A June/July 2024 Flash Crash?

Second Fractal Nonlinearity Why did significant one day crashes occur on 19 Oct 1987 and on 6 May 2010? What news precipitated these events? The explanation of Fractal Macroeconomics is that both occurred in the terminal 2x to 2.5x window of second fractals, when nonlinear price devaluations can occur in saturated oversold markets. 1929 to 1932 occurred at the end of a US hegemonic 90 year second fractal occurring as a 36/90 year series starting in 1807. Currently, this is year 31 of a 13/31-33 year 1982 first and second fractal series and day 113-114 (for the SPX and DAX respectively) of a 56/112-140 day October 2023 first and second fractal series. The system is in the terminal 2x to 2.5x second fractal windows. For the Wilshire 25 June 2024 did not exceed its 18 June 2024 nominal peak but did serve as a secondary near peak valuation of a 8/24/22 month fractal growth series from the March 2020 low. The asset debt system is in the 2x to 2.5x time window of both the 1982 and Oct 2023 second fractal nonlinearity. Will there be an incipient (and AI propelled) flash crash? US total market cap to GDP ratio was at 192.2 % on 24 June 2024, still 7% below its 2021 199.5% peak. Since 2020 profoundly and historically aberrationally high deficit borrowing and spending (as a % of GDP) by central banks, governmental, and private sources – has produced relatively so little GDP. Expect the unexpected.

1637, 1720, 1929, 2000, 2007 and now 2024 What name will be given to the May 2024 US Peak Equity and Peak Gold in USD global asset valuation collapse?

 In the asset debt macroeconomic system what is the worst bubble element - an asset overproduction and overvaluation bubble or an unsustainable debt overproduction bubble at the consumer base of the asset-debt economic pyramid? While the two elements are closely linked, each of two might be individually assessed for comparison at peak system valuation of commodities and equities at prior asset peak valuations :1637, 1720, 1929, 2000, 2007, and now in 2024. Qualitatively of these climax years 2024 is arguably the worst of the extremes of both global overproduction and overvaluation of assets and overproduction of consumer unsustainable debt. China, the second leading economy, has a collapsing consumer owned housing market with awful inactive parameters of a declining population, falling prices and 50-100% unoccupied residentials. With the early 2020-2022 historically low US mortgage interest rates and MBS's inflating US residential valuations by 14 trillion dollars, and later in 2023 and 2024 with mortgage interest rates at 20 year highs, the global leading economy has its consumer housing prices both at historical high valuations and representing 5-6 times annual median wages for new purchases. US consumer credit card, college, and mortgage debt are at likewise historically high percentages of median wages. Vehicle repossession rates, the litmus test of the fragility of the consumer based economy, are rapidly climbing as consumers cannot pay interest and principal on car loans. And while sovereigns can print money to monetize their national debt, individual citizen consumers cannot. In May (not April) 2024, gold in USD completed a year 2000 51/128/102 month :: x/2.5x/2x peak valuation growth fractal with gold peaking at 2454.20 dollars on 20 May 2024. Gold’s monthly long term peak valuation in US dollars and the concurrent Wilshire valuation May 2024 peak suggests that May 2024 is a global valuation peak for the global asset-debt macroeconomic system. From the May 2024 gold in USD and Wilshire peak valuations, valuations of global equities, commodities, and cryptocurrencies will significantly fall from the twin bubbles of global overproduction of assets and unsustainable consumer debt loads. Sovereign debt instruments will appreciate as sovereign interest rates fall in a global recession. Tulip, South Sea, Roaring Twenties, Internet, Housing, and ??? What name will be given to the US Peak Equity and Gold in USD May 2024 global asset valuation collapse?

SPX Maximum Self-Assembly Lammert Fractal Growth: X/2.5X/2.5X :: 35/86/88 Weeks - March 2020 to 12/13 February 2024

March 2020 Peak Lammert Fractal Growth and the Great 1982 13/31-32 Year Crash From March 2020 the fractal math for the maximum time based self-assembly  fractal growth for equities is quite simple :  X/2.5X/2.5X , where X is the time length of  the First Fractal Base ending in a low valuation (30 October 2020), 2.5X is the time length of the Second Fractal ending in a low valuation (16/17 June 2022), and 2.5X is the time length of the Third Fractal ending in a peak valuation. (12/13 February 2024)

