Wednesday, September 14, 2011

Autumn Panic Update: Will Civilization Last Through October?

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Here is an update to my August blog, The "Fall" Is Approaching, where I highlight the historical propensity for mass panics to develop in the autumn. This blog post is an extension of the insights expressed in my general thesis that man as a species is currently insane, i.e., suffering from a manic-depressive creative genius syndrome (it's a matter of efficient "creation" IMHO - related book). [For those immediately taken aback by my thesis, just consider how history is characterized by booms and busts, eras of prosperity and "feeling happy" like the Roaring Twenties followed by mass panics, financial busts and prolonged periods of economic contraction and "feeling sad" like the 1930s Great Depression. It should be straightforward to recognize the evident historical pattern of manic-depressive mass mood swings in human society.]


My work is drawn from an award-winning 1998 article written by Chris Carolan, Autumn Panics: A Calendar Phenomenon, which points out the tendency for financial panics to climax into the 28th day of the 7th month on the annual lunar calendar:

I took Carolan's discovery a step further utilizing the lunar-based Hebrew calendar. What I found is the tendency is for mass panics to develop in between the full moon and new moon in the second half of the 7th month on the lunar calendar which is generally equivalent to the period between Tishrei 15 and Tishrei 30 on the Hebrew calendar (usually late-October on the Gregorian calendar). During this Hebrew calendar window, the following major "panics" took place:

13 October 1857 = Panic of 1857 = 25th of Tishrei, 5618

24 September 1869 = Black Friday in 1869 = 19th of Tishrei, 5630

29 October 1929 = 1929 Stock Market Crash = 25th of Tishrei, 5690

26 October 1962 = Cuban Missile Crisis = 28th of Tishrei, 5723

24 October 1973 = Yom Kippur Arab/Israeli War = 28th of Tishrei, 5734

19 October 1987 = 1987 Black Monday Crash = 26th of Tishrei, 5748

13 October 1989 = 1989 Friday the 13th Crash = 14th of Tishrei, 5750

27 October 1997 = 1997 Asian Financial Crisis = 26th of Tishrei, 5758

24 October 2008 = 2008 Financial Crisis = 25th of Tishrei, 5769

Note that I've included in the list above the October 1962 Cuban Missile Crisis and October 1973 Arab/Israeli Yom Kippur War since, while not reflected in major stock market crashes, these historical crises were still effectively mass panics. This was signified on both occasions by the fact that the highest DEFCON nuclear alerts ever were reached during these crises, actually peaking right into the same time frame of the 7th lunar month as when the stock market crashes in 1929 and 1987 climaxed.

Also note that the 1907 Banker's Panic climaxed into late October, but the Hebrew calendar has this occurring in the first half of Cheshvan, which is usually November on the Gregorian calendar. This highlights that the use of the Hebrew calendar is not entirely accurate but provides a decent way of assessing where one is in the annual lunar calendar most years.


As an addendum to the above discovery, I'd like to note tonight that there is a secondary window for potential panics to consider in the 6th lunar month, which is usually equivalent to the month of September on the Gregorian calendar or the month of Elul on the Hebrew calendar.

In Chris Carolan's article, he notes that the Panic of 1873 erupted into the 27th and 28th day of the 6th lunar month in that year, which is around Elul 27 on the Hebrew calendar. If we apply the same logic that the maximum propensity for a mass panic to occur is between the full and new moon in the latter half of the 6th lunar month, then the relevant window on the Hebrew calendar is between Elul 15 and Elul 29 (Elul is a 29 day month). Using this time frame, we find the following historical panics of note:

26 Elul 5633 - 9/18/1873 - Jay Cooke Bank fails / Panic of 1873 triggered

17 Elul 5699 - 9/1/1939 - Germany invades Poland starting World War Two

23 Elul 5761 - 9/11/01 - 9/11 terror attacks / War on Terror begins

15 Elul 5768 - 9/15/08 - Lehman Brothers' bankruptcy / 2008 financial crisis kicks off

Note that in all these cases, the collective panic in the Elul 15-29 time frame ended up persisting through the 7th lunar month and beyond. The Panic of 1873 kicked-off what became known as the Long Depression. Germany's invasion of Poland in 1939 was the beginning of years of terrible war around the world. The 9/11 attacks set off the War on Terror that continues across the globe today. The bankruptcy of Lehman Brothers was followed by a financial and economic collapse that persists to this day. Thus, while late-October, i.e., Tishrei 15-30, panics tend to be climactic, panics in the September window between Elul 15-29 on the Hebrew calendar are characteristically triggers for what proves to be extended waves of mass fear and depression.


