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Japanese Experience Could Never Happen Here

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#16 DrStool


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Posted 15 December 2002 - 12:39 PM

Yes and no. I've looked at this phenomenon. Cycles fluctuate around around a straight line secular trend mean rate of increase or decline. Deflating bubbles are especially regular in that regard. As I recall the numbers, (don't quote me) bubbles tend to deflate at the compound rate of roughly >2%+ per month. The Nas has had a higher rate because its components are more volatile. The channel is hundreds of points wide, ranging 30% on either side of the mean. That allows for huge fluctuations which obscure the underlying trend when looked at on a 1 year chart.

Although the straight line trend typically does not last longer than 3 years, the uptrend lasted for 7 years. It's possible that the current trend could continue for 18 months. Why not? Recent linear regression analysis suggests it could be accelerating to the downside, however. The above projection could be too bullish. I expect the Nasdaq will eventually be disbanded. Surviving compnies will go to the Big Board. The rest will be on the pink sheets, and nobody will care.

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#17 BAREister


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Posted 15 December 2002 - 01:59 PM

FUR FURther ANALogies to the Nicked!!!>>>DIE??? lookee heeeeeer:


Mr Eliades w a supersophisticated statistical model about "curves"*** 'n such. Also interesting stuff re SENTIMENT.

Doc, his chart overlay ain't ASS congruent ASS yours, however...

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Posted 15 December 2002 - 02:59 PM

Doc, the number of 2% per month can be found also in the latest article of Adam Hamilton.

However, the Japanese bubble has been deflating for 13 years already - and their stock market has exactly the pattern I mentioned (big down move, even bigger sideways move with lots of big swings, followed by a final big down move).


#19 DrStool


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Posted 15 December 2002 - 03:03 PM

Yeah they actually have two separate deflations with two intervening mini-bubbles.

Anotehr great chart of a deflating bubble is gold from 1980 to 2000. Anyone have that handy to link or post here?

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Posted 15 December 2002 - 03:10 PM

Deflation of the gold bubble:

Posted Image

It, too, illustrates my point - a big down move (80-82), followed by an even bigger sideways-down move (82-96), followed by a final down move (96-00).


#21 Hypertiger


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Posted 15 December 2002 - 03:31 PM

Japan is like everyone else dependant on the U.S. When the U.S. goes down it will finish everyone else. Plain and simple like I said, the moment of truth could happen at any time. japan has chosen the slow deflation deal with six day work weeks and low unemployment. The U.S. is currently doing almost everything to ensure a hyperdeflationary collapse. I see nothing that could be done at this point to stop it.

But miracles do happen...
"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money (at the request of the consumer) we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hemphill, Atlanta Federal Reserve Bank,1938...

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