First Fractal: X: 35 weeks: 23 March 2020 to 30 October 2020 (3)/33 weeks {the first 3 weeks (3) represent preceding terminal decay} X is the time length of the First Fractal with all intervening daily/weekly valuations above the valuations of the first and last time unit (day or week) of the First Fractal Base grouping. Because growth begins in decay, the First Fractal Base X includes 3 weeks of a preceding decay series. This 3 week grouping serves as base subfractal for (3)/6/7/5 week subfractal growth series within the First Fractal Base. (see above figure) Second Fractal: 2.5X: 86 weeks 30 October 2020 to 16/17 June 2022 The Second Fractal is the most characteristic Fractal unit and is defined by an observable nonlinear gap lower low valuation between 2X and 2.5X. See the 2005 opening page of The Economic Fractalist website. This occurs between week 85 and 86. (see above figure) Third Fractal: 2.5X: 88 Weeks 16/17 June 2022 to 12/13 February 2024 The Third 88 week 2.5X Fractal was completed on 12/13 February 2024 and was concluded with a daily Lammert fractal growth series starting 27 October 2023. (below image)

The concluding 27 October 2023 self assembly growth fractal series is composed of a 16/33/26 day fractal series. In this case the Second Fractal of 33 days days determines the ideal length of the first base fractal as 13 days (33 divided by 2.5) The Third Fractal of 2X or 2 times 13 is 26 days occurring on 12 February 2024. The SPX made a new high on 12 February 2024 and ended near the low of the trading day. A hard landing is coming for the global economy with an expected global equity low valuation in January/February 2025.

The Great 1982 13/31 of 31-32 Year Second Fractal 2024-25 US Wilshire Crash

As part of a 1807 US hegemony x/2.5x/2.5x/1.5x :: 36/90/90/54 year great fractal progression with nadirs in 1842/43 and 1932, and a peak valuation in November 2021, the valuation of the US progenitor and composite Wilshire has risen with post World War II US global money/credit expansion and with initially its enormous geopolitical and manufacturing dominance. Since the Volcker US peak interest rates in 1982, the Wilshire has been propelled by money and debt expansion from both the gradual 45 year lowering of US (and global) interest rates and later from direct central bank creation and ownership of debt and 2020 MBS’s and from historically low corporate and private debt interest rates tied to near zero fed funds rates whose combined QE effect fueled the post Covid equity boom. While the US 3 month Treasury minus Ten Year Note has been inverted to a depth and monthly duration similar to the pre1929 equity crash, the SPX, ( but not the Wilshire which includes small cap equities), has peaked on 19 January 2024 to a new high. It is both the combination of end phase creation of service-based economy jobs associated with new debt creation and money dis-proportionally pouring into the SPX’s big 7 tech companies which have supported the SPX’s recent bubble peak valuation. The 1807 36 year Wilshire progenitor First Fractal ended in 1842/43. The 90 year Second Fractal peaked in 1929 and nadir-ed in 1932. The 90 year 8 July 1932 Wilshire composite Third Fractal peaked on 8 November 2021 with a 54 year 4th Fractal expected to end in 2074. The US 90 year Third Fractal and 54 year Third Fractal are composed of two interpolated sub-series: a 51 year fractal sub-series 1932 to 1982 of 10-11/22/21 years and a 1982 13/31-32/31-32/18-20 year fractal series ending in 2074. The graphs below show the quarterly fractal progression from 1982 of 49/120 of 123-5 quarters.

The monthly progression from March 2020 is 8-9/21/20 of 20-21/12-13 months :: x/2.5x/2.5x/1.5-1.6x

NEW TARGET FOR GLOBAL CRASH LOW: 8 DECEMBER 2023

US long term debt instruments reached an inter-day low of 0.4 pc on 9 March 2020 and have risen to a high of 4.997 pc on 23 October 2023. The US central bank is simply allowing supply and demand market forces to apply QT to an overheated economy fueled by printed money, 2 plus trillion dollars of covid savings, and covid forbearance of payments on US MBS related mortgages and US-lended college debt. Covid savings and easy forbearances on debt payments are expiring or have expired. Outstanding credit card debt, subprime automobile debt, and student loan debt make it difficult for further private debt expansion for the masses in the US consumer based economy. The current fractal pattern of the US Ten Year Note interest rates, in conjunction with the monthly, weekly, and daily fractal patterns of global equity, gold, commodity, and cryptocurrencies provide predictive guidance for the 2023 interim crash low for the non-debt asset entities. After completing a March 2020, 7/16/17 month :: x/2-2.5x/2-2.5x fractal growth series, US Ten Year interest rates have self ordered into an observable 2/4/4 month fractal growth pattern. On a weekly basis this 2/4/4 month growth fractal is composed of two fractal series: 5/12/7 weeks :: x/2.5x/1.5x and 3/8/3 of 6 weeks :: x/2.5x/2x. The daily fractal series from 5 April 2023 is 21/52/32 days correlating to the 5/12/7 week fractal series and 14/32/ 11 of 25 to 26 days correlating to the 3/8/3 of 6 week fractal growth series. The daily fractal series for US Ten Year Note interest rates are depicted in the image below.

