The Boom Bust Cycle
And Asset Bubbles.

CYNK Technology... goes ballistic ... July 10th 2014.

This purported social network company with "no-assets, no-earnings, no-revenue" and just 1 employee in Belize (ref: Elliott Wave Theorist) went ballistic from a low of 6 cents a share in May 2014 to a high of $21.95 on July 10 in a manic frenzy of bidding... that's a 36,000% increase!

It seems the crazy frenzy was sparked by a wildfire of speculation spreading over the social media.

Bitcoin (BTC) Hits $1,242 ... November 29th 2013.

The Bitcoin saga is rewriting the history of booms.

A Norwegian man bought 5,000 Bitcoins for $27 in 2009 after he discovered the new digital currency while writing his thesis.

Today they would be worth $6.2 million... up a staggering 230,000%.

Bitcoin (BTC) Goes Ballistic! ... April 7th 2013.

Banking closures in Cyprus and the loss of investor and depositor savings has seen a mad rush to Bitcoin, the world's first successful digital currency... the attraction being, the "virtual" currency is presently beyond the reach of regulators and desperate financial institutions.
In September 2010, 1 BTC was worth US6.5 cents. At the start of January 2013 one Bitcoin was trading for US $13.50... but by April 7th 2013 had skyrocketed to an astonishing US$187... Up 1,285% in just 14 weeks.... US$1,000 invested in Bitcoins at 6.5 cents would now be worth $2.8 million.

Hot Stocks of 2012.

• GV.... up 824%.
  Electrical construction and real estate development.
  
  
• THLD.... up 575%.
  Pharmaceuticals.
  
  
• BDSI.... up 514%.
  Pharmaceuticals.
  
  
• RCON.... up 490%.
  Oil & Gas.
  
  
• REED.... up 433%.
  "New Age Beverages".
  
  
• MDGN.... up 420%.
  Medical Technology and Therapeutics.
  
  

Hot Stocks of 2012.

• THLD.... up 602% to 03/30/2012.
  Pharmaceuticals.
  
  
• RCON.... up 560% to 03/20/2012.
  Oil & Gas.
  
  
• CYBI.... up 520% to 04/02/2012.
  Leisure/Athletic.
  
  
• GALE.... up 340% to 03/21/2012.
  Biotech.
  
  

Hot Stocks of 2011.

• VRUS... + 468%
  
• SIMO... + 370%
  
• EGAN... +364%
  
• INHX... +302%
  
• TSTF.... +298%
  
• COOL... +263%
  
• GENE... +218%
  
• EDAC... +210%
  
• TET...... +207%
  
• MDVN... +200%
  

Gold Soars Higher.

From a low of $255.95 in January 2000 the precious metal has continued to soar... reaching a new high of $1,913.50 on August 22nd 2011... a rise of 748%.

Hot Internet IPO.

High-flying Internet stock Linkedin Corp.'s price jumps from $14.50 (April 2010) to $25 (December 2010), then lists at $45 (5/19/2011) & soars to intra-day high of $122.69 before closing for the day at $97.86... up 746% if you caught the top.

ETF Market Explodes.

Less than $100 billion was invested in Exchange Traded Funds in 2001.

In 2011 their global assets are approaching $1.5 trillion... a 1,400% increase.

Now the Bank for International Settlements and the U.S. Financial Stability Board are worried "ETFs are (unnervingly) similar to the derivatives market in sub-prime mortgages before the credit crunch in 2007" (aka The Global Financial Crisis).

Critics of ETFs believe they "are opaque, use excessive leverage, and carry severe risk"... "a market crisis is a matter of when not if", and that ETFs have underpinned soaring gold and commodity prices.

China's Rare Earth Metals go ballistic.

The price of 17 rare earth metals (nearly all of which are mined in China) goes ballistic... from $14,405 a tonne in July 2010 to $109,036 in February 2011... up almost 900% over the past year.

REMs are used in electrical devices like military hardware (smart bombs, radar, night-vision), hybrid vehicles, iPads, lasers, fiber optics, etc.

