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The September/October Phenomenon (Recipe for Financial Disaster?)

by Paul J. Murray

50 pages; quality trade paperback (softcover); catalogue #02-1006; ISBN 1-55395-292-8; US$17.00, C$26.01, EUR17.00, £11.80

Analytical review of the recurring patterns of the Financial Markets and other institutions to see if there are interralationships that targeted the events of 9/11/01 for that particular day.

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about the book      about the author      sample excerpts or Table of Contents      catalogue info

About the Book The various chapters of this work are discussions of those subjects and topics that I believe, when taken collectively, have had a major impact on