(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.)
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.
|