China's Real Estate Booms.

Average house prices rose 300% from 2005 to 2009 and kept climbing.

Cities on Hainin island soared 50-65% in 2009 and around 43% in 2010.

Hong Kong analyst Gillem Tulloch estimates "there are (currently) around 64 million empty apartments in China."

A Chinese government think-tank recently warned that property prices in major cities may be over valued by up to 70%.

Silver Sky Rockets.

From a low of $4.38 on October 22nd 2002 silver has sky rocketed into the stratosphere to a high of $49.75 on April 25th 2011... a rise of 1,036%.

Gold Soars.

From a low of $255.95 in January 2000 the precious metal has soared to a high of $1,538.10 on April 28th 2011... a rise of 501%.

Oil Bubbles Up.

The crude oil price has been driven up by rising turmoil in the Middle East and North Africa from a low of $36 on February 11th 2009 to $105 on March 7th 2011... a rise of 192%.

Hong Kong...
Home Prices Boom.

Hong Kong home prices are the most expensive in the world (ref: Savilles) at 11.4 times average earnings.

Prices have risen 70% since the start of 2009, and are up 230% since 2004.

Analysts believe prices may rise a further 15% in 2011 (thanks to a low interest rate of 0.5% and a currency pegged to the U.S. dollar).

Some are warning a Property Crash is inevitable and predicting a fall of at least 25-30%.

CYNK Technology Flames Out... 28th July 2014

The SEC closed trading in CYNK (a purported social network company) for 2 weeks after its mind-boggling rise of 36,000% a few weeks earlier. When trading resumed the stock's price crashed back to 20 cents... a 99% wipe-out.

The SEC was quick to warn investors not to be sucked in by false, misleading information quickly spread through social media which "presents opportunities for fraudsters" to promote "pump-and-dump" schemes.

Bitcoin (BTC) Goes Bust! ... April 11th 2013.

"Bitcoin Is No Longer a Currency" writes Mathew O'Brien in The Atlantic after the "virtual currency" soared to US$265 April 10th, then crashed to US$105, before recovering to US$180 the following day then down to US$120 again when trading was halted... down 53% intra-day.
"There's one thing it's not: a currency. It's a tech stock. The question is whether it's Pets.com or Paypal".
In September 2010, 1 BTC was worth US6.5 cents... At the start of January 2013 one Bitcoin was trading for US $13.50.

US$1,000 invested in Bitcoins at US6.5 cents would have been worth over US$4 million at the $265 peak... up 4,000%...a bubble perhaps?

Now That's A Bubble.

Courtesy Elliott Wave Financial Forecast.

Shares in DVD mail-order and video-streaming company Netflix (NASDAQ: NFLX) slumped from a high of $304.75 in July 2011 to a low of $74.25 in October 2011... down a whopping 76%.

Resources Boom Over? ...

"You've got to understand the resources boom is over. The commodity price boom is over. Anyone with half a brain knows that. Just think about this: coking coal is down from US$320 a tonne to $220 a tonne. Iron ore down from US$180 to $105 a tonne. Thermal coal down from US$220 to $80 a tonne."

... Martin Ferguson, 23rd August 2012
Australian Federal Resources Minister.

Stockton City, California USA Bankrupt...

Stockton is the largest US city ever to file for bankruptcy (6/29/2012) displacing Vallejo.

Other US cities may follow as the Global Financial Crisis squeezes finances and triggers massive cuts to Police, Fire & Health Services, & public works.

Stockton's unemployment rate is now twice the national average, while an increasing crime rate may place it in the running for "USA's murder capital".

Facebook IPO Sinks...

After launching at $38 on May 17, 2012 Facebook's share price drifted lower to close at $28.19 by May 30th... down 26%.

Angry investors launched lawsuits over the IPO which was marred by trading glitches, in one of the worst performances by a large company.

European Banks...
Drowning in Debt.

The European Banking system is currently (April 2012) estimated at over $46 trillion.

This is almost 3X EU GDP.

