CRASH2: When 16, 6 & 3 are added together, then you’ll know to head for the silo


(It is the work of the Devil, I tell you)

There are three numbers at the moment no trader wants to see the bourses go below: 16k (the Dow) 6k (the FTSE) and 3K (the Shanghai composite). Slowly, exhaustingly but inexorably they’ve been dropping towards 150 or so  points of those ‘psychological’ levels. 16 + 6 + 3 = 25.

According to the Shapiro Inequality, 25 is the least odd integer n such that there exist x_1, x_2, \dots, x_n such that

\sum_{i=1}^{n} \frac{x_i}{x_{i+1}+x_{i+2}} < \frac{n}{2}

where x_{n+1}=x_1, x_{n+2}=x_2.

Sixties pop singer Helen Shapiro had her first hit when she was sixteen. She had six hits in all. She has three children. That equals 25 as well. OMG. What’s more, in Ezekiel’s vision of a new temple, the number 25 is of cardinal importance in Ezekiel’s Temple Vision (in the Bible, Ezekiel chapters 40-48). Ooowerr.

There’s more still: 25 is the smallest square that is also a sum of two (non-zero) squares, 5×5. This can only mean one thing….it’s a zero-sum game, and Ezekial’s circle is about to be squared by a factor of 5: all stock markets will drop by 80%.

You read it here first.

You might as well follow that sort of Knights Templar thinking, because none of the markets reflect anything: that’s right – they have no reflection in the mirror. They are the agents of Lord Beelzebub, and only a gross of font-water soaked crucifixes can turn them to dust. Well, that and events.

The only equation you need to solve is this: how long can manipulation stay sentiment before panic turns correction into catastrophe? As nobody has the answer to that one (least of all Janet Yellen, the Beijing politburo, George Osborne or Mario Draghi) the smart move as of two weeks ago was GTF out.

But if you’re still banking on normality being round that infinite corner where the shoots turn green and you can fly to the sun at night when it’s cooler, here are some further symptoms of terminal cancer to observe….

S&P issued this press release yesterday:


Another bric hits the wall, as one might perhaps say….but an imminent disaster predicted by all sane economists the minute Yellen began tapering QE.

However, as Jim O’Neill’s hyped brics sink like, um, bricks, we still have what’s being dubbed The Second Eleven as chosen by those upstanding, multiple class-action facing Masters at Goldman Sachs. The 11 include places (like the Philippines, Turkey and Mexico) that saw share booms as foreign investors washed their markets with fiat paper. Inflows into Goldman Sachs’s U.S.-domiciled Next 11 equity fund sent assets under management to twice the level of the firm’s Brics counterpart.

Today, the 2nd XI look as if they’re about to retire hurt from the game: their composite equity gauge has collapsed some 20% – even worse than the 14% Bric index plunge. The Goldman Sachs fund has shrunk by 50%. Perhaps they should rebrand as Foldman Cracks. Still, nihil desperandum Lloyd – bonuses all round, Yo!

As many of you know, the one thing that has both saved Greece from Communism and restored the EU to health is Finland – that small plucky country which spewed forth the opinion millionaire Alexander Stubb, one of the few men in the world Wolfie Schäuble likes to pull out his tongue at.

But Alex has been found out: for Finland is emerging as the European Union’s weakest economy because of its failure to build a competitive labour market. Its economy is contracting for a fourth consecutive year; Stubb described the development as “worrying.”

The government has so far failed to persuade Finns to accept pay cuts that Alex happily shoved down the Greeks’ throats, and the country’s problems have been exacerbated by Russia’s recession….which in turn exists thanks to US and EU sanctions…in which Stubbsie was an enthusiastic catalyst.

What can one say except hahahahahahahahahaphuuuurt?

Many people may have missed it, but the news yesterday that Waitrose profits had halved, while Morrisons’ earnings were negligible (and they’re about to close 12 stores) came on the back of what UK citizens already knew about the struggles of Tesco to keep afloat. The deep-discount supermarkets are gaining share hand over fist and giving the lie yet again to any credible idea of a real UK recovery. We have had the jobless recovery and the less hours recovery, but now we do seem to be staring at the purchaseless recovery.

Or – put another way – there is no recovery.

