one hour. For more information on the algorithm you can read about it on the GCP Basic Science

Who knows, maybe this is the thin leading wedge of a future scientific discipline, like the frittering around with electricity in the late 1700s.
Or maybe nothing more than a curiousity. Either way, something worth checking in on occasionally.

h/t George Ure

Monday, July 20, 2009

40 Years On

Very busy with the day job this week, but here is a clip for you. Talk about an important emotional hook for an entire country (and Cycle Wave 3 if you are into such things) - this certainly qualifies.

Friday, July 17, 2009

A Tool for the Coming Backlash

Man oh man, when this Suckers' Rally collapses and the political recrminations begin, I expect the tools available to the show trial coordinators and the conspiracy theorists will blossom into a full-spectrum field of video and analytical juiciness as the formerly rich and powerful are linked together in their "crimes against the People" or whatever jargon will be used to dress up the anger that will be expressed by a world population needing scapegoats.

Here is a Muckety Map of the "influence" of Godman Sachs - a fantastic example that I expect will only grow in its ability to tie together people, businesses and influence:

Video Goodness


The Daily Show With Jon StewartMon - Thurs 11p / 10c
Lenny Dykstra's Financial Career
Daily Show
Full Episodes
Political HumorJoke of the Day

h/t Calculated Risk

Thursday, July 16, 2009

For You Future Leaders

We've talked about the "Chump Phase" of the coming Great Collapse - that nebulous period of time where the old ways we all grew up with no longer produce productive results, but the legal and social constraints on action hobble any attempts at radical new ways of reworking productive and social life.

For those of you with thoughts of future leadership, or who enjoyed reading Luttwak's "Coup d'Etat: A Practical Handbook" a new paper is out that can maybe provide you with a leg up for when the big political shakeups begin rolling across the continent:

Effective Leadership in Competition
Hai-Tao Zhang, et al in Physics and Society
Among natural biological flocks/swarms or even mass social activities, when the collective behaviors of the followers has been dominated by the moving direction or opinion of one leader group, it seems very difficult for later-coming leaders to reverse the orientation of the mass followers, especially when they are in quantitative minority. This Letter reports a counter-intuitive phenomenon, Following the Later-coming Minority, provided that the late-comers obey a favorable distribution pattern which enables them to spread their influence to as many followers as possible in a given time and to accumulate enough power to govern these followers. We introduce a discriminant index to quantify the whole group's orientation under competing leadership, which helps to design an economic way for the minority later-coming leaders to defeat the dominating majority leaders solely by optimizing their distribution pattern. Our investigation provides new insights into the effective leadership in biological systems, with meaningful implication to social and industrial applications.

h/t The Physics arXiv blog

Wednesday, July 15, 2009

Futures Juncture Free Week

Elliott Wave International has another "Free Week" offer available to anyone who takes the time to sign up for their free "Club EWI" service. This offer allows you full access to EWI's Futures Junctures product. For those of you who are already signed up, you already have access.

I highly recommend taking advantage of this opportunity, even if you are not a commodities trader. Watching how EWI uses Wave Principle for these kinds of markets in real time allows you to make up your own mind on just how useful WP can be.

These are the actual reports, not watered-down samples and you get FREE forecasts and analysis for:

  • Soybeans
  • Corn
  • Pork Bellies
  • Wheat
  • Lean Hogs
  • Sugar
  • Cocoa
  • Live Cattle
  • Cotton
  • Orange Juice
  • Feeder Cattle
  • Coffee

Your full FreeWeek of access includes: daily subscriber videos from EWI Senior Commodities Analyst Jeffrey Kennedy, his Weekly Wrap Up video which delivers Elliott wave forecasts of up to 18 different markets, and his Monthly Feature (his latest is on Soybeans, Corn and Wheat), plus regular updates on key sentiment indicators such as the Daily Sentiment Index and Jeffrey's own "Futures Junctures Index of Crowd Psychology."

The usual caveat applies: If you sign up for a Club EWI membership I get a small credit as an EWI affiliate. If this type of arrangement bothers you, then by all means go directly to the Elliott Wave International site by typing in the address instead of using a link from this blog. Doing it that way allows you to sign up from their site without it showing that you linked over from here. I honestly don't care which way you do it. This is important information and it needs to be disseminated.