The IMF estimates over all leverage to be some 26:1 (i.e. at Lehman Brothers levels). Some believe it is much higher.

The EU banking system is almost 4X that of the U.S.... $46 trillion vs $12 trillion.

The European Union... too big to fail, or too big to bail?

Greek Bond-holders
Take A Haircut.

The Greek government passes a law (2/23/2012) allowing it to slash the amount it pays back to private sector bondholders by 75%.

This will affect 92% of Greece's outstanding bonds... & is about the same as Argentina's cut of 76.8% in 2005.

97% of bonds in Spain, Portugal, Italy and Belgium are also "under local law" sparking investor concerns.

"When push comes to shove, a government will always favor the interests of its domestic population over foreign creditors." ... US Portfolio Manager, Ajay Jani.

Biggest Losers of 2011.

• Greece.... -60%
  
• Egypt...... -45%
  
• Austria.... -40%
  
• Finland.... -37%
  
• Turkey..... -37%
  
• India....... -37%
  
• Hungary.. -35%
  
• Poland..... -35%
  
• Portugal... -34%
  
• Italy........ -31%
  
• Israel....... -30%
  

• RXPC..... -99%
  
• STEM..... -93%
  
• MRNA..... -92%
  
• AXN....... -91%
  
• ALIM...... -88%
  
• EK.......... -88%
  
• WEC....... -88%
  
• ERA........ -85%
  
• RIMM...... -83%
  
• FSLR....... -83%
  

American Airlines Bankrupt.

American Airlines parent AMR Corp. sought Chapter 11 protection November 28th 2011 with its share price $1.62.

Next day it traded as low as 0.23 cents... down 86%.

Investors who bought at the peak of $37.05 back in January 2007 would have experienced a wipe-out of 99.4%.

Netflix Investors Sweat.

Shares in the DVD mail-order and video-streaming company Netflix (NASDAQ: NFLX) have slumped from a high of $304.75 in July 2011 to a low of $74.25 in October 2011... down a whopping 76%.
The slump has been blamed on a subscriber exodus, a cash flow slow-down, and the high cost of entering overseas markets.

BRICs Drop Like A Stone.

The MSCI BRIC Index (Brazil, Russia, India, and China) has dropped from 52.25 on April 1st 2011 to 31.78 on October 3rd 2011... down 39%.
Hopes that Chinese cash reserves might help rescue the struggling Euro were dashed as the Chinese proved unwilling to "invest in a currency that might not exist in a few years".
So much for investor's hopes that the "emerging" nations would rescue the global economy.

Cracks In The China Commodities Boom?

September 24th 2011: The rare earths price bubble (comprising 17 minerals) may be bursting... with cerium down 48%, lanthanum down 36%, neodymium down 22% from their July highs.

Gold is down 14% since hitting $1,913 on August 22nd, and Silver is down 32% after hitting $48.48 on April 28th 2011.

Was Harry Dent right when he said recently... "Anyone who is looking at a gold and silver chart and doesn't think it's in a bubble, well they're an idiot"... "and China has got a bubble from Hell, I hate to say it."

BoA in a "Death Spiral"?

Bank of America saw its share price plummet from $52.71 on October 1st 2007 to $2.53 on March 3rd 2009 as a result of the Global Financial Crisis... a drop of 92.8%.

Now with its price still languishing around $6.30 as of August 23rd 2011, some analysts are saying its employees who have been lumbered with the stock instead of getting cash bonuses "will be using their scrip as loo (i.e. toilet) paper if the US bank continues its death spiral"... AFR 8/25/2011.

Uncle Sam Loses AAA.

The U.S. lost its AAA credit rating for the first time in history August 5th 2011 when Standard & Poors downgraded its debt to AA+ with a negative outlook.

If other rating agencies do likewise it will impact on investors who are required by mandate to only invest in AAA-rated debt and are currently holding U.S. Treasuries.

MySpace... Nobody's "Friend".

Rupert Murdoch bought MySpace for $580 million in 2005 as social media boomed. He sold out in June 2011 for a measly $35 million... a loss of 94%.