One in eight households in the UK now have ‘problem debt’ – that is, they spend around 25% of monthly income on unsecured debt repayments, such as credit cards, loans and overdrafts. But 1.6m households are spending as much as 40% of gross income on debt repayments (not including housing debts like mortgage or rent payments). And a huge majority – 1.1m – are lower-income households. They are thus forced to trade down while at the same time juggling one debt against another.

No mass-market recovery in British gdp is possible while the masses themselves have neither the cash nor the confidence to consume….and exactly the same Page One rule applies to downmarket US and European mainland families.

Equally, as long as short hours, zero-security and zero-benefits employment models predominate, there will be no improvement in productivity. Who in their right mind expects underpaid and demotivated workers to reward serial disloyalty on the part of their employers with increased productivity?

Amateur Friedmanite disciples seem unable to understand why absent spending and falling output per head are obvious results of the neoliberal claptrap we’ve been fed for nearly two decades. This concerns me greatly, because I’ve always slept better when I felt those ‘above’ me knew WTF they were doing. As they obviously don’t – but continue to pontificate upon the absence of viable alternatives – I get sleepless just thinking of the parallels: such as, I feel day in day out as if nuns are categorically insisting that only indulgence in depraved sex can save the human race. The obvious response is, “What on Earth would you know about it?

Some time soon (and at long last, we are talking ‘soon’) the bollocks hiding behind the pies in the western Sky will drop to earth with a squelch, until enough analysts realise that financialised capitalist make-believe is transmuting as rain upon the real world below. That means cash flow crises, price wars, further deflation, major distributor failures, rising unemployment among even the underemployed, and catastrophe for those banks facing bad debts, failed loans and bad bets as the chickens come home to roost.

So when you look out of the window, and wet roosting chickens are dodging falling bollocks while trying to catch plummeting pies, then you need only the warbling obese woman for the full set.

Just as one wouldn’t give an ice-cream vendor the job of kitting out a probe bound for Venus, so too we shouldn’t elect 650 people who know nothing about social anthropology, and from them choose a draper’s depraved son to run the economy….alongside the spawn of an offshore tax evader to put the bankers’ house in order and protect the citizens. We like generalists in Britain, because you see otherwise we’d get nasty corporate technocrats running things like they have in Brussels. Here in Blighty, we vote for gophers who take the orders of technocrats, because we are the fount of modern democracy.

Neolibrics, Neolibritain, Neolinland, Neolichina, Neolibeuro, Neolibereleven. It’s all going so terribly well, isn’t it?

Enjoy the weekend.

Yesterday at The Slog: Why is Britain turning into 1933 south side Chicago?

32 thoughts on “CRASH2: When 16, 6 & 3 are added together, then you’ll know to head for the silo

  1. “Just as one wouldn’t give an ice-cream vendor the job of kitting out a probe bound for Venus, so too we shouldn’t elect 650 people who know nothing about social anthropology, and from them choose a draper’s depraved son to run the economy….alongside the spawn of an offshore tax evader to put the bankers’ house in order and protect the citizens.

    Question that needs to be asked is….

    ” How did Junker come to attain his position?”

    WhoTF voted for him?

    Small errata….

    “There’s more still: 25 is the smallest square that is also a sum of two (non-zero) squares, 5×5. This can only mean one thing.”.

    9+16, to replace 5X5


  2. ‘How did Junker come to attain his position?’
    Merkel. It was a done deal, a favour returned no doubt, or an inducement to keep his mouth shut, or a million other reasons other than that he was qualified for the job.


  3. Don’t forget the pyramid inch ! A++ Mr Ward. Have a sunny wkend Yalding.(?)
    Year 2085 the first Independent scots moon mission (Darrien 1 ?) fails 1/2 way.
    “Hoots mon, we have a problem”


  4. ” … a depraved draper s son… ” ?? Have a care fellah.!! The man is perhaps more genteely portrayed as ” .. the wayward progeny of a nstionally treasured bespoke tailoring conglomerate …. ”

    At least that s how his mother would phrase it,


  5. Meanwhile, here in Japan(one of your bad examples, I believe) infrastructure maintenance, improvement and new-build continues relentlessly, week-by-week, month-by-month, year-by-year; new roads and motorways, new housing developments, new concert halls and sports facilities. The shinkansen has increased its upper speed limit. Possibly the world’s best health service continues to nurture and support an already health-conscious nation. I feel very lucky to be able to live here, and wouldn’t dream of ever returning. There are some negative aspects of course, mostly to do with national character and politics (aren’t they everywhere?), but I’m not here to cry stinking fish. You should make the effort to come out here and see for yourself; at the risk, of course, of being permanently disgruntled thereafter. No rose without a thorn. I almost forgot; burnable rubbish collection twice a week, recycleables and cardboard twice a month. And not a single bin, of any kind, anywhere. Beat that!


