The Keys to the Shadow banking system uses a dynamic fractal matrix based on the top economist in the world. The intellectual theories of David Rosenberg, Noureli Roubini, Gary Schilling, Robert Schiller, Dr. Herrera and Paul Krugman are used to create a economic fractal matrix.The global deflation is the major driving force for the next 9 years. The fractal matrix gives solutions to stocks, bonds, real estate, currencies, gold, commodities, oil and Macro-trend forecasting.
THE STOCK MARKET BEGINS A YEARLY COLLAPSE IN EQUITY VALUES. THE DEFLATIONARY RING OF FIRE HAS HIT THE STOCK MARKET. THE COMBINATION OF THE $ 3 TRILLION D0LLAR COLLAPSE OF OIL MARKETS, CHINESE TRILLION DOLLAR GDP MELTDOWN, THE TRILLION DOLLAR THIRD WORLD EXPORT MARKETS COLLAPSE AND OVERVALUED WORLD STOCK MARKETS HAVE CREATED THE PERFECT STORM.
THE EQUITY BUBBLE HAS CREATED A NEW OUTFLOW OF INVESTMENT DOLLARS TO SAFETY HAVENS. THE DEFLATIONARY HAVENS ARE FOUND IN GOLD, BONDS, HEALTH STOCKS, DEFENSE STOCKS, AND EVEN BANK ACCOUNTS.
THE USA STOCK MARKET IS GOING TO AVERAGE 38% FOR THE BEARS. THIS IS THE YEAR OF THE GREAT SHORT. THE USA STOCK MARKET HAS CREATED SOLID NEGATIVE STOCK MARKET FUNDAMENTALS.
WHAT ARE THE NEW STOCK MARKET FUNDAMENTALS: (BASED ON THE PERCENT DOWN FROM 52 WEEK HIGH) THE SHORT CRITERIA IS A 50% DROP TO BE AN EFFECTIVE SHORT RESEARCH AREA. THE MAJOR STOCKS OF THOMSON REUTERS U.S. MOST SHORTED INDEX TRACES 25 TO THE TOP COMPANIES THAT HAVE SHORTS ON THEM.
CURRENTLY, WORLD STOCK MARKETS HAVE LOST $ 8 TRILLION IN VALUE!!! THE DOW STOCKS NEED TO FALL TO 10,000. WE NEED A 6,000 POINT DROP! WE NEED 600 POINT DROP A MONTH FOR 10 MONTHS. WE NEED ABOUT 150 POINT CUMULATIVE DROP A WEEK.
1. LARGE CAPS ARE DOWN -21.3% * BEGINNING SHORT
2. MID-CAPS ARE DOWN -25.3% * BEGINNING SHORT
3. SMALL CAPS ARE DOWN -29.2% *MIDDLE RANGE SHORT
4. FINANCIALS ARE DOWN - 19% * PROTO SHORTS
5. CONSUMER STAPLES -17.6% *PROTO SHORTS
6. UTILITIES ARE DOWN -17.6% *PROTO SHORTS
7. ENERGY IS DOWN 51.6% * HEAVY SHORT (CANADIAN OIL NOW LESS THAN $10.00 A BARRELL)
THE ENERGY COMPLEX INCLUDES OIL EQUITIES AND OIL JUNK BONDS AND HEAVY BAD LOANS IN THE BANKING INDUSTRY. THE OIL COMPANIES HAVE SMALL SUPPLIERS WHO ARE GOING BANKRUPT AND EMPLOYMENT FALLOUT IS OVER 250,000 JOBS.
THE ENERGY COMPLEX INCLUDES GEOGRAPHICAL REGIONS AND STATE AND CITY TAX BASE. THE REAL ESTATE INDUSTRY IN THE OIL PATCH IS CREATING OVERSUPPLY AND LOWER PRICES.
THIS IS AN EXCITING MARKET WITH GREAT NEGATIVE MACRO-ECONOMIC FUNDAMENTALS. THE MARKET IS NOW IN SELECTED SHORT STOCK MARKET CIRCUS MODE.
CURRENTLY, THE CANADIAN OIL SANDS BITUMEN HAS FALLEN BELOW $10.00 A BARRELL.
THE CHINESE SHORT AND ITS ASSOCIATED EMERGING MARKETS ARE GOOD SHORT POINTS. THE CANADIAN STOCK MARKET IS FACING AN EMERGING SHORT. THE CHINESE SATELLITE EMERGING NATIONS ARE AN EXCELLENT SHORT.
OUR STOCK MARKET NEEDS TO RESET TO REALISTIC STOCK VALUATIONS. THE MARKET LOOKS LIKE A GREAT SANTA CLAUS RALLY IN REVERSE.
