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The Butterfly Effect

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Synopsis: Isaac examines the universal law of Cause and Effect; unveiling some of his secrets on how to solve problems...

...I often believe people, companies and governments think they are autonomous to the natural law of Cause and Effect and only see the short term gains as opposed to the possible long term pain.  Sometimes decisions are made that don't even provide a short term gain as what was thought to be the right thing to have done, turns out on reflection to have been the very wrong thing to have done!  We have all heard of the fabled beautiful butterfly that flaps its wings and the ever increasing ripple effects of that causes a hurricane 1000 miles away.

In my article dated 15th August 2011 titled, “Stupid Politicians” I cite, due to the short termism by politicians when dealing with the original debt crisis in 2007/8 there is now, in my opinion, no solution to the global debt crisis at the sovereign level and that it is only a matter of time before the world effectively implodes due to the full effects of this crisis.  This process can currently be seen with rising debt yields in certain countries to unsustainable levels and falling equity and commodity prices across the globe as the contagion spreads like a virus and I believe it is now likely that a market crash is plausible (see previous post titled, Black Friday for technical argument).

On 22nd September 2011, I post the following on the blog of trader Carl Futia:

…If history repeats itself we will most likely have a strong equity market rally until mid/end of October before complete collapse in equity, commodity and bond markets etc across the world.

Hopefully, the world and the politicians and bankers who run it will learn from this debacle we are all witnessing and that a key ingredient when attempting to solve a crisis (or indeed any problem) is to always take a step back and try to look at the bigger picture and the fundamentals (truth) of a situation before acting and to try and extrapolate to the ultimate consequence of the actions you make – not just the immediate reactionary consequence. In other words think ahead and read between the lines, as very little of what is said is generally the truth and non-verbal communication makes up for 93% of all communication!  Furthermore, what this crisis amply demonstrates is that by not dealing with the root cause of a problem and instead by papering over it, as we all may have a tendency to do at times whether it be with a relationship, work or money issues etc, you never solve it and it is just storing up greater and more severe problems in the future.

Under the law of Cause and Effect, every action and decision we make has consequences and those consequences have consequences etc and every time we leave a problem unsolved it affects us in our daily lives and those ripple effects grow until at some point they may topple us just as countries are being toppled now. After all, we are all to some degree, a function of our past.

I recently went through a very tough time, but always kept my faith and belief in what the eventual outcome would be and sometimes very negative situations happen so that even more positive situations can occur.  If you can understand the fundamentals and the bigger picture of any given situation then, just like a mathematical equation, there can (I hypothesise) be only one outcome. Of course sometimes you have to take your best guess and we will always make mistakes, but generally, as long as we acknowledge and learn from them and care about and help others and our environment then we can hopefully put the errors of the past right before disaster strikes (except in this global meltdown :-)).

On that cheerful note and as there is nothing we can do about solving this crisis, have a wonderful day and some fun and if you need to Heal someone by saying sorry for a past error then why not make that call today and brighten up both your days sun.




[Also read Isaac's latest posts, "One Last Sleep", 'She Died in my Arms Tonight... RIP Mum, 1st June 1935 to 13th June 2014;' "A Kiss from a Rose", 'A Champagne and Rolex Affair...; "Sex on Fire", Making you Shine for Valentine's Day; an emotional aphrodisiac and Isaac's steamiest article yet...; "A Giraffe is not just for Xmas" and "The Bobby Ewing Shuffle", the follow up to “True Love at 15000,” an article stirred with beautiful love, showers, dreams and Dallas x... Other relevant articles include: "True Love at 15000", an article about 'coming of age,' wisdom, dreams and, of course, True Love...; "Let's Face the Music and Dance", the follow up to, "The Lonely Goatherd," and an insightful look at relationships and the lessons to be learned from our elders; "Scream and Shout", exploring Love at Xmas Time... Let it ALL OUT!; "Naked Fishes", a Birthday celebration of's Modern Day heroine, Maria; and further articles that illustrate "The Butterfly Effect" include: "Suicide Blonde", an unbridled account of how Isaac’s world collapsed and why he is still alive today to tell his story; "Stupid Politicans", "How Do You Solve A Problem Like Maria?", "Steve Jobs iRIP 1955-2011", "I Believe In Angels", "Wacky Races", "Staying Alive" and "The Naked Countess"]

Black Friday

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Image of Bailout Failing, Market Crash.jpg

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...Following on from my article,The Butterfly Effect; and as today is known as Black Friday in the United States then I thought I would call this article the same…the relevance should be become apparent as you read it.  What now follows is a current analysis of key equity markets and why I believe we are heading much lower from todays' current levels.

