The only question is when will the banking system become so overloaded that the dike bursts. Another crack in the levee came from the country s largest and most respected securities megalith, Nomura. Expect other major casualties in the investment arena before the end of the year. The only question is when will the securities industry become so overloaded that the dike bursts. HK pumped in tens of billions over the past six months in a largely unsuccessful attempt to support its equity market.
Financial markets are bigger and smarter than government plans or planners.
As with HK, the Japanese market will find ways to skirt the shorting restrictions, or traders will just get out of the market altogether. Reduced liquidity is the last thing needed by the world s rapidly dehydrating financial system. Despite missing much of the historic rally off the 1987 crash lows to this summer s highs, Bob Prechter was one of only a handful of analysts who called the market low back in 1982. And he is one of only a hand-full of analysts who called the market top this summer. That Late Great Bull Market mascot, the Beanie Baby, has hit the skids faster than a tulip bulb in 1637 Holland.