THIS IS THE GREAT BEAR COMING TO VISIT THE USA FOR A YEAR! THE MARKET WILL ULTIMATELY RECOVER BUT WHAT A THRILL RIDE! THE BEAR MARKET WILL BECOME THE LARGEST BEAR IN HISTORY!
THIS IS NOT EASY MONEY AND REQUIRES LOTS OF DISCIPLINE DUE TO BULL RALLIES! REMEMBER THE USA IS STILL THE FLIGHT CAPITAL HAVEN OF THE WORLD. THE US DOLLAR BASED INVESTMENTS ARE FLIGHT CAPITALS FIRST CHOICE FOR CAPITAL PRESERVATION.
THERE IS CURRENTLY $ 15 TRILLION IN OFFSHORE MONEY AND THEY INVEST IN THE MARKET! THE CHINESE ARE SENDING OVER $ 300 BILLION OUT OF CHINA. THE EXCESS MONEY IS GOING INTO BONDS AND SOME STRATEGIC BULL RALLIES.
WHAT HAPPENED TO THE CANADIAN ECONOMY? THE CANADIAN ECONOMY WAS ABLE TO WITHSTAND THE AMERICAN REAL ESTATE BUBBLE OF 2007 AND GO AFTER GREAT BARGAINS IN THE USA.
NOW, THE TABLES ARE IN REVERSE AND THE AMERICAN INVESTOR CAN GO TO CANADA AND RECEIVE GREAT BARGAINS! WE ARE LOOKING AT 90% DECLINE IN CANADIAN REAL ESTATE VALUES. THE CANADIAN INVESTORS IN ARIZONA ARE SELLING AT RECORD RATES IN ORDER TO CASH IN ON THE CURRENCY CONVERSION BONUS!
HOW DID THIS COMING COLLAPSE COME ABOUT? THE CANADIAN FINANCIAL SYSTEM AND CANADIAN REAL ESTATE BROKERS SET UP A VERTICAL INTEGRATION FOR HARVESTING BUBBLE PROFITS.
STEP ONE: THE MORTGAGE CUSTOMER WAS ALLOWED TO BORROW ON LOW RATES FOR 35 TO 40 YEARS. THIS ALLOWED FOR THE CREATION OF A LOAN COLLATERAL AND EQUITY FLIPPING BUBBLE.
CANADIAN BORROWERS WERE ABLE TO USE THEIR PENSIONS, LIFE INSURANCE, CREDIT CARDS AND HELOC TO INVEST IN REAL ESTATE. THE OVERHEATING OF VANCOUVER, TORONTO, AND MONTREAL HAS NOW LED TO SUPER INFLATED REAL ESTATE PRICES.
STEP TWO: THE MORTGAGE BROKER WAS ABLE TO PROCESS THESE REAL ESTATE SALES AND USE THE BANKING SYSTEM FOR INSTANT LIQUIDITY. THE RECORD LOW INTEREST RATES CREATE THE INCENTIVE FOR EASY MONEY TO BE SPENT ON LARGE ESTATE IN VANCOUVER. THE AVERAGE HOME PRICES ARE AT $ 1 MILLION IN VANCOUVER.
STEP THREE: THE RAPID APPRECIATION OF HOMES AS FIXED INCOME COLLATERAL WAS USED BY INVESTMENT BANKS TO BUNDLE THESE INTO CREDIT INSTRUMENTS KNOWN AS CREDIT MARKET. THESE COULD BE BUNDLED AND SOLD FOR INTERNATIONAL INVESTORS.
STEVE EISMAN OF NEUBERGER BERMAN GROUP SEES THE CANADIAN HOUSING CRASH PARTY AS A GREAT OPPORTUNITY. THE REALITY IS THAT PARTY IS OVER FOR THE CANADIAN REAL ESTATE FUN BUS AND THE GAME IS NOW A GREAT MONEY MAKER FOR HEDGE FUNDS. IN A WORLD OF 2% GROWTH, THE CANADIAN SHORT IS WORTH A FORTUNE.
STEP FOUR: THE CANADIAN REAL ESTATE MARKET CREATED A SUPPORT SYSTEM THAT NOW IS IN ECONOMIC DANGER.
THE SUPPORT INDUSTRIES CONSISTS OF REGIONAL BANKS, HOME BUILDERS, TITLE INSURERS, INVESTMENT COMPANIES, CREDIT INSURERS, FURNITURE MAKERS, APPLIANCE AND TOOL MAKERS, CONSTRUCTION AND ENGINEERING COMPANIES, AND CONSUMER FINANCE COMPANIES. IT TOOK THE AMERICAN ROOM STORE 8 YEARS TO EVENTUALLY FILE FOR BANKRUPTCY IN 2015.
