Elliott waves

The Wave Theory Elliott was discovered in late 20 's by Ralph Nelson Elliott. He discovered that the stock market does not behave chaotically but in repetitive cycles, reflecting the actions and emotions of humans and due largely to mass psychology that he sees as the main culprit.

It was partly based on the Dow theory, which also uses the waves for the study of the stock market, but Elliott discovered the stock market fractral nature (repeating the same patterns in major and minor scale), analyzing it in more detail, and after years of study, identifying appropriate patterns to make predictions.
From the 70 's it gained popularity thanks to the rises and crashes predictions made by Frost and Prechter (“Elliott Wave Principle…key to stock market profits, 1978”).

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Simiocracy, from Aleix Salo

After his famous “Españistán”, Aleix Salo delights us with a new book, and especially with a new video-comic about the economic crisis of Spain.

This time it's “Simiocracia”, that tells us the sufferings of the Spanish economy from 2008, when the housing bubble burst, so far. Enjoy the video and do not forget to review the previous: Españistán

Comparing 20 years of stocks, oil, pension plans, housing and gold

Let's look at a comparison of 20 investment products, analysing its evolution over the past 20 years, It ie from July 1990 until July 2010. The comparison is very interesting coming out as the winner the investment in oil with an annual turnover of 7,09% and as a loser investment in Japanese stock exchange with an annual loss of 5,72%. See the summary:

Emerging RV
RV Spain
RF credits USA
RV Germany
RF rental eurozone
Mixed RV pension plan
Spanish housing
RF pension plan credits
Mixed RF pension plan
RF p eurozone
Plan pension RF p
RV United Kingdom
Inflation in Spain
RV France
RV pension plan
RV Japan

Annualized data (evolution in July 1990 – July 2010)

Inflation and growth in Brazil

Recupero parte de un artículo de Luciano (aka. Elemaco) de su blog ESC, en el que se estudia el fenómeno del crecimiento sin inflación de Brasil.

Brasil experimentó, desde que asumiera Lula hace ocho años, el proceso más intenso de mejora distributiva y combate a la pobreza de su historia reciente. El Gini de Brasil cae desde 0.59 a 0.54, en una mejora incluso más fuerte a la de Argentina desde el peor momento de la crisis en 2002 hasta 2007. La pobreza e indigencia, por su parte, caen 12% y 8% respectivamente.

pobreza y índice de GINI en Brasil

The evolution of the stock market in the long term, and inflation

(Published in bolseando2 in Spanish in April 2010)

At Dshort.com have interesting graphics of long term on the S&P 500.

Let's look at the following graph indicating the evolution of the SP500 from 1870 until 2010, both in nominal value (the one that shows the index that all people can found in many websites) and in value “real”, i.e. discounting inflation, and also gives us the graphics corresponding to the value “total”, i.e. taking into account dividends received throughout those years and assuming that we reinvest them.
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ESPAÑISTAN, real estate bubble and Spanish crisis

ESPAÑISTAN, The housing bubble and the Spanish crisis in comic version, by Aleix Salo

Aleix Salo prepares the output of a comic strip set in the Spanish housing bubble and the subsequent crisis in Spain from 2008.

For its launch has created a very interesting video that illustrates the process lived in Spain, and that in 2011 It is still suffered.

Enjoy the video:


And if you want to download the video, I recommend you to follow the next instructions for download videos from firefox.

About productivity in Spain and other European countries

En Cotizalia Kike Vázquez nos deleita con un artículo sobre la productividad, que me ha gustado tanto que voy a copiarlo aquí:

No sé si le ocurrirá a todo el mundo pero a mí eso de la productividad que tanto hablan no acaba de quedarme claro. Dicen que trabajamos poco, que somos vagos, que tenemos que bajarnos el sueldo un 25% para empezar a ser competitivos o “trabajar un poquito más y cobrar un poquito menos” según otras fuentes. Vaya, ¡pues sí que somos caraduras los españoles! Menos mal que avisan porque yo hasta el día de hoy salía con toda confianza a la calle sin miedo de ser extorsionado por alguno de estos peligrosos sujetos…

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Austrian business cycle theory

I start this article by copying and pasting from the Wikipedia:

The Austrian theory of the business cycle (ATBC) was developed by economists from the Vienna school, including F.A. Hayek and L.V. Mises. It explains the relationship between bank credit, economic growth and massive investment errors that was accumulated in the bullish phase of the cycle, bursting with the bubble and destroying value.

It argues that a expansion “artificial” of the credit, i.e., not supported by previous voluntary savings, tends to increase investment, since relative prices have been distorted by the greater mass of money circulating in the economy. These investments, that had not been undertaken without the aforementioned distortion, overuse accumulated capital goods, and sooner or later the artificially low interest rates are arranged in their true level of market, usually very Continue reading

The destruction of money and the crisis

The money can be created, as I indicated, and can be destroyed. I do not mean to burn banknotes. Merely to repay a loan is a destruction of the virtual money involving own debt. If I sign a promissory note and others used this promissory note as payment, the promissory note is money. If I cancel the debt of the promissory note, the promissory note ceases to exist, the money disappears from circulation. Both money existed in the time before my payment, the promissory note and my money, and when cancelled it ceases to exist the promissory note. Destruction of money.

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The Money and money creation


Money in today's world is pretty confusing. It is not gold. It is not even a right to you receive gold. It is simply "buying power". Whether it is a paper-currency or a point in your bank account, what it represents is your purchasing power.

Why central banks are so obsessed by inflation. Its primary mission has become to get that the money in circulation remains reasonably its purchasing power. If there is high inflation, then the purchasing power of our money decreases rapidly and the money ceases to have value; and everyone is looking for an alternative, other currency, property, gold, whatever that were not loosing "purchasing power" in the market.

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Lehman Brothers bankruptcy, the second great bankruptcy of year 2008

In March was Bear Stearns. Now, in September of 2008, Lehman Brothers.

Then I wrote an article entitled “the bankruptcy of the year“, but the year was not yet over and is the turn to Lehman. In addition, Merrill Lynch has been purchased by Bank of America, It seems a covert rescue operation, as Merrill also entered the bets on the banks who were suffering most in the USA. Continue reading