Fannie Mae. Going, Going...

Fannie May reached a peak of $67.44 in August 2007. In June 2011 it was doing a vanishing act at 0.32 cents... down an astonishing 99.53%!

Chinese Stock Fraud.

Hong Kong based software provider Longtop Financial Technologies down 58% from high last November... Citron Research alleges all financial statements from LFT are fraudulent.
Some say Chinese banks complicit in "Chinese stock fraud contagion".
(www.elliottwave.com)

US Commercial Property

Latest Moody's National Property Index of commercial values shows prices still down 44.6% from October 2007 peak... and threatening to slide lower.

The Zimbabwe 100 Trillion Dollar Bill.

Hyper-inflation forced the Zimbabwe dollar to be abandoned in 2009.

The highest denomination 100,000,000,000,000 dollar note could not even buy a bus ticket in this basket-case economy at the time.

The 100 Trillion dollar notes are currently being sold on eBay to collectors for U.S. $5 to $6.

U.S. Housing Crisis to get Worse...

A glut of foreclosed homes threatens to swamp any recovery.

Mortgage lenders currently own of over 872,000 homes.

They are in the process of foreclosing on 1 million more, & are "poised to take possession of several million more ... in the years ahead". (Eric Dash, WSJ, 5/23/2011)

Silver... a Correction?

From a high of $49.91 on April 25th, 2011 Silver dropped to a intra-day low of $33.17 on May 6th... down 33%.

Spot Silver dropped 12% in just 11 minutes on May 2nd... while Silver Futures plunged 27% in one week.

Silver bugs will be watching nervously to see if this is a correction, or whether it signals an end to the commodities boom.

The Baltic Dry Index... A Shipwreck.

The Baltic Dry Index has crashed from a high of 11,709 in May 2008 to 1,045 in February 2011... down a crippling 91%.

The BDI measures rates for chartering giant ships to carry grain, coal, iron ore, etc.

The Global Financial Crisis resulted in an excess supply of ships and reduced demand.

Current returns are less than half the U.S.$13,000-$30,000 a day required to break even.

Tokyo Electric Power Co Stock Crashes.

TEPCO stock has crashed 75% from its 52 week high of 2,500 to just 566 (a 47 year low) on 3-29-2011 after the 3-11 earthquake and tsunami wrecked 4 nuclear reactors.

Japan may be forced to nationalize the company as the reactors may take 30 years and $12 billion to scrap.

Real Estate Crash United Arab Emirates.

(House) "Prices in the UAE have declined 55% from their peak in 2008".

Dubai investment bank Rasmala estimates further falls of 25-30% meaning a "peak-to-trough" decline of 70%.

U.S. Dollar Depreciates.

The $DXY-Dollar Index has fallen from 120.00 on January 2002 down to 75.66 on March 24th 2011... i.e. depreciated 36%.

Most analysts expect the plunge to continue due to "Quantitative Easing" by the Federal Reserve (read "creating money out of thin air") and a fear of resulting hyperinflation.

Some warn the U.S. runs the risk of losing its Global Currency status which would be a dramatic "game changer" in world affairs.

PIGS Don't Fly.

The Global Financial Crisis of 2007 wreaked havoc with the economies of Portugal, Ireland, Greece and Spain (Iceland and many others).

The result: Greece has been downgraded to "junk" at Ba1 (below Egypt)... Iceland's stock-market crashed 90% and the Krona devalued by 58% in October-November 2008... 10 year Greek bonds soared to 12.32%... and Irish house prices fell over 35% with some developement sites slashed up to 75%.

The PIGS's bail-out by the European Union is still a work in progress.

U.S. Real Estate Crash.

According to the RPX Composite Index home values in 25 major American cities have fallen to their lowest level in eight years... down 34%.

Las Vegas and Phoenix lead the collapse being down over 50% from their peak.

Shanghai Composite Index.

The Shanghai Index fell from a high of 6,124 on October 16th 2007 to a low of 2,364 on July 5th 2010... a drop of 62%.