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Generational Dynamics Web Log for 10-Aug-2011
10-Aug-11 World View -- Wall Street crashes upward

Web Log - August, 2011

10-Aug-11 World View -- Wall Street crashes upward

China and the anticipated commodities collapse

This morning's key headlines from GenerationalDynamics.com.

I apologize to my readers that I've been flat out busy and am getting way behind on answering my e-mail. If something is urgent, please indicate so in the subject line, or you might try posting your question in the Generational Dynamics forum.

Wall Street crashes upward, recovering most of Monday's loss

Wall Street's wild ride on Tuesday, 9-Aug-2011

Wall Street's wild ride on Tuesday, 9-Aug-2011

Monday's frowns were turned upside on Tuesday, as champagne corks were popped. Monday's 6% point fall in stock prices partially offset by a 5% surge on Tuesday. This is the other side of the coin from a panic. From the point of view of Generational Dynamics, the issue on days like this in not whether stocks are going up or down, but whether investors are exhibiting behavior that could lead to a full scale panic and crash. In this case, the market turned negative after a Fed report said that the the chances of a recession had increased. But then, investors apparently realized that they could interpreted this as the usual "bad news is good news" reaction, because if there's a reduction, the presumably the Fed will have to start a new quantitative easing program, which will pour new liquidity into the banks and stock market. However, by the Law of Diminishing Returns, it's very likely that a new program of this type will have even less effect than the last one.

China and the anticipated commodities collapse

With the slowdown in the economies of America and Europe, China's export-led economy is also going to face a slowdown. Since 2008, China has responded to the financial crisis by enormous direct government spending and by stimulating growth of a massive credit bubble that dwarfs America's credit bubble of the mid-2000s decade. One highly visible consequence has been a staggering real estate bubble that has created empty ghost cities across the country, and enough office space to provide a 5x5 cubicle for every man, woman and child in China. Thanks to the Law of Diminishing Returns, it's going to be much more difficult this time for China, and the government won't be able to prevent a substantial slowdown. This will cause world commodity prices to fall severely, and also cause social unrest. Seeking Alpha

N. Korea reportedly attempting to assassinate S. Korean defense minister

Intelligence sources are reporting that N. Korea has send a number of would-be assassins to Seoul to kill South Korean Defense Minister Kim Kwan-jin. Kim took office in December, shortly after the North Koreans shelled Yeonpyeong Island, killing four South Koreans. Kim has taken a tough stance on North Korea for its provocations, and has called on South Korean forces to respond immediately if there's a new provocation. North Korea has called Kim an "anti-North Korea confrontation maniac" and a "traitor." Yonhap (Seoul)

Turkey's foreign minister visits Syria's president Assad

Bashar al-Assad and Ahmet Davutoglu in Damascus on Tuesday (Zaman)

Bashar al-Assad and Ahmet Davutoglu in Damascus on Tuesday (Zaman)

Turkey's Foreign Minister Ahmet Davutoglu had six-hours of talks with Syrian President Bashar al-Assad in Damascus on Tuesday. Davutoglu had been sent to Syria by Prime Minister Recep Tayyip Erdogan because "his patience was running out" over the massacres that Assad's regime continues to conduct against innocent civilians. It was thought that Davutoglu would threaten military action, but if that happened on Tuesday, there's no sign of it. Zaman

Israel deploys drones to protect gas fields from Hezbollah

As we've been reporting, Lebanon is planning a United Nations challenge of Israel's right to drill for oil and gas in the Mediterranean, claiming that the drilling is occurring in a maritime region in Lebanon's Exclusive Economic Zone (EEZ). The Israeli Air Force (IAF) is deploying unmanned aerial vehicles after Hizbollah deputy chief Naim Qassem said that Lebanon "will remain vigilant in order to regain its full rights, whatever it takes." Jerusalem Post

Rioting in Britain begins to recede

People hold up their brooms at riot cleanup on Tuesday morning

People hold up their brooms at riot cleanup on Tuesday morning

A request on Twitter and other social media quickly went viral on Tuesday morning, and large numbers of people turned out with their brooms to help repair the damage caused by Monday night's violence. The Twitter account gained over 70,000 followers in 13 hours. Metro (London)

Thanks to massive police presence in London, the city remained largely quiet on Tuesday evening, with only sporadic violence on the fourth night of rioting. However, disturbances have been seen in Manchester, Salford, Wolverhampton, Nottingham, Leicester and Birmingham with shops being looted and set alight. BBC

Notably, boroughs where Indians or Indian-origin people are largely settled have been relatively peaceful. West London suburbs of Southall and Hounslow, Harrow and Wembley in the north-west and Leicester in the East Midlands of England did not report any violence. Times of India

(Comments: For reader comments, questions and discussion, see the 10-Aug-11 World View -- Wall Street crashes upward thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Aug-2011) Permanent Link
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Generational Dynamics Web Log for 10-Aug-2011 10-Aug-11 World View -- Wall Street crashes upward

Wall Street crashes upward, recovering most of Monday's loss

China and the anticipated commodities collapse

N. Korea reportedly attempting to assassinate S. Korean defense minister

Turkey's foreign minister visits Syria's president Assad

Israel deploys drones to protect gas fields from Hezbollah

Rioting in Britain begins to recede

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Generational Dynamics Web Log for 10-Aug-2011
10-Aug-11 World View -- Wall Street crashes upward