• 399 days Will The ECB Continue To Hike Rates?
  • 399 days Forbes: Aramco Remains Largest Company In The Middle East
  • 401 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 801 days Could Crypto Overtake Traditional Investment?
  • 806 days Americans Still Quitting Jobs At Record Pace
  • 808 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 811 days Is The Dollar Too Strong?
  • 811 days Big Tech Disappoints Investors on Earnings Calls
  • 812 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 814 days China Is Quietly Trying To Distance Itself From Russia
  • 814 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 818 days Crypto Investors Won Big In 2021
  • 818 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 819 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 821 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 822 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 825 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 826 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 826 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 828 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

CNBC SquawkBox Europe

October 10, 2008

The last time on CNBC was October 1st and I said it didn't matter if the bail out bill was passed or not -- the index was in the last leg down in a bear campaign and would not end until it got below 1020. The index was in the process of capitulating down and would not end until the 15th plus or minus two days. What is going on is not abnormal.


I've been reporting there were two roadmaps this index is following and when this bear trend is complete it will resemble something between the 1969/1970 bear campaign or the 1973/1974 campaign. This bear campaign 1969/1970 gave up 37%. Keep this chart in mind.


The last leg down was a whopping 37% (the equivalent of 828) and the entire trend gave up 47% of the high price. The last leg was also a 75% extension of the trend. There was retest of the low 9 weeks later. Please keep this chart in mind.


This is the last leg down which is easy to see when viewing the two previous charts. The window in price is between a 37% decline and a 47% decline. With a measurement from 1974 at a 75% extension as a possible low. We don't have enough time on the show to explain how I've calculated the time factor for early next week but it is just a repeat of the past. Here are some very important caveats related to "time." If the index has found a low yesterday and rallies up into Tuesday and turns down it could indicate the low will extend out to the 28th. But for now I'm staying with the forecast of the low for the bear campaign Monday or just a few days more. At a price of 880, 823 or even 780. Mutual funds saw 36 billion in redemptions yesterday, the entire month of September saw only 15 billion. There is now forced liquidation going on and that is how lows are made.

As I've been saying on this show for a year the fundamental reason for this crisis are exactly the same as 1929, exactly the same. Securitization of debt occurred in the late 1920s exactly as it occurred in this decade-exactly. The reason we have these problems congress allow the banks to underwrite securities and their greed for underwriting profits caused them to lower lending standards and created the toxic securities that are now burying the financial system. No matter how much they want to change history with propaganda that is the reason for the crisis. And everything the Federal Reserve and ECB have down so far is only making the situation worse. In fact the actions of the Federal Reserve & Treasury are nothing short of stupid and that is sugar coating my words.


Back to homepage

Leave a comment

Leave a comment