The world stock index is now officially down 20%, the classic definition of a bear market. The US market is within a few percentage points of joining the world to the downside, as Moneyball slides into second as The Lion King repeats in the top spot at the box office this weekend. This true story of statistics and baseball can be seen as an allegory for Wall Street and the dominance of analysis and statistics to justify and manage risk beyond what any normal person would consider reasonable. That is why we have regulations (or did have for decades until lobbyists for the banks convinced politicians to do away with the rules that helped drag us out of the Great Depression.
The nostalgia of The Lion King and the circle of life storyline basically confirms the “here we go again” feeling in the markets as another bear mauls the herd. A new generation of kids are enjoying this classic fable as their parents live through another cycle of doom and rebirth of their finances. Make no mistake, the 3D boost in ticket prices helped this re-release top the box office for two weeks.
Now, we may be heading into another Depression or at least years of very slow growth and another lost decade. The trend breakdown has been confirmed from the MarketBOB wave uptrend which started in March, 2009: