Today’s entry will be a short one. I’ll be merely raising the topic I’ll be covering over the next few days:

Do the probabilities favour a 1966 to 1982 type recession? Or will we be facing a deflation?

I’ll be considering this question firstly from a fundamental viewpoint, then a technical. I’ll then look at some options we need to take for the favoured scenario.

In the fundamental area, the two main topics will be:

1. The impact of the mortgages known as Alt-A, Options ARMS, and Interest-Only
2. The impact of the US$4.6 trillion dollar bailout and the FED policy of quantitative easing.

In the technical area, we’ll look at the 1966 to 1982 DJIA chart and the 1932 todate and assess the probabilities of the more likely scenario. We’ll also consider some benchmarks for each.

So keep tuned!

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