The Harvest Moon rises over Healdsburg, California Monday night

As for 2011, we just passed the Harvest full moon Monday night and are now into the Elul 15-30 window which is equivalent to September 14 to 28 this year. Thus, we are now in a window, in terms of both monthly and annual seasonality, when man as a species is prone to suffer acute panic events. The October window, which is more apt to see a panic climax, runs from October 13 to 28 on the Gregorian calendar (October 23-24 is the equivalent to the 27th and 28th days of the 7th lunar month that marked the "black days" of the 1929 and 1987 stock market crashes).

Obviously, the ongoing crisis in the Eurozone and potential for a Greek default and/or the failure of a major European bank like BNP Paribas could act as a Lehman-style trigger for a global financial panic and the next leg down in what many are already calling a new Great Depression (the primary concern of Robert Prechter and Elliott Wave International):

Quite frankly, if the financial system and economy were all we had to worry about in the days and weeks ahead, I personally would be somewhat relieved. Economic strife is difficult but survivable. The real problem here is that I've foreseen World War Three.

As dealt with in my August 15th blog, the Elliott Wave Principle is indicating the wave down in the stock market and mass mood that started with a major planetary alignment in May should entail a 90%+ drop in stock prices in the coming months, what I've dubbed the "Apocalypse Wave":

While a second Great Depression could account for such a deflationary collapse in mass mood, it is difficult to fathom this is all that's coming our way according to the Wave Principle.

Keep in mind that the last Supercycle bear market from 1929 to 1942 involved the Great Depression with the first wave down and then World War Two on the second wave down of the A-B-C patterned breakdown. Indeed, as overviewed in my August blog, market patterns indicate we are now entering the second major wave down when major wars typically erupt.

In this regard, recent developments concerning the strategic isolation of Israel should be setting off alarm bells around the world. Clearly the ingredients are coming together for a new major war in the Middle East, this time likely involving weapons of mass destruction:

I believe such a conflict, should it come, is what I foresaw 20 years ago and is what the Bible predicts in prophecies like found in Ezekiel 38-39 and the Book of Revelation.


As an aside, one might note that the whole December 21st, 2012 doomsayers crowd is likely using the wrong date in terms of when the Mayan calendar ends. The correct date, according to many experts, is October 28, 2011:

Given that the end of October also entails the highest potential for a panic climax, one can't help but wonder whether or not civilization is about to self-destruct.

Quite frankly, I'll be most thankful this Thanksgiving if I can share it with family and friends in a society still intact. ( light of Harold Camping's latest take for the 'End of the World' on October 21st, I'm somewhat hopeful. I can't imagine he'd ever be right. Of course, what's really underway is the 'End of the Age' which is significantly different than what Christians have in mind with the 'rapture' and all such self-important nonsense.)

God have mercy on us...


Paolo said...

Thanks for all the interesting information you collected - it has been added to my already long blog reading list!

I think we are at the beginning stages of a deflationary depression. I can say that with some objective confidence given the predictions of my cycle model. The blog has a page where you can read a bit about how they are constructed.


One of the things I noticed is that some of the non-fractal cycles match some planetary orbital periods and some synodic periods, statistical certainty = p<0.01. (It would have occurred by chance 1/1000). I know not much about astrology, this was pointed out by a friend of mine who is an avid astronomer.

I'm still a scientist at heart - and I am doing a lot of head scratching. Clearly there is some cause-effect but I'm not even sure of how to begin to think about it.

J Adams said...

At least you are scientist enough "to begin to think about it". That puts you well ahead of the misled crowd. As for "cause-effect", my own read of "astroharmonics" is that correlation exists because of interconnectedness and there need not be a cause-effect relationship.

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