The beginning nadir month of a monthly fractal series contains 4 weeks in it and the beginning nadir week of a weekly fractal series contains 5 days which must be added to the daily subfractal (1) series. For the SPX , 5 down days in the first weekly is added to the 52 day 13 March 2023 to 24 May 2023 subfractal (1) for a total of 56 days {56 vice 57 days because the fifth day of the 5 days contained in the first week down is same as the first day of the subsequent 52 day subfractal(1) series). 8 December 2023 would complete a 56/139 day :: x/2-2.5x subfractal(1) and subfractal (2)series. If the final lower high for the US Ten year note was on day 26 of a 14/32/26 day series 11 December 2023, would complete a 56/140 day series. Bitcoin in USD final daily series(trading 7 days a week) appears to be self-assembled into an 11 October 2023 10/25/25 day fractal series ending on 8 December 2023. Ford is appears to be self-ordered as a 24 May 2023 19/47/47/14 of 28 to 29 day :: x/2.5x/2.5x/1.5x fractal series ending 8 December or 11 December 2023.

New Target Date for November 2023 crash low: 29 November 2023 day 130 of a 13 March 2023 52/130 day :: x/2.5x fractal series

The 14 day valuation gain from the 27 October 2023 low was unexpected but within the 13 March 2023 52 /104 to 130 day :: x/2x-2.5x nonlinear window. Qualitatively, the dominant service sector US economy has an operational consumer population that has no savings and has the highest ever collective debt at the highest interest rates in over 15 years. The consumer is tapped out. The Chinese economy whose base population savings is in real estate has a different, but real problem with the collapse of property and real estate prices and a collapse of stock valuations of the large corporations, e.g., Evergrande and Country Garden who build residential properties and are currently defaulting on interest debt payments. With collapsing Chinese property values (and equivalent savings), decreased foreign consumption demand because of foreign consumer debt load, and decreased domestic demand because of lost savings, the Chinese economy is near the threshold of significant retrenchment. The Bank of Shanghai, a proxy for the Chinese macroeconomic system, appears to be following a July 2021 35/85 of 87/70 week :: x/2.5x/2x fractal decay series with a subfractal (2) 87 week expected low at the end of November 2023. The 13 March 2023 to 29 November 2023 52/121 of 130 day :: x/2.5sx fractal series is depicted below with the current 14 day gain part of a 26 September 2023 7/18/14/1 of 10 day fractal decay series.

Lammert Saturation Asset-Debt Macroeconomics: The Current November 2023 Crash Low Valuation for … the Wilshire Composite, the Bank of Shanghai, Oil, Gold, and Crypto is … 21 November 2023

All of the above asset classes - and the inverse for sovereign debt interests, i.e., interest rates have a major interim low ending 21 November 2023. Will the crash devaluation for the above assets be 5, 10, 15, 20, 25%. or more from their current Sunday 12 November 2023 valuations? Time will tell. The Bank of Shanghai should have a 25-30 percent loss from its current valuation. The asset-debt macroeconomic system, a product of human transaction self-orders the timing of its asset classes’ peak and secondary peak high and nadir low valuations and does in a mathematical fractal pattern just as the universe self orders its parts into structures at different size and time scales: with interaction of subatomic wave-particles; atomic elements; complex molecular organic chemicals; living cells, organelles and tissue within organisms; planetary, comet, and debris interactions within star systems, those systems and black holes within galaxies, and galaxies within the universe. Underlying the self-assembly of the subcomponents within the size and time scales are the observed elegantly simple mathematical relationships and constants that allow reasonable predictions to be made about the past, ongoing and future interactions at the particular scale. And so, for buying and selling human transactions of the Asset-Debt Macroeconomic System, more recently strongly influenced by central bank broad QE and QT, elegantly simple mathematical time-based fractal patterns are observed for the system’s self ordering of its asset classes high and nadir valuations. There are only two time-based self-ordering fractal patterns: a three phase fractal pattern of x/2-2.5x/1.5-2.5x and a 4 phase fractal pattern of x/2-2.5x/2-2.5x/1.5-1.6x. Subfractal (3) 2-2.5x of the 4 phase fractal pattern can be a peak valuation in an asset=debt system whose worth is expanding such as the subfractal (3) 90 year peak valuation on 8 November 2021 of a US 1807 36/90/90/54 :: x/2.5x/2.5x/1.5 or it can be a low in system which is undergoing fractal decay which is the current Nov 2023 case with severe QT following in March 2022 after unprecedented QE in 2020. Using quantum time based fractal progression using the two elegantly simple fractal laws of the asset-debt macroeconomic system listed above, the interim crash low for the Wilshire Composite, the Bank of Shanghai, Oil, Gold, and Crypto is predicted to be 21 November 2023 while the interim low long term sovereign interest rate(higher valuations for previously purchased US Notes and Bonds) is predicted to be 21 November 2023. The below asset class images and their observed and predicted fractal time progression speak for themselves.