Take advantage of this opportunity. There is a lot of good stuff just being handed to you. Reach out and take it.

The Colony

I've been trying to limit my doses of TeeVee over the past year or so, but this looks intriguing as hell:

Tuesday, July 14, 2009

Predictable Irrationality

Fascinating (in my opinion) talk that has many intersections with Wave Principle theory and Socionomics.

For those interested in memeering, think about what he has to say about how "choices" get made - both by the general public and by "experts."

Monday, July 13, 2009

More Workplace Anger

I am wondering when this sort of anger will cross the Atlantic...

French workers threaten to blow up factory
PARIS, July 12 (Reuters) - Workers at collapsed French car parts maker New Fabris threatened on Sunday to blow up their factory if they did not receive payouts by July 31 from auto groups Renault and Peugeot to compensate for their lost jobs...

Thursday, July 9, 2009

Unhealthy Times

Not sure if it means anything, but the lifespan of folks in high finance seems to be creeping downward these days.

Hedge fund CEO dies in glider accident
by Emily Firth, citywire
Jean-Pierre Aguilar, the CEO and co-founder of French alternative asset manager, Capital Fund Management (CFM), died in a glider accident on Saturday, the firm has announced.

Set up in 1991, Paris-based CFM is one of the oldest French alternative managers. It specialises in statistical arbitrage on futures, equities and options...

Mssr. Aguilar was a computer scientist and big-time quant. I wonder what algos he was running?

Then this odd-sounding, follow-on tragedy:

Trader Dies in London Fall
By Tara Loader Wilkinson
A 24-year-old equity sales trader who worked at Deutsche Bank in London died this weekend after falling from a rooftop garden in London's financial district. Anjool Malde worked in the small- and midcap equity sales business at the German bank since joining as a graduate trainee in 2005...

...He had been asked to leave work at 3 p.m. on Friday, but Deutsche Bank said he wasn't under any suspension or part of a disciplinary action. "He was helping the bank with an inquiry into an IT matter," according to a bank spokesman. "It concluded at 3pm on Friday and he was expected to come back in this week to continue with the matter. It was very preliminary. We are deeply saddened by our colleague's death, and our thoughts are with his family and loved ones at this time..."

Huh. An IT matter? Glad I bailed from computer programming in the finance industry back in 2002. Getting unhealthy out there for folks involved with computers and finance.

Monday, July 6, 2009

Good Stuff

The latest Socionomist is out with a nice article comparing alcohol prohibition to the War on Drugs with some really fascinating correlations and interesting detail on the current status of the narcotraficantes in Mexico. In addition, for those of you that remember the "U.S. Serial Killers and Bear Markets" chart from the 2004 Theorist, it is reprinted here along with a some updated info from Dr. Ken Olson on murder rates vs. social mood (as measured by market indices).

Good stuff. Feel free to discuss in the Comments section if you are so inclined.

Europe in 2020?

Map Source: Chirol, at Coming Anarchy

Secession should be one of the hallmarks of the coming era of negative mood, according to socionomic theory.

With that in mind, I suggest you check out this posting over at Coming Anarchy:

Microstate Madness - Europe in 2020
by Chirol at Coming Anarchy
Building on one of my favorite subjects, devolution, the decline of the state and the proliferation of microstates, I’ve put together a map of the future of Europe in 2020. It is purely speculative and in no way a firm prediction, but rather a sketch of the possibilities and list of the most likely cases. It is by no means exhaustive and you’ll notice seemingly obvious states such as Wales, Sicily, Crete and others are not listed. This is in part because I will argue that two local conditions are necessary for a viable movement and successful independence.

