Economic and Astrological principles and assessments guiding SOMC's philosophies and perspectives.

10/24   0700:  The bubble bursting deflationary pressures are too big, so far, to be contained.  As an optimist, I have maintained hope that the world would have one more round of reflation/inflation.  The damage being done by the deflationary flood now in progress is enormous, and not easily repaired, if reparable at all.  The severe recession (depression) that somc looked for by 2011-2012 is happening now, unraveling occurring over an extended period of time.  The Central Banks have tried to reflate and failed, so far.  Greed became manic, contagious and all-pervasive.  And that happens in all classic manias. 

10/23  0700:  somc macroeconomic perspective. Buy and hold ended in the 1990's as a successful investment strategy.  In mid-1997 the spx first hit 900.  Then the Tech bubble gave way to a bust. Given a 3% inflation rate, that price is now 1210--just to break even, meaning that the spx's effective purchasing power has declined 30+% in the last 10 years.  The 2000 to 2002 sharp decline was the initial phase of a generational Bear Market.  The 2003 to 2007 rally was a Bear market speculative/leveraging/bubble rally.  The 2007 to and/or through 2012 is likely to carry global stocks lower than they are right now, in a serious global recession. The simultaneous losses in the housing, commodity and leveraging markets has moved the effect of the imminent demographic decline to the present time.  Multi-trillions of paper assests have vanished, never to return.  That effect is just now beginning to be felt. 

10/21   0600:  Earnings season has almost been forgotten--some hits and some misses, even with the significantly lowered expectations.  Most important at the moment is the Libor rate.  It has been easing over the last week, and that is critical.  The Libor controls the rate of over 300 trillion dollars of debt throughout the world (dwarfing the US and Central Banks bailout funds).  COMPARE A 300 FOOT TSUNAMI WITH A 3 FOOT DIKE (combined 3 trillion in global bailout plans).  The Libor rate at present is a direct measure of trust vs fear between banks and clients, and its easing signals more trust and is favorable for the Bear market rally we are experiencing. 
     somc's longer term outlook has forecast global deflation entrenched by 2012, with local scarcity and currency devaluations pressuring prices in individual countries (possible local hyperinflation--the yin and the yang at extremes can flip, like dry ice feeling hot to the touch).  The demographics of the leading nations of the world are decidedly deflationary; the US, Europe, Japan, Russia, and a few years later even China, are aging.  Their peak purchasing/spending power is now, and not to be seen again for many years.  Increasingly there will be two classes: the working poor versus those with an abundance of assets.  somc maintains that the Central banks can reflate one more time.  If they are successful it will not create a boom, just prevent a bust, for awhile--it will buy time.... somc will comment more on this later in another section.
    When the first stimulus package was introduced, somc wrote that it would have no effect.  The same applies to the second, if/when it is passed.  They both add debt, without fundamental impact.  And what is one hundred billion versus 300 trillion...
      

4/05/08:  1255:  On the US Election:  Barack Obama has the best aspects into and through the election;  and he is, for the US, the most helpful candidate, nationally and internationally.  It is my assessment that Obama will be the next President of the United States.