On Free Will

"It’s almost incomprehensible to consider that there could be a mathematical expression that explains mass human behavior. That is the most fascinating aspect of the Wave Principle. People are a long way from accepting it as a possibility in the social sciences. Still, this is not determinism. As individuals, we can unquestionably exert free will. But the style of behavior of the crowd is entirely different from that of an individual. It is based upon unconscious mental processes, not reason... Collective psychology is impulsive, self- generating, self-sustaining and self-reversing. Almost everyone believes that social actions cause changes in social psychology. If that is true, then events must be so perfectly determined that they create the Elliott wave patterns we see in the markets. For people to claim that the latest idea from the White House...or the latest statistic on the trade deficit or earnings or war or natural disaster has any effect on the market’s pattern, that such things are determinants of stock prices in any way, is suggesting a far more radical view of the harmony of the universe than I am. In other words, to argue that events cause the state of social psychology is to argue that events are patterned, which is determinism. In that case, free will is invalid, in which case no one could make money from the Wave Principle, which we have shown can be done. On the other hand, if social psychology guides the tenor of social actions, then it is only mass psychology, which is apparently a process governed by the unconscious mind, that need be patterned to produce structure in markets."

Bob Prechter

Déjà vu

February 2, 1930: Market Recovering Faster Than Expected

February 2, 1930: Banks Have Started Hiring Again

February 5, 1930: The Cash On The Sidelines Is Coming Back!

February 7, 1930: Easy Money Driving Recovery

February 9, 1930: "New Era" Not Over Yet!

February 28, 1930: Uh Oh, The Market's Getting Overbought

March 4, 1930: That Wasn't A Crash--It Was Just A Dip!

March 6-7, 1930: More Easy Money

March 7, 1930: The Crash Wasn't So Bad After All

March 9, 1930: Unemployment Is Finally Under Control

March 12, 1930: But What Happens If Foreigners Stop Financing Us?

March 22, 1930: Is It A New Bull Market Or A Sucker's Rally?

March 26, 1930: The New Bull Market Is Great For Business

April 16, 1930: But Wait, Are The Fundamentals Really That Good?

...they just can´t kill the (bull) beast...

14 Burbujas.....

Crisis de Confianza New Currency

By Jonathan Tirone

Sept. 7 (Bloomberg) -- The dollar’s role in international
trade should be reduced by establishing a new currency to
protect emerging markets from the “confidence game” of
financial speculation, the United Nations said.

UN countries should agree on the creation of a global
reserve bank to issue the currency and to monitor the national
exchange rates of its members, the Geneva-based UN Conference on
Trade and Development said today in a report.

China, India, Brazil and Russia this year called for a
replacement to the dollar as the main reserve currency after the
financial crisis sparked by the collapse of the U.S. mortgage
market led to the worst global recession since World War II.
China, the world’s largest holder of dollar reserves, said a
supranational currency such as the International Monetary Fund’s
special drawing rights, or SDRs, may add stability.

“There’s a much better chance of achieving a stable
pattern of exchange rates in a multilaterally-agreed framework
for exchange-rate management,” Heiner Flassbeck, co-author of
the report and a UNCTAD director, said in an interview from
Geneva. “An initiative equivalent to Bretton Woods or the
European Monetary System is needed.”

The 1944 Bretton Woods agreement created the modern global
economic system and institutions including the IMF and World
Bank.

Enhanced SDRs

While it would be desirable to strengthen SDRs, a unit of
account based on a basket of currencies, it wouldn’t be enough
to aid emerging markets most in need of liquidity, said
Flassbeck, a former German deputy finance minister who worked in
1997-1998 with then U.S. Deputy Treasury Secretary Lawrence
Summers to contain the Asian financial crisis.

Emerging-market countries are underrepresented at the IMF,
hindering the effectiveness of enhanced SDR allocations, the UN
said. An organization should be created to manage real exchange
rates between countries measured by purchasing power and
adjusted to inflation differentials and development levels, it
said.

“The most important lesson of the global crisis is that
financial markets don’t get prices right,” Flassbeck said.
“Governments are being tempted by the resulting confidence game
catering to financial-market participants who have shown they’re
inept at assessing risk.”

The 45-year-old UN group, run by former World Trade
Organization chief Supachai Panitchpakdi, “promotes integration
of developing countries in the world economy,” according to its
Web site. Emerging-market nations should consider restricting
capital mobility until a new system is in place, the group said.

The world body began issuing warnings in 2006 about
financial imbalances leading to a global recession.

The UN Trade and Development report is being held for
release via print media until 6 p.m. London time.

To contact the reporters on this story:
Jonathan Tirone in Vienna at
jtirone@bloomberg.net

EW S&P 2010/2012

From S2.
at http://caldaroew.spaces.live.com/

Obviously, even if I'm right about the 450ish or 300ish or lower price targets in 2010-2011, the path could vary wildly from my projection, and I reserve the right to adjust it. However, in the short-term, my expectations are that the 979 price pivot area and uptrend line from 667 will cause temporary bounces in the short-term with 850-950 seeing a number of gyrations into end of year. The down move could be faster but 850-950 has such historical significance and price-volume action going back to the last recession and even the 1990s,

Regardless, when the 850 area finally breaks, that is when I think SPX will enter the heart of 3 of 3/C down slowing down near 667-741 but ultimately punching through to 550-600 at the end of wave 3 of 3/C and then reaching a final panic wave 5 of /C3 down to 450ish or 300ish in fall 2010. The subsequent bounce and drop would likely retrace much of the low as part of wave 1-2 or A-B in early 2011 before dragging higher into summer 2011 and possibly setting yet another new low to 350, 200 or lower if SPX needs to complete a 5th wave down from October 2007 rather than just an ABC.