Monday, July 6, 2015

Elliot Wave (Social Mood) Will Now Render Final Judgement

On Central Bank reverse Social Mood Re-engineering. Or what I call herding by psychopaths:

Prechter has this entire wave since the 2009 bottom as a "b" wave, meaning it's a headfake. Totally unsupported by economic fundamentals. It's fake to you and me, to everyone else it's the almighty consumption oriented "status quo". And they've bound their fate to it...

(logarithmic to indicate relative percentage)

It didn't have to be this way, but it is. If this society had any recollection whatsoever as to how they get serial ass raped by the same Bernie Madoffs over and over again, this wouldn't have to happen.

Central banksters have attempted to artificially levitate financial markets by using drip feed bond buying programs. At the margin they have succeeded in compressing returns and forcing investors in every asset class to onboard more risk. In the process, they have engineered a self-fuelling manic feedback loop making investors think they are invincible and hence willing to onboard greater and greater risk.

What the Central Banksters do not control however, are asset allocation decisions: As in, what assets should I own when risk gets binary repriced for economic reality. In the context of a manic artificially levitated market with investors chasing ever smaller gain with ever more money, all that means is that the late stage Manic to Panic Social Mood swing is arriving fashionably late, pending human history's largest stampede from risk. 

There's no way out of the Hotel Californication
Rydex Bull: Bear Asset Allocation:

"It was a bad time to be at record leverage"

NYSE Leverage: