Oct - emailed to subscribers - Fri, 07 Oct 2005

It's all about those govt granted licenses:
John will have to ask Kerry and Rupert first on this one.

Crystal-balling for 2009 and oil, I have heard reports, not yet verified, that PDVSA, the Venezualan state oil company has discovered 4 billion sq ft of natural gas in the western part of that country and is reporting that it now possesses the largest single reserve of oil in the world. If true, there is something to watch. A left leaning pollie has never yet been permitted to control such resource wealth in that area of the world. It is all about rent and resource security. So when a right wing religious nut preacher compares Chavez to Saddam and says he too ought to be assassinated, (Reverend Pat Robertson did later apologise for the comment) perhaps the US public is being 'prepared'... Then again, perhaps God might talk again to Bush to give instructions to invade there as well. (See today's news)

Greenspan has warned in a study (one of his own actually, only the 2nd time he has done one) that US consumers have become enormously dependent on borrowing against their own homes to fuel spending. (Now posted on the Fed website.)
Are we on borrowed time ? Not that I think the Doc knows much. There is a great quote of one of his earlier efforts which I am sure he'd rather forget, in the 1989 chapter. (forthcoming) Reserve bankers know very little about what causes the real estate cycle. In fact let me rephrase that, they know sweet f.a. Remember that as we go from boom to bust, they will deny at first that it is happening, then say that it will be just a soft landing.

Here is yet something else that says you can get an idea of what will happen next year, by studying the years 5, 10, 20, 30, 40 60 and 90 years back - emphasis more on the squares and trines however


note the repeat at an almost 90 year interval, and incedible (to me) that it is now discovered to have been a bird flu, and what have we now... bird flu danger. Gold and oil WILL have emotional years, between 2008 - 2010, therefore things in the world have to happen to make that happen. One day, when enough people stop fighting one another, we might spend some time on how to discover how to remember the future.

crowd behaviour when we do go to bust:
this will repeat also, but in different ways sort of

Osama bin Latham gave ten reasons why you shouldn't go into politics. This is the only thing of his I have read, but gosh it was good. "Politics is controlled by vested interests" he said. Speaking as one whose first meeting as the newly appointed opposition leader was with News Ltd and the Murdochs, he ought to know.

Remember we were told after 9/11 no-one had any warning of such a possibility

and still a good deal of the report is 'blacked out' - don't they trust us ?

and finally, for your interest:

might take a minute to load, worth the wait, and I bet you, you replay it, but I cannot vouch for its authenticity, however (thanks to another sub for alerting me) most of you already know I don't believe the Pentagon was hit by a Boeing Jetliner, it was something else, but this is just my simple opinion

The Chinese Govt launches a new offensive to control 'news' for its citizens, with all website news now having to be cleared by govt first... As always, the centralization of power and its need to control, is a netizen's (and the world's) foremost problem. It will be interesting to see who or what they blame when China experiences its first land price induced recession. Social turmoil is inevitable when this occurs. Meanwhile... back to the present:
The Financial Times reports that early next year, Shanghai starts work on the Shanghai Star, to be the worlds biggest ferris wheel (need I say more) due for completion 2008 next to the Huangpo river, central Shanghai. Affluent Chinese business persons are being 'invited' to contribute US$100 000 per year for entry to a private members club to be located inside the wheel. The club will be the most expensive club in China, and is being organised by Zhejiang Huamen, the property company (who else ?) behind the whole scheme. Shanghai has the 2010 expo, and engineers are already busy in the city building the worlds tallest building, and longest suspension bridge.

Only ever at the top....

To some stock comments: If you are trading all time new highs, you should not normally have to worry about what the general market is doing. So it was nice to have some avo in the back pocket as the market tanked 95 points. Note that the break into all time highs happened before the news, (obviously no one knew what was coming) so you had plenty of time to think about buying in. More upside left in that one yet too most likely. Such news often comes in threes.

ext , the same, though with that news (60 deg from prev high) there was little profit in that one.

Now, when mkts have a day or two like this week, watch the stocks that do not move down. These lead the next move up. (recent buyers are not selling.) The other stocks, like energy stocks, now have to have their mid point retracement, then from there they will retrace back up, mid point to mid point, then go sideways for 6 months awaiting further direction. These ones you would avoid. (tho trading mid point to mid point can be done) As ever, watch the new highs list and allow the market to tell you which ones are moving.

One final thing
cycles indicate 2009 / 10 as depressed business years, leading to a real estate low. To get there, stock markets will have to have an ability to repeat a range on the downside, therefore we are going to need to see the beginnings of some larger ranges happen, so that the market will be able to repeat these numbers into the low. That is what you are starting to see now, the beginning of these larger runs, numbers and ranges. A wild ride is coming in my view. But not yet. I think the market needs to put in some decent lows (but being mid point retracements of the uprange) so that people get into the habit again of buying the dips, so that when the big one comes that isn't a dip, we are all in, if you know what I mean. Also, as markets go higher, with bigger numbers, the distance a market has to travel to get back to key natural support and resistance levels gets wider. Gann's square of nine shows you this.

Lastly, Gann's theories did give three dates to watch this year, as periods of major volatility, first week May, August 5/8, and October 10 - 15. (As some would know, I was anticipating them as lows for the year, the market actually inverted and we continued higher, so the help on this one for trading was zilch, nevertheless, the dates have been pretty good.)

and I have to add one more thing on today's news: (link may not remain active long)

Another inquest into the Calvi murder in London. The first one ruled suicide - utterly preposterous if you have ever seen where and how he was found dead. If you read parts of my 1974 chapter links, Calvi had a lot to do with Michele Sindona, whose corrupt actions (and Mafia links) totally destroyed Franklin National Bank (the land price collapse finally put the bank out of its misery) and brought the US banking system to the very brink of collapse in 1974. If you are interested in a bit of conspiracy, read Yallop's /In God's Name/, extensively documenting how Pope John-Paul I was most likely poisoned, how several insiders stole stacks of Lira out of the Vatican bank, that bank's links to the Mafia, links to the Italian Masons, and how money was funnelled by the Church to the Polish solidarity movement, thru Calvi's banks, to fight Communism. (And you thought Lech Walensa did it all on his lonesome.) It all started with God's Banker, Roberto Calvi. Both he and Sindona (and a number of senior bank personnel) died in mysterious circumstances. All were clearly silenced to stop them talking. Calvi, to his eternal regret, most likely lost a good deal of Mafia money through his bank. This was probably not a life prolonging thing to do.
Great read.

I can forecast for you with absolute confidence that with the next land price induced downturn, a few banks will fail, some of which, it will be found later, invested in shady deals and shadowy figures. This time it will most likely be war or oil related. The government will launch an enquiry, the findings of which will be a white-wash. By that time the cycle will have turned, and it will be back to business as usual. Especially for the banks. This cannot change whilst the rent of government granted licenses and privileges is permitted to capitalise into a tradable value. You know the story.

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