First, the state must be well off economically and able to hold it’s own, i.e. it must have more to gain than lose. Hence, states like Baden-Württemberg and Bavaria are the two richest in Germany, essentially subsidizing the rest would have more motivation than the poor underdeveloped east German states which feed off the rest. The second condition is that the region must have a well developed and unique identity which comes in the form of a strong dialect or different language, history of independence or autonomy and other characteristics that go into defining a culture. Thus, Bavaria (which is actually what most people think about when they think of Germany) is both rich and has a long cultural past and different identity. It has its own dialect, a history of independence and a host of other unique traits including traditional song, dance, clothes etc that other regions lack...

The gents at CA are very sharp and their site is a must-read, in my opinion, as they focus on the fault lines and fracture points on the geopolitical map - the exact spots where the results of this coming Great Bear Market will be felt first.

Setting Up the Great Rollover

Sometimes looking at the finance markets through the lense of the Wave Principle (and at the world through the lense of Socionomics for that matter) is difficult (for me, at least). These models intepret events and the "news" associated with them as tags or descriptors used to describe how the mass majority of people act out a herding process - a process that can be described as waves of optimism and pessimism.

For someone like me who was (and still is) a news junkie growing up, breaking loose of the view that the "news" is describing the "true" cause of events is tough. Even though I see, intellectually, how the "news" or "fundamentals" theory is woefully inadequate and how the Wave Principle does a much better job describing the world, it is sometimes hard to shake out of that mindset.

That's why we occasionally do a "memeering watch" here at FutureJacked. I am convinced that some very smart people have a very solid understanding of the thesis of Socionomics - whether they call it by that name or not - and that they do their best to spread memes that will help direct and/or deflect the tides of human emotion down channels that will benefit them and/or their clients (in terms of advertising or high net worth banking) or harm their opponents (in terms of finance or politics).

With that thesis in mind, I am trying to figure out which "emotional outlet" or "excuse" the coming Primary Wave 3 collapse will use to express itself. It will certainly have a markets component to it. With the recent, and virulent, attacks on Goldman Sachs that have sprung up in the blogosphere (see here, here and a good one here just for appetizers) and via a scathing article in Rolling Stone by Matt Taibbi, I'm thinking everyone's finance bogeyman - the bright boys and girls at Goldman Sachs - may turn out to the whipping boy for the next go-round.

A major scandal, if not outright collapse, at Goldman would have enormous consequences. Goldman is not just a major player in bond and equity markets - where they could serve as the scapegoat for a return to negative mood -they have "alums" in government who could serve as lightning rods for anger in politics as well. There will be fury. There will be blamestorming. There will be prosecutions.

Keep your eye on Goldman. I think they may be served up as the main dish for the Great Bear in the coming months...

Thursday, July 2, 2009

Have a Safe, Happy and Reflective 4th of July

Happy 4th of July one and all. Be safe and, if have time to pause from your labors, take time to reflect a bit on the founding principles of our country. As the waves that guide the human experience sweep us into a new and unknown country, let's resolve to take with us the best of what the United States was and could be again, discard that which is unworthy of us and nurture the flame of liberty until it is time to relight the bonfires of freedom and build up something new. Something worth living for - not just some system that can be merely tolerated.

The Rattlesnake as a Symbol of America

I observed on one of the drums belonging to the marines now raising, there was painted a Rattle-Snake, with this modest motto under it, "Don't tread on me." As I know it is the custom to have some device on the arms of every country, I supposed this may have been intended for the arms of America; and as I have nothing to do with public affairs, and as my time is perfectly my own, in order to divert an idle hour, I sat down to guess what could have been intended by this uncommon device — I took care, however, to consult on this occasion a person who is acquainted with heraldry, from whom I learned, that it is a rule among the learned of that science "That the worthy properties of the animal, in the crest-born, shall be considered," and, "That the base ones cannot have been intended;" he likewise informed me that the ancients considered the serpent as an emblem of wisdom, and in a certain attitude of endless duration — both which circumstances I suppose may have been had in view. Having gained this intelligence, and recollecting that countries are sometimes represented by animals peculiar to them, it occurred to me that the Rattle-Snake is found in no other quarter of the world besides America, and may therefore have been chosen, on that account, to represent her.