At the time of writing, the FTSE 100 index in the UK and the Dow 30 and S&P 500 in the US - which are leading world indices - have completed Head & Shoulder patterns on the weekly charts.  Should the stock market falls continue, then within days the charts should post sell signals on the MACD (a widely watched technical indicator) at the weekly level.

A Head & Shoulders pattern is a bearish pattern that signals a potential fall in markets. In addition, the FTSE 100 is now below the key 200 day Moving Average on the weekly chart which is another sell signal and very bearish even though the Dow and S&P 500 have yet to breach that key level on their relative 24 hour trading charts.

Should these patterns play out then they indicate a minimum fall of 20% from current market levels and once the sell signal is triggered on the weekly charts, the fall could take the form of large one day drops or controlled falls, but seeing the current price action of the markets where the FTSE 100 index has fallen for 9 straight days it is leading me to believe that a huge one day sell off could be imminent. I post pictures of these charts for reference (click image to enlarge).

FTSE weekly bar chart, Head and Shoulders formation, 251111.pngFTSE 100 Weekly Bar Chart


FTSE MACD weekly H&S, 251111.pngFTSE 100 Weekly MACD


Wall Street weekly bar chart, Head and Shoulders Formation, 251111.pngDow Jones Industrial Average Weekly Bar Chart


Wall Street MACD weekly MACD, 251111.pngDow Jones Industrial Average Weekly MACD


S&P500 weekly bar chart, Head and Shoulders Formation, 251111.pngS&P 500 Weekly Bar Chart


S&P500 MACD weekly Head and Shoulders, 251111.pngS&P500 Weekly MACD

These charts are based on 24 hour trading and not on the daily cash charts. Also I am only looking at a selection of technical indicators (some of which I do not discuss in this article) and I must stress that this is purely my opinion and I am not qualified to give financial trading advice. Please read the terms and conditions on my blog for further information.

However, once the neckline on these Head & Shoulder formations is broken (as indicated by the black thick line in the weekly bar chart graphs), only a move higher above the peak of the Head on each index will nullify this bearish pattern, but it is my opinion that this will not happen and next year markets will move significantly lower than their 2008 stock market lows.

By taking a step back to study the bigger (Global) picture and understand the fundamentals, the inevitable conclusion is of this dramatic outcome.

Stupid Politicians

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Image of Short Termism, Isaac Sarayiah, Sarayiah,

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...Short Termism of course is not exclusive to our elected leaders.  Companies and individuals tend to only see what is in front of them and not the consequences of their actions beyond the initial ripple. People do it all the time in relationships, work etc as most fail to grasp the bigger picture.

When the world faced a liquidity crisis in 2008 and the banks were on the brink of failure, there was only one solution that would have saved us from the nightmare that is about to ensue from the collapse of nation states around the world due to the implosion of untenable debt. That solution, as I said at the time, was to let the banks and other institutions fail. Protect the depositors, but otherwise let them go to the wall.

Of course those consequences would have been severe, but at least we could have rebuilt knowing the bottom was in and it would have been tough for a couple of years possibly but markets would have recovered and been all the better for it as the recovery then would have been sustainable.

Instead what our idiot politicians and bankers do is that they flood the world with printed money. Creating more debt to 'solve' a problem that was created by debt....Non sensical and illogical and now the repercussions (see "The Butterfly Effect..." and "Black Friday") are about to be felt and there is no solution that can head off the impending implosion of our World. It's just a matter of time...



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