12 March 06

Cresting Dominant Equity Valuation Fractal Patterns Since 1998...

Is this the X/2.5X/2.5X end point for the final cresting area of the140 plus
year US  Second Grand Fractal Sequence which initiated its final accent in
the fall of 1998 ?

For the US, the long term generational macroeconomic asset valuation
fractals are in a 35 year window. - seven years beyond the 140 year 2X
1998 position.  Senescent creaking is heard all along the rickety
bad-debt ridden bamboo and plywood scaffolding that makes up the
recent 2003-2006 shoulder.

The recurrent fractal theme of X/2.5X/2.5X seems to have played out
its hand. For the Wilshire the beginning of the crest of the tidal
wave appears to have commenced between 9-17 February 1999 - closer to
the 17 February date.  Using the principles or rules of fractal
analysis previously described,  the end of the progression has its
origins in the end of preceding fractal evolution beyond the low of
Sept-October 1998.

For the Wilshire an imitating weekly fractal sequence beginning about
17 February 1999 of 10-11/26/27 weeks for a base of 61 weeks
(minus 2 for double counting). From that base a curvilinear massive
X/2.5X/2.5x weekly progression has evolved.  A 61/153/153 (the 153rd
week in the bottom of a 149-157 cup) weekly fractal progression has
occurred. Had the Fed pursued a lower interest rate policy, asset
valuations dependent on debt created money would be higher in the
US than they are currently.

Perhaps a blow-off akin to the last two month NIKKEI or DAX might have
occurred with a current hypothetical 2-3 percent Fed Funds rate. In
the time area nearing the end of the 140 plus year old Second Great
Fractal for the US economy, fractal lengths appear independent of
governmental interest rate policy; its is only the level of
overvaluation that appears dependent on that leveraging modality.

While the American consumer is finding it more and more difficult to
make ends meet with record foreclosures on real estate as a barometer
of the actual state of those forming the eroding base of debt
pyramidal scheme, Morgan Stanley's consumer index is nevertheless high
flying. Linear projections from the best Irving Fisher minds in the
economic intelligentsia, see the index sailing higher and higher on a
perpetual thermal. What does fractal analysis of the long term
valuation units of this important consumer index yield?

It is the confirmatory and matching analysis of this, other major
economic equity indices, and major individual telltale companies such
as GM that indeed makes fractal analysis so very obsessional and
compelling. For the  the Morgan Stanley consumer index $CMR, the crest
begins near the proximal portion of the integrated area under of the
curve from14 December 1998 to 27 January 1999. The proximal portion of
this area adds five months to a 11/27/24 weekly sequence for a total
first fractal base of 63 weeks. The currently weekly evolution with a
base of 63 is 63/157.5/157.5 of 157.5 weeks. Last week completed an
exact X/2.5X/2.5X curvilinear fractal growth pattern.

The Dow Transports congruently have a 63 week base with an initiating
4 week fractal 4/10-11/28/24 with an identical 63/157.5/157.5 of 157.5
completed weekly pattern.

The short term ironclad prediction remains .... unaltered...but refined.....
Further recent  analysis has clarified a very high probability fractal course
of the coming devolution.

With the complex, mechanistic, non stochastic, non linearly and
fractally behaving macro economy system, expect the unexpected.
Gary Lammert