(Two days after a mini-crash in the markets called Red Monday, Tia reviews for us some of the factors that would trigger a rise to Defcon two. She does provide a look at what happens on the base on a daily basis with the reports she has to present to Omal.) 

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Okay, do you have any questions?

Russ: yes, would the sudden recovery of the Chinese markets….

Tia: uh-huh.

Russ: and the recovery of the American markets, then we’re still not declaring defcon two to at this time?

Tia: it is a day-by-day occurrence.

Russ: okay.

Tia: what I do is I will be making my decision at the end of each day. I go before Omal, I have a meeting with him scheduled at four o'clock tomorrow afternoon our time and I will go to Omal and I will say to him, “this is my recommendation”. Let us take worst-case scenario. Okay tomorrow the Dow drops 120 points, the Hang Seng drops 400 points, the Nikkei Dow average drops let’s say 300 points…..

Russ: okay.

Tia: that is still not enough to declare defcon two. However, on Friday let us say the Dow drops another 150 points, the Nikkei average drops let’s say 500 points and the Hang Seng drops let’s say 200 points. Again on their own that is not enough to declare defcon two. However, if other selected markets like the Frankfurt, and the Johannesburg All Shares and the FTSE Index in London, if they all behave and go down a set number of points for both days, then we will look very carefully at going to defcon two. Now, if certain external factors occur on either of those two days that we’ve just looked at, the external factors being economic unrest, releasing of figures that suggest things aren’t going as well as they are, military unrest, then with those factors defcon two could be declared very easily. If let us say the stock market sets a new record drop in the United States and goes down let’s say 560 points or even further and the same event occurs in one of the indicators that we watch, an equivalent drop of over 7%, then we will look very strongly at defcon two. There are certain factors economically that have to go into place with the issuing of defcon two. Now a clarification on what is defcon two. A defcon two is a imminent warning that something is about to happen. Imminent meaning it is likely to happen soon. As I’ve learned up here, six months is soon. Defcon one is……it’s going to happen within the next 24 to 72 hours, that’s how long you have of warning. Defcon two is minimum of within the next six months, six months to a year.

Russ: okay. Now I do recall that Alan Greenspan was supposed to make some testimony in front of Congress today…..

Tia: uh-huh.

Russ: that was going to affect the market and what happened there?

Tia: it did, it did affect the market.

Russ: in a positive way?

Tia: not really. Today was the second-largest trading day ever, yesterday was the largest with over a billion shares.

Russ: wow.

Tia: uh-huh. It went up and it went down and it ended up being up only I think eight points without going over to my computer and stepping over the two lovebirds, I really can’t tell you.

Russ: no problem. Okay that’s just kind of what I was wondering about......

Tia: uh-huh.

Russ: I wasn’t sure how much his comments were going to affect the market.

Tia: well it did, it did.

Russ: okay.

Tia: but he was very careful and cagey about things.

Russ: hmmm good. Now with the turbulence in the market going on, how does that affect predictions and everything going on?

Tia: actually if you remember and I said earlier on, I mentioned that in the past I have made predictions of what’s going to happen. The predictions are still the same, they haven’t changed one iota except for the fact to say I told you so.