But then "the worldly properties" of a Snake I judged would be hard to point out. This rather raised than suppressed my curiosity, and having frequently seen the Rattle-Snake, I ran over in my mind every property by which she was distinguished, not only from other animals, but from those of the same genus or class of animals, endeavoring to fix some meaning to each, not wholly inconsistent with common sense.
I recollected that her eye excelled in brightness, that of any other animal, and that she has no eye-lids. She may therefore be esteemed an emblem of vigilance. She never begins an attack, nor, when once engaged, ever surrenders: She is therefore an emblem of magnanimity and true courage. As if anxious to prevent all pretensions of quarreling with her, the weapons with which nature has furnished her, she conceals in the roof of her mouth, so that, to those who are unacquainted with her, she appears to be a most defenseless animal; and even when those weapons are shown and extended for her defense, they appear weak and contemptible; but their wounds however small, are decisive and fatal. Conscious of this, she never wounds 'till she has generously given notice, even to her enemy, and cautioned him against the danger of treading on her.

Was I wrong, Sir, in thinking this a strong picture of the temper and conduct of America? The poison of her teeth is the necessary means of digesting her food, and at the same time is certain destruction to her enemies. This may be understood to intimate that those things which are destructive to our enemies, may be to us not only harmless, but absolutely necessary to our existence. I confess I was wholly at a loss what to make of the rattles, 'till I went back and counted them and found them just thirteen, exactly the number of the Colonies united in America; and I recollected too that this was the only part of the Snake which increased in numbers. Perhaps it might be only fancy, but, I conceited the painter had shown a half formed additional rattle, which, I suppose, may have been intended to represent the province of Canada.

'Tis curious and amazing to observe how distinct and independent of each other the rattles of this animal are, and yet how firmly they are united together, so as never to be separated but by breaking them to pieces. One of those rattles singly, is incapable of producing sound, but the ringing of thirteen together, is sufficient to alarm the boldest man living.

The Rattle-Snake is solitary, and associates with her kind only when it is necessary for their preservation. In winter, the warmth of a number together will preserve their lives, while singly, they would probably perish. The power of fascination attributed to her, by a generous construction, may be understood to mean, that those who consider the liberty and blessings which America affords, and once come over to her, never afterwards leave her, but spend their lives with her. She strongly resembles America in this, that she is beautiful in youth and her beauty increaseth with her age, "her tongue also is blue and forked as the lightning, and her abode is among impenetrable rocks."

An American Guesser

Ha Ha Ha Haaaaa

Wow, reality is going to bitch-slap poor DK in the coming months. I don't want him put "in a burlap sack and beaten with reeds." No way, no how. This poor delusional fool is the perfect poster child for what passes for modern American popular thinking on finance. Keep up the chatter, amigo. We need all the laughs we can get.

By the way, I thought for the "Golden Cross" technical indicator to be a valid signal, doesn't the 200 DMA have to be moving up?

Something Awful

For those of you who know how the Pashtuns treated Soviet prisoners during their war in Afghanistan, you know why I am sick at my stomach on reading this:

American soldier believed captured in Afghanistan
By M. Karim Faiez and Laura King, Los Angeles Times
Reporting from Kabul and Istanbul -- An American soldier is believed to have been captured by insurgents in eastern Afghanistan, the U.S. military said today.The soldier has been missing from his unit since Tuesday, said Army Capt. Elizabeth Mathias. Citing concern for his safety, she did not disclose the circumstances of his disappearance, or explain how military authorities had concluded that he was being held, or say whether there had been any communication with insurgents about the missing man.

The brief military statement was not definitive about a capture having occurred; Mathias said the soldier in question was "believed" to have fallen into the hands of "militant forces..."

Wednesday, July 1, 2009

The Potemkin Market

Big props to Zero Hedge on capturing this clip from Bloomberg.

"I have a feeling one day the door is gonna close, everyone is going to be running for the exits, there is going to be a major move in the market and everyone is going to wonder "what happened?" Ever heard a better description of Third Wave in a Bear Market?

This Potemkin Village they've built on Wall Street is going to collapse in a heap of anger and recrimination. Be wary. Be careful. Keep your eyes open, some cash at hand and be ready to ride the waves that will drown the fortunes of the vast majority of investors out there.