The divergence continues, stock market still advancing against the worst economic conditions in the last thirty years
Alan Hershey
Apr. 28, 2007

The parallel with 1929 are clear. The market’s resilience is just part of mega bubble in stocks. The economy never experienced the bursting of four bubbles at the same time. Real estate, stocks, commodities, and foreign currency bubbles after their collapse are going to drag the economy to levels never imagined before.

Mortgage defaults are rising. Credit card companies are raising interest rates from 15% to 29,99% with no notice and with no reasons. The Federal Reserve is sitting and watching.

The foreclosures and personal as well as business bankruptcies have skyrocketed. The deflation is in full control. The effect of deflation is manifested through the skyrocketing personal loans to maintain the standard of living. All on a sudden it will be all over. The rich are already looking for safe heaven in Canada, Europe, and Australia. They need a safe heaven by 2008.

The biggest problem is in the real estate market. No one can imagine that a bubble has just fed another little bubble. People who lost hundreds of thousands of dollars are looking for new homes again. The double bubble syndrome is like a pendulum attached to another pendulum. The double pendulum, when let go, becomes uncontrollable. There are mathematical models to understand its motion. There is no mathematics that can cure the economy and the stock market now. When the stock market bubble finally collapses, it will be a dramatic drop. There will be exodus out of the country into safe heavens.

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The divergence continues, stock market still advancing against the worst economic conditions in the last thirty years
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The double pendulum, when let go becomes, uncontrollable. There are mathematical models to understand its motion. There is no mathematics that can cure the economy and the stock market now.
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