Thursday 31Jan2013 - What Next?

From Danielle Park's Juggling Dynamite web site.

"In fact this pattern is typical of financial bubbles and their aftermath. The secular bear periods that follow a valuation bubble take an average of 17 years to grind out the bubble excesses and finally present exceptional investment value. We saw a similar pattern in stock markets after 1929 and pretty much every other secular bear period that followed every secular market top in history. This includes most recent examples of Japanese real estate and stocks since 1989, and technology stocks since 1999. In 2000, broad stock markets also began the necessary process down from their bubble peak. But over the past couple of years, this natural correcting process have been stalled in a detour of government bailouts that have temporarily supported insolvent institutions and by central banks tinkering in experiments of monetary theory. 13 years into the present secular bear in stocks we see historically familiar trends playing out in Chinese stock prices as well as commodity and resource shares since they peaked with the credit bubble in 2008. Combined on one chart, we can also get a sense of the dramatic price risk now teetering over unsuspecting crowds in overbought US stock markets."