ALSO, ADD TO YOUR LIST OFFICE AND COMMERICAL REITS, AND RETAIL REITS. ALL OF THESE AREAS HAVE BEEN INTEGRATED INTO A DOWNWARD INVESTMENT. THE LOSSES WILL BE STAGGERING. THE CANADIAN REAL ESTATE MARKET HAS CREATED THE SHOCK TO THE SYSTEM.
STEP FIVE: THE MACRO-ECONOMIC FEATURES WILL FORCE A 8 YEAR DOWNWARD PRESSURE FROM LOW OIL PRICES, FALLING COMMODITY PRICES, AND LOWER VALUE OF THE LONNIE. THE CHINESE ECONOMY WAS RESPONSIBLE FOR 1/3 OF THE WORLD GDP AND THIS IS GONE! THE WORLD GDP IS LESS THAN 2% GROWTH.
THE FINAL DEFLATIONARY REALITY FOR CANADA IS THAT IF THERE IS NO QUANTITIVE EASING OR FORCED BANK LIQUIDITY THEN THE ECONOMY WILL COLLAPSE. THERE WILL BE NO GROWTH ONCE THE FINANCIAL FUNDAMENTALS KICK IN AND RESULT IN DEFLATIONARY DELEVERAGING.
THE ONLY WAY TO SURVIVE IS TO BORROW FROM FUTURE GROWTH BY USING QUANTITIVE EASING. THERE IS NO OTHER WAY. THE FINANCIAL GAP HAS TO BE CREATED IN ORDER TO CREATE FINANCIAL LIQUIDITY. THE USA MODEL SHOW MULTIPLE BEAR RALLIES CREATED BY BANK LIQUIDITY. THIS WILL ALLOW INVESTORS TO MAKE MONEY IN THE CANADIAN STOCK MARKET. THIS WILL BAILOUT THE CANADIAN BANKS AND MORTGAGE BROKERS.
THE CANADIAN ECONOMY IS NOW CREATING PART-TIME JOBS AND LOWER PAYING JOBS. CANADIANS ARE HEADING TO SUBSTANDARD LIVING STANDARDS. THE MANUFACTURING SECTOR IS RAPIDLY FALLING AND BLUE COLLAR JOBS ARE SCARCE. THE MIDDLE CLASS IS FACING THE SAME CRISIS AS IN THE UNITED STATES.
STEP SIX: THE PROBLEM IS THAT THE CANADIAN ECONOMY IS NOW STARTING A LONG PERIOD OF ASSET DELEVERAGING. THIS FLAT LINING IS THE KEY TO UNDERSTANDING THE FUTURE OF CANADA. CANADA IS A GREAT COUNTRY WITH MANY RESOURCES BUT IS NOW HEADING FOR THE 99 CENT STORE!
THE FEDERAL RESERVE HAS RAISED THE COST OF MONEY BY .25 WITH A GOAL OF 2% OVER 2 YEARS. THIS IS LIKE PUTTING A CAR IN REVERSE AND HOPING IT WILL GO INTO DRIVE. THE TRANSMISSION CABLE IS BROKEN AND CANNOT BE REPLACED BY A DEFECT PART.
THIS STRANGE ECONOMIC PARADOX THAT FEDERAL RESERVE INFLATIONARY GOAL OF 2% IN A DEFLATIONARY ECONOMY. THIS IS THE START OF A NEGATIVE CYCLE. THE FEDERAL RESERVE FINANCIAL CHAIN REACTION IS DESIGNED TO JUMP START A SLOW MOVING TURTLE INFLATION.
WE ARE NOT IN AN INFLATIONARY ECONOMY. WE ARE ABOUT 5 YEARS FROM AN INFLATIONARY ECONOMY. THIS MOVE IS COUNTER-PRODUCTIVE BECAUSE IT DECREASES THE DEMAND FOR MONEY. THE BANKS HAVE NO MAJOR COMMERICAL DEMAND FOR MONEY DUE TO THE FACT THAT THEIR IS NO PRICING POWER AND MORE EMPLOYMENT CUTS ARE THE NEW NORMAL.
