Paging my favorite Polish mathematician Devac and my favorite non-Polish mathematician mike.
I exemplify "a little knowledge is a dangerous thing" and I have a little knowledge about stocks and math. Fractals are a thing I can point to on T-shirts and mousepads from the '90s; ask me to derive a Mandelbrot set and I will hum loudly and walk away. Nonetheless this sounds a lot like technical analysis (IE phrenology) to me. Which, to be fair, the least-clickbaity-of-the-three-places-I've-seen-this article suggests:
- The question concerning the credibility of such a pessimistic forecast remains open. If financial markets do not change qualitatively in the coming years, the worst-case scenario of the development of events has the chance of becoming a reality. However, one must bear in mind the significant difference between the worlds of mathematics or physics and the world of finance. Mathematical laws and models constructed within physics are effective and relatively uncomplicated, among others due to the internal simplicity and immutability of the objects they concern. Financial markets are much more complex. Their participants are changeable: they remember, they learn, they can react both logically and emotionally. There is no shortage of examples proving that when knowledge about a law with the power to forecast is disseminated among a significant number of market participants, the market changes rapidly and the detected regularity disappears. Will the same happen in the case of the impending hyper-crash?
So I'm curious as to what, exactly, they're modeling and where the dependent and independent variables lie. After all, you can apply Elliott Wave theory to a coin toss if you pick your timescale correctly after the fact.
Jargon in finance is obscurant in nature. For example: CAPE ratio = Cyclically-Adjusted Price/Earnings Ratio. Take how much the stock is, divide it by the amount of money it makes, throw a coefficient on it, get a Nobel Prize in Economics. Fundamentally there's no there there. "Derivatives" in finance are anything where you're not directly trading something. A contract to buy the stock later at a certain price is a "futures option" and also a "derivative." When they talk about "the velocity of money" that's not a derivative, that's a greek symbol used in deep macroeconomic analysis. Lehman Brothers, Long Term Capital Management, The Great Depression, it all boils down to "someone was expecting to get paid and didn't." For purposes of finance, "Joe owes me $10" is the same as "I have $10." That was the basic peril of WWI: Germany figured they could make France pay for the war once they conquered them and France was dependent on Germany paying once they lost. Meanwhile the French owed the British and the French and British owed the Americans (Lloyds of London informed Parliament in 1913 that, regretfully, should the Royal Navy sink any members of the German merchant fleet, Lloyds would have to cut checks). Prior to the actualization of assorted parties' inability to pay, all that war debt was assets. And as soon as you decide you're never going to get paid, that's a "write down." We still can't call it a loss because apparently then we have to feel bad. Worse, "being in debt" is called "leverage" in finance. A "highly-leveraged" hedge fund is a daring bunch of swashbucklers out to make lots of money without having a phatty war chest. They're also a bunch of debtors buying stocks with other people's money on the assumption they're smart and will pay the money back in spades. That's the other dumb thing - the higher your leverage, the more interest people will charge you which means the more money they make from lending you money. The riskier you act, the wealthier you get. Until you write down your margin debt and bread lines erupt on Wall Street. "Borrowing money to bet on things" is fundamentally how markets work. All the rest of it is hand-waving. And so long as people get paid back around the amounts they're expecting, it works. As soon as someone starts losing money, everyone starts losing money because it's a highly-correlated, interconnected mess. This is why I'm mostly interested in what they're modeling, not how they modeled it. It sounds like they're basically taking a number series - the S&P over time - and curve-fitting. Which is basically a selective application of order to chaos that allows you to go "look I predicted the future!" when in fact you predicted the past.
Saudi money is propping up venture capital. Venture capital is propping up tech. Tech is propping up the American economy. If/when the Saudis decide to stop for whatever reason, THAT is when it will all come crashing down. And it probably will happen at whatever point the Saudis consider an opportune point. This has been their plan all along. Why bother with conventional terrorism when you can undermine and insidiously destroy an enemy's economy from within?
Fractal on stocks was already old when I was in quant trading in 2000. It's the Fibonacci sequence of quant.. so bullshit It's data over-fitting by people with too much time, too much computer power, too much love for math, and too little skin in the game to realize how pointless they are
That ain't even the beginning of the fun. For starters, the median retirement account balance for households near retirement is $12k. Median. A grand a month. So... lose everything out of your median 401k and you've lost about 10 weeks of median expenses. But okay, we've got social security. Except we don't. Sure, SSI has been raided but that's just jiggery pokery math; fundamentally, money needs to come in so that money can go out. Assume it was "fully funded" or whatever. But that's okay, right? 'cuz wages are - ...well but we've got pensions! And retirement plans! For all the wonderful government employees! ...that are all guaranteed, right? I mean, I've been getting things in the mail that tell me that I'm entitled to 15 cents on the dollar if my pension goes into receivership... assuming there's any money left after everyone else's pension goes into receivership. But they've got the house. They can sell the house. To those... same kids that aren't getting paid and have to support half a retiree each on their wages. Mmmmyeah maybe that won't work out so great either. So let's review. They don't have any retirement funding to begin with. Social Security doesn't have enough workers to feed it. The pensions are all doomed and the only people who can purchase their assets have no money. On the plus side they don't have to move to Florida; Florida is coming to them and they won't have to worry about bugs because they're all dead. The bugs, I mean. The bugs are all dead. I totally mean the bugs.
Some financial wag or other recommended reading Hunter S. Thompson's Hell's Angels to understand the modern Trump voter. I tried. I really did. Hell's Angels is fundamentally Hunter S. Thompson slagging on everyone for not loving petty hoodlums with hygiene issues. He never gets around to the basic issue - they suck at life so they hate everyone. They're REBELS! Not losers. There's some very real sour grapes there. Your retirement fund is empty, your job is shit, everyone with two neurons to rub together has fled for the coast and oxycontin is about all the fun you have anymore but if you dedicate your free time to "owning the libs" you're not a loser, you're a REBEL.
Holy crap that's terrifying. That says most people won't be retiring. They'll have to work until they're medically unable to.For starters, the median retirement account balance for households near retirement is $12k. Median.