  6. Juncker is on record saying the following about European democracy and transparency:-

    “When it becomes serious, you have to lie.” — Referring to the Greek economic meltdown of 2011.
    “Of course there will be transfers of sovereignty. But would I be intelligent to draw the attention of public opinion to this fact?” — Referring to calls for a British referendum on the Lisbon Treaty.
    “We decide on something, leave it lying around, and wait and see what happens. If no one kicks up a fuss, because most people do not understand what has been decided, we continue step by step until there is no turning back.” — Referring to the introduction of the euro.”

    How is it possible that in a ‘union’ of 500m people, presumably most of whom are in favour of democracy, a movement hasn’t arisen to ‘depose’ this man as unfit for purpose?


  7. It’s all a fakkin’ joke maite.
    Ar’ve bin waitin’ since 2008 for it all to go tittsupp. I’ve read yer blog, bought gold, inflation proof bonds, tins of lentils, bottled water an’ stuff-an’ still the machine ticks on. The man with the money machine can control and manipulate it all.
    Can the machine outlast us? Dunno, but it’s no good being proved right at last when you’re dead.

    “If, in any other commodities market on the CME -the world’s biggest futures exchange, the ratio of paper to the available underlying physical commodity approaches a 2:1 ratio, the Commodity Futures Trading Commission cracks down on the manipulator.”
    The ratio of paper gold outstanding to the amount of gold being reported as available to deliver has spiked back up to 126:1.
    As one reader commented:
    “This is totally rigged. I’m going to Vegas, at least the tables are more level then these markets and I get free booze and some really hot chicks.”


  8. On the 25 point. I’ve just realised that it fits for me too….. I’ve got 10 fingers, 10 toes and 5 pencils…. What does it all mean…???


  9. The paper to physical ratio for gold is now over 200:1 on Crimex. The 1500 tonnes that Vladamir has is for real which is probably 1490 tonnes more than the COMEX.


  10. A little like Captain Renault, JW, “I’m shocked – shocked”. 25 is far from the smallest number that meets your conditions.
    How about – for example: 9?
    = 25 + (4i)squared?
    Everyone loves a smartass – sorry. But consider, you being a bloke not altogether unlike Homer, one doesn’t often get the opportunity.


  11. When you say “How is it possible that in a ‘union’ of 500m people, presumably most of whom are in favour of democracy, a movement hasn’t arisen to ‘depose’ this man as unfit for purpose?” – how is it that a ‘union’ of 500m people hasn’t had its accounts audited in six decades?

    The EU in this respect is ILLEGAL in statutory terms.

    Only the might of America is keeping the idea afloat, after all, it was American money that set it up in the first place (and is the major reason why the accounts have not been opened to third-party scrutiny!)

    So the reality is that Juncker is only playing the same game the EU has played since its inception: pure deceit.


  12. JW

    Long time ago now … pulled up the dow and removed the logarithmic scale and you could see the true state of affairs over a century of data. Then you drew a best fit line on level of growth over that time and SEE THE BUBBLE. Then “because they destroyed the old FTSE data” you could extrapolate from how the DOW had behaved onto the FTSE. 1500 real, 4500 rehpothecated :-) That’s what is costing, they blew the bubble over decades and in 2009 I was watching the thing crash through all the old support levels if they had been extrapolated into the future. You only use logs when you are dealing with rapid growth or collapse and from a bankers point of view if you also want to disguise what you are blatantly doing.

    Can cheer you up though JW, lets put it this way if it goes into collapse again they will QE so we will be alright right? If their needs demand it so it will be done no matter what you say, ditto FED, ECB and BOJ and you might want to add in all the other central bankers.


  13. 25, the sum of the squares of the 2 smallest prime numbers and once reached, 5 gets added to the mix as it oscillates to inifnity. Next important one after that is 49 and the number 7 and on it goes forever.


  14. @ Gemma
    Yours and mine are similar questions with similar hypothetical explanations and answers. Too many in positions of influence have consented to turn a blind eye to the aspects of the EU they would normally repudiate in everyday conversation, illustrating the truth of the saying: “All it takes for evil to triumph” etc.


  15. BBC News: Woofbang Schambles issues a stern warning about Moira Druggie’s bubble bath; he suspects she’s doing something naughty with the soap. Someone’s told him she’s been Quietly Exfoliating and he wonders what happens when all that hair gets stuck in the plughole. Never mind the prime numbers, what are we doing about the prime nutters?


  16. That is indeed so, Alexei.

    But the powers behind the European Union are the kind of people who can wait for a very long time. Say what you like, but the prime purpose of the EU was to establish TTIP. It’s taken them half a century to achieve, but they have achieved it. If for the only reason that modest pieces of otherwise innocuous legislation are now in force in European countries that stand as the foundation for TTIP. TTIP was a reality, say, five or even ten years ago – when we knew nothing of it!

    And as you say, all they need to achieve this is for people to look the other way, make excuses (or in British terms, be furnished with small children for their pleasure).


  17. That is the problem when the US and UK have bubble bath economies and Germany has a business economy, isn’t it?

    They look the same on paper, but oops! Where’s the soap gone!?

    That’s when the US goes phut.


  18. To be fair, Germany has both but more of the latter than the rest. There’s too much fairy liquidity and the fundamentals are just mental: it won’t wash and the machine is stuck on the spin cycle. Uneconomical repair?


  19. You exagerate – it is only two decades – and the accounts HAVE been signed off – albeit as not fit for purpose (or affected by material errors in EU parlance).


  20. I only ever listen to the Today programme when taking a bath these days – no bubbles except those resulting from unavoidable flatulence and I always keep track of the soap. I was thoroughly disgusted just now by the way in which the BBC has worked itself into a negative frenzy about the Labour leadership election and the possibility of a win for the candidate from Nazareth North Islington. Not one solitary word was devoted to the idea that, just maybe, voting for JC could be a ‘none of the above’ reaction and that a misguided man with integrity, in these dark days, might seem more attractive to many than the suited jackals who, we are led to think, are the only realistic ‘modern’ choice. Humphrys – a man who so obviously loves himself to distraction – excelled as usual in steering the ‘debate’ to the extent that I was forced to turn off the radio lest I had to run more water to remove my regurgitated breakfast. The baby is all washed away and we are left with a scummy residue that pretends to serious analysis. Unbefeckingbelievable.


  21. Dows ! Took me back some ..They used to sail down the East African coast … loaded with affordable lighters and cameras.
    I’m in denial at the moment …… can’t stand the swamping of false .mages


  22. Spot on, Hiero, I heard on the BBC news that ‘9 out of 10 Labour MP’s don’t support JC’, but clearly the general populace does – says it all about the Us and Them feeling that pervades these days! No-one seems able or willing to discuss this…..


  23. You’ll find that Deutsche Bank’s misdoings were all contrived by their British subsidiary in London, where banks get a “get out of jail free” card AND at the same time pass Go to collect $200 (million). ;-)


  24. So would you please elucidate where I exaggerated… and provide details of the external organizations who audited these accounts from 1957 onwards? That would help a little.


  25. TINA should get the reply TAPAS (There Are Plenty Alternatives Sir/Stupid) you just need to change tack and change taxation from the workers to rentiers and land.


  26. @Gemma,

    Well to start with the European Union was established after Maastricht in 1993 – so it is 22 years old (and it has had 500M people for less time even than that). No-one would have audited the accounts for the 30 years before that as there would not have been any. Then there is the lag – whilst we are in 2015 the last reports are for 2013 – so there are about 20 sets of accounts.

    And as I say, if you have a look at the accounts they are actually signed off, but are quoted as materially affected by error – normally around 5%.

    Here are 2013 accounts – The 2014 accounts due in October / November.

    The European Court of Auditors is responsible.

    Page 11: XI. All policy groups covering operational expenditure are materially affected by error. The Court’s estimate for the most likely error rate for expensed payments underlying the accounts is 4,7 %. The supervisory and control systems examined were partially effective in ensuring the legality and regularity of payments underlying the accounts.

    And remember also that this was after Herman Van Rompuy asked them to tone down the criticisms.

    So, Gemma, you are absolutely correct in saying they are dodgy – so dodgy that if you or I made similar errors on our tax returns we would be punished – but they are not quite as dodgy as your post made out.



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