THE NEGATIVE CHAIN REACTION WILL HIT THE STOCK MARKET, COMMODITY MARKETS, CURRENCY MARKETS AND INCREASE LOAN DEFAULTS. THE U.S.A. INFRASTRUCTURE IS STILL BEING HELD HOSTAGE BY CONGRESS AND MIDDLE EASTERN MILITARY POLICY HAS COST THE USA ABOUT $ 3 TRILLION DOLLARS. WE ARE NOT IN A NEW ERA:
WE ARE STILL DELEVERAGING ASSETS! THERE IS A MIXTURE OF GOOD AND BAD DEFLATION. CHINA IS READY TO EXPLODE DOWNWARD. CHINA CAN ONLY MOVE TO CURRENCY PROTECTIONISM AND INTERNATIONAL TRADE PROTECTIONISM TO PROTECT ITS CONSUMER MARKETS. THIS IS A PROTECTIONIST FINANCIAL CONTAGION.
WE HAVE OVER 1 MILLIONS HOMES IN SURPLUS AND THERE IS NO CONSTRUCTION LABOR AVAILABLE. THE NEW ECONOMIC IMMIGRATION MODEL WILL RESULT IN A COLLAPSE OF UNSKILLED AND SEMI-SKILLED EMPLOYMENT POOLS. THERE IS A MASSIVE SHORTAGE OF UNSKILLED LABOR AND THE MINIMUM WAGE NOW HAS MADE THESE MARKETS HARD TO STAFF. THE AMERICAN UNDERCLASS IS NOW ON WAGE EQUIVALENT ENTITLEMENT BENEFITS.
THE AMERICAN PEOPLE NEED A TAX CUT AND $2,000.00 REBATE FROM THE NEW TAX CODE. THE PROBLEM INHERENT WITH A DEFLATIONARY ECONOMY IS THAT AMERICANS ARE WORRIED ABOUT SAVINGS AND NOT INVESTING. THE FEDERAL RESERVE DOES NOT KNOW HOW TO PUT MONEY BACK INTO THE HANDS OF THE PEOPLE. THEY CAN ONLY CREATE PRICE STABILIZATION AND SOME TYPE OF DEMAND FOR MONEY. THERE IS NO COMMERICAL DEMAND FOR LARGE LOANS AND CONSUMERS ARE STILL WITHOUT SAVINGS OR HOME EQUITY. THE CONGRESS CANNOT MOVE THE MARKETS BECAUSE THEY HAVE CREATED FINANCIAL GRIDLOCK.
The coming recession in the US industrial based is leading to a highly segmented American Marketplace. The industrial companies are slated to collapse between 30% to 40% and will take another five years to work out the economic deflation.. Why has this happened?
1. The Chinese Manufacturing Depression has resulted in the collapse of commodity prices and demand from emerging economies commodity or currency. The Chinese have to dump industrial goods at lower world market prices. The global competition for markets is shrinking.
2. The Strong US Dollar has created a super-demand for foreign consumer imports and equipment. The strong dollar has created a trade barrier for American manufacturing companies. The Chinese have needed to devaluate their currency to create demand for their products.
The cost of industrial goods has gone up and no longer is economically feasible to buy these industrial goods. It makes no sense to buy American industrial products , but it does make sense to bring Government subsidies to these industrial companies.
3. The American industrial companies are suffering from industrial overcapacity and dropping sales and earnings. American banks are holding billions in electronic credit with the Federal Reserve and they would benefit from the Federal Reserve increase. They would continue to refuse to lend to consumers. Banks could begin to lend on a massive scale but who is borrowing when prices are dropping?
4. The Federal Reserve is currently looking at unemployment numbers and housing starts to plan on a December rate hike to 1 or 2%. This would increase the cost of money and add an additional burden to Industrial Companies. This increase of the cost of money within a deflationary economy will result in at least a 4,000 pts. drop in the stock market. This will result in higher industrial and construction unemployment.
5. The Federal Reserve higher cost of money decision would be bad alternative in a deflationary economy. The Keynesian theory holds that increasing the accelerator and multiplier will create greater demand. The Federal Reserve would do the opposite. The Federal Reserve would scare off spending and create a need for savings. Industrial Companies have cut the capital expenditures and it has already impacted downward supply chain of suppliers. The Investment dollar is now frozen.
Debt is no longer an asset in a deflationary economy. You are paying back in expensive dollars. The Federal Reserve would freeze housing sales and car sales. The downward deflationary spiral could last for years. Is the Federal Reserve willing to gamble with the consumer sector and create a deflationary freefall?
The interdisciplinary study of history has led to greater discoveries in the field. We need to integrate the social sciences, humanities and history into a unified field of study. The need for a unified field of history today are based on the advanced interdisciplinary technologies of the 21st Century. The 21st century technologies are making interdisciplinary research a modern imperative. We must integrate the new technologies with a unified field of history. History is too important to be left to 19th Century Paradigm of the German University over-specialization.
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