The Terrarium

By: Erik Swarts | Wed, Feb 29, 2012
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Terrarium

Is there a better environment then a global credit crisis to replicate the arc of emotions and reflexes in the markets as credit is squeezed from one corner of the globe to the next?

It simply grows big beautiful ferns, I mean fractals - same thing.

And while the 1st wave of the crisis was home grown and materialized over the course of one year, the 2nd wave has very much taken on the same shape and proportional dislocations to the financial sector. Granted it has transpired over a longer time frame than those halcyon days of 2007, but the technical damage, momentum and performance signatures are there in plain view.

Waves of a Credit Crisis

Waves of a Credit Crisis

Waves of a Credit Crisis

Whether the time differential is the efforts of our monetary handlers perceived and new found dexterity in dealing with the tentacles of a global credit crunch the second time around, or just the consequence of a slowing financial contagion/universe - will be up to the academics and historians in the years to come. But I can attest to the similarities in sentiment, the charts and the degree of hubris now being dispensed from both traders, the financial media and central bankers themselves - in curtailing the effects of the crisis.

2006-2007 - 1st Wave SPX NYHL

2010-2012 - 2nd Wave SPX NYHL

 


 

Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

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TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/