Kondratieff vindicated? ((Stock Market crash)

So far, the DOW is down, everybody is saying it is 1929 all over again. I note that it has been about 79 years, which is about the period of he 'long wave" business cycle, predicted by Kondratieff.
So, assuming this long-dead economist is right, will we have to wait till things get better?:frowning:

From wikipedia, here are the frequencies of these various waves:

Cycle/Wave Name Years
Kitchin inventory 3-5
Juglar fixed investment 7-11
Kuznets 15-25
Bronson Asset Allocation ~30
Kondratiev wave 45-60

60 < 79, but is also roughly equal to 79, just like 45 is roughly equal to 30. The 1987 stock market crash occurred almost 60 years after 1929, further supporting the Kondratiev theory. And it’s only 21 years after 1987, which is close to 30.

Basically, every recession is claimed to support Kondratiev, just as every major world event was predicted by Nostradamus, at least in hindsight.

More seriously, a lot of these guys found their cycles by taking moving averages of their data. But it was discovered later that you will get a cycle even if you take a moving average of pure white noise, and that the frequency varies with the number of periods that you average over. (Try this in Excel!) The empirical support for these sorts of theory is likely to be a statistical artifact.
No, we will not have another Great Depression. Or rather, we will have one if our leaders don’t get their act together. But they will: already Paulson is indicating that he will take the advice of the economic community and use the $700 billion to recapitalize the banking system, rather than merely buying assets.

And if that doesn’t work, they’ll try something else. Bernanke, Paulson and Barney Frank understand what’s at stake and are determined not to replay the 1930s.

Rome wasn’t burnt in a day. And the US hit rock-bottom in March 1933, years after the 1929 crash. So we have some time.

But frankly, I’d prefer not to have a severe recession or even a mild depression. So it would be nice if we got a serious statement by our international G7/8 leaders this weekend.

I’d love to, just as soon as I can determine a period of white noise.

No, this theory is complete garbage.

I didn’t have time to read all the works Wiki cited, but this /article does a fair job of deconstructing this myth. I don’t usually agree with the Mises Institute, but one of my college professors is a member and he knew his stuff.

Try a Palin speech.

So something between 3 milliseconds and 48 microseconds? Got it.

… in case you’re kidding on the square…

Use =RAND() to get a random number, uniformly distributed between 0 and 1. Copy it, then Paste-special, then Values. Take a moving average of that.

Below I show the random series and a 6 period moving average of that series. Note how regular the second one is. http://wm54.inbox.com/thumbs/6_130bb8_eb3fcb5b_oJ.jpg.thumb

It looks a little like a business cycle, doesn’t it?