THE ECHO BOOM

A 2007 Asian Crisis Repeat - But Potentially Worse

Gordon T Long
9/18/2013

September 2013 Edition

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THE ECHO BOOM

A 2007 Asian Crisis Repeat - But Potentially Worse

SEPTEMBER MONTHLY MARKET COMMENTARY

MARKET OVERVIEW ................................................................................................................................ 3
I- GORD'S VIEWS & OPINIONS .............................................................................................................................................................. 3
We are Within 10 months of a Multi Decade Top and Market Reversal ........................................................................................ 3
Some Things In the Near Term Are Eerily Familiar.......................................................................................................................... 3
Some Things Are Also Just Unsustainable ....................................................................................................................................... 4
A Reminder: We Still Are Operating Within a 6 Hindenburg Omen Historic Cluster.................................................................... 4
Markets Have Disconnected from All Basic Fundamental Measures ............................................................................................ 5
Margin Debt is at a Peak (Again) ........................................................................................................................................................ 6
Earnings are Falling With a Q4 "Hockey Stick" To Come ............................................................................................................... 6
Most Sentiment Indicators Are Rolling Over Again (History Tells Us to be aware of this) .......................................................... 7
CRACK-UP BOOM After the Near Term Consolidation We Still Expect new Highs .................................................................. 8
I- TARGETS................................................................................................................................................................................................. 9
II- MONTHLY ASSESSMENT ................................................................................................................................................................. 10
A - LONG TERM: Fundamentals ...................................................................................................................................................... 10
B - INTERMEDIATE TERM: Risk ..................................................................................................................................................... 12
C - SHORT TERM: Sentiment........................................................................................................................................................... 12
III - BIG PICTURE ..................................................................................................................................................................................... 14
IV - DEFINING CHARTS ......................................................................................................................................................................... 16
Defining Chart #1 - "Delusional Distortion" Expectations .............................................................................................................. 16
Defining Chart #2 - Finding the Long Term Pivot ........................................................................................................................... 18
Defining Chart #3 - Intermediate Term Top ..................................................................................................................................... 22
Defining Chart #4 - Short Term Volatility ......................................................................................................................................... 24
V- KEY ANALYTICS ................................................................................................................................................................................. 26
DRIVERS ............................................................................................................................................................................................. 26
RISK ..................................................................................................................................................................................................... 26
PATTERNS.......................................................................................................................................................................................... 29
VI - STUDIES ............................................................................................................................................................................................ 29
STUDY: Global Profit Growth Squeeze and Triffin's Paradox ...................................................................................................... 29
STUDY: Shifting Global Surprise Indices ........................................................................................................................................ 30
STUDY: Margin Credit........................................................................................................................................................................ 30
STUDY: Bond Scare........................................................................................................................................................................... 31
STUDY: Buybacks .............................................................................................................................................................................. 31
STUDY: Equity Premiums ................................................................................................................................................................. 32
COMMENTARY - THE COMING EMERGING MARKET MELTDOWN ................................................................... 34
SHOCK WAVES SHAKE BIITS .............................................................................................................................................................. 34
HITTING THE BRICS WALL ................................................................................................................................................................... 36
PERIPHERALS - A PUZZLING PREDICAMENT ................................................................................................................................. 42

September 2013 Edition

2

Copyright 2013 GordonTLong.com

Restricted
All Rights Reserved

general@GordonTLong.com