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Authored by John Kay, originally posted at Project Syndicate,
More than a half-century ago, John Kenneth Galbraith presented a definitive depiction of the Wall Street Crash of 1929 in a slim, elegantly written volume. Embezzlement, Galbraith observed, …
A few days ago a viewed a video on the crash of 1929 (posted above). In the movie one prominent banker broke from the ranks and issued a warning 6 months prior to the crash. He was ridiculed and scorned. He took steps to protect his bank. After the crash, not only was he never thanked but he became depressed that though steps could have been taken to ease the crash, none were and much suffering followed.
I have notice how the MSM and even alternative writers studiously avoid the FEB of the FED.
Those who know financial planning know of the rule of 100. This rule of thumb says that your age is the amount that should be in guaranteed investments (GIs). (such as GICs/CDs and Tbills or savings accounts back by govt guarantee)
AS an example at age 65, 65% should be in GIs and 35% in equities . This was fine when the 65% earned a safe 5% interest. So a pensioner with 1,000,000 would have 650,000*.05=$32,500 income from GIs, other pension income and 35% for growth.
When the FED began its FEB it forced rates to zero for GIs, Now pensioners and savers earned ZERO. This "rubbery" or FEB -to support of the FED's owners (the Banksters) continued from 2009 to 20....
Ten years of 5 percent is 1.629 on the $650,000 goes to $1,058,780 or $408,781 or "rubbery".
This money doesn't come back. The decade of impoverishment or "fembezzlement" is gone and in the pockets of the CEOs of banksters.
Yet each year electricity bills rose, and food bills rose, and heating cost rose, and gas prices and cars bills rose, and taxes rose. And each year the pensioner had to dip into the capital saved over a lifetime to pay the bills.
And the FED and banksters laughed jingling the keys to your bank account and the gold in their pockets.
Mammon knows no morals.
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fembezzlement was coined by Charlie Munger (see article link in prior post)
A trader can use market reversal signals from the Polarized Fractal Efficiency, or PFE, indicator to create a basic trading strategy that is implemented with one additional, confirming technical indicator. The PFE indicator is designed to measure the efficiency of price movement. It is based on the fundamental axiom of geometry that the most efficient movement, in this case the movement of price, is linear movement. Therefore, it accords price movement in a more linear, as opposed to up and down, movement as indicating a stronger, more definitive trend. PFE values range from -100 to +100, in reference to a zero line that differentiates positive and negative values.
A common forex trading strategy employed with the PFE uses the indicator to anticipate trend changes. The theory behind the strategy is that once the PFE reading shows maximum efficiency of price movement with readings near +100 or -100, the movement or momentum of price is likely to deteriorate and subsequently reverse. A complementary indicator that is also often used to anticipate trend change or market retracement is the moving average convergence divergence MACD.
The following is a trading strategy that uses the PFE in conjunction with the MACD to provide trading signals for a market reversal trade:
The trade signal is a PFE reading greater than +90 or -90.
The trade is only entered if at the same time the PFE shows the required extreme reading and the MACD shows divergence from price by turning in the opposite direction of the existing trend.
Provided both trade entry conditions are met, a trade is initiated in the opposite direction of the trend, selling in an existing uptrend or buying in an existing downtrend.
The initial profit target is the price that represents a 35% retracement of the trend.
An initial stop-loss order is placed 50 pips from the trade entry price.
Not true Robert, many learn with caring coaches encouragement and with joy.
-however - those at the top who cause the pain and suffering are not the ones who pay the price.
If you watch the movie, you will see that the bankers knew what they were doing and were manipulating prices.
Those in power knew they were cheating and robbing.
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The pain and suffering of the next crash will hurt millions who are poor now.
They don't have enough to make ends meet.
Several work two low-paying jobs
Some grew up in slums with lead paint.
Many are hungry.
Many are homeless.
Great pain and suffering will be caused by the fat rich ugly decadent who care not the pain they cause.
Janet suggested to the poor to get rich
My grandparents lived through the depression. I looked up to all of them as pillars of strength, not with pity for which they suffered. Each of them taught me a lot about living without. My grandfather had the worst of it. He lost two brothers to starvation and lost what few things he had in the flood of 37. But he said he would not change a thing. He told me through the hardships of the depression came greatness and strength. Through that strength, he said, we kept a dictator at bay and kept him from killing millions more. We built monuments to the world and showed that we as a nation can prevail under any circumstance.
yes, those at the top may not have suffered but their dark deeds are overshadowed by the lessons learned from the hardship which were overcome by the masses.
I am very pleased your grandfather had the personal strength to go through it and to take strength from hardship.
(I am not clear how your grandfather linked this to the war and the dictator - but without the depression and then hyperinflation it is unlikely - from what I know of history - Hitler would have been able to galvanize the Germans to accept Nazism, that is the war may not have happened without the crash).
My concern is that we lose compassion for those who cannot help themselves and a second concern is that we not strengthen evil. The rich made money from creating the bubble of 1929, they made money from the crash and they made money from depression and they made more money from the war and terror and killing.
I think there is a better way to move the world forward rather than through crushing the weak and climbing upon their backs to make ones money. However all this digresses from the theme of trading and I ask that further discussion should be elsewhere.
I am glad you found use of the ATR calculation for stop distance estimation and are one of the few who understood the importance of the calculation. To keep this more on trading I will pose a question for your thoughts.
Shortly after the ATR stop calculation post I was thinking of a particular day and the relationship of trend steepness and of retracement.
As a very general observation when a new sharp intraday downtrend starts, there is an initial plunge of quite a steep slope then a pause and retracement (usually short-lived) and then a second down leg, not quite as steep as the first plunge, a retracement (which lasts a little longer and retraces slightly higher as a percentage of the decline than the first, and then a strong wash-out plunge.
I was thinking that perhaps through examination of the:
steepness and length of plunge one,
the ratio and slope of retracement one (so this includes time),
the steepness and length of plunge two,
the ratio and slope of retracement two,
and the final wash-out,
that a mathematical formula could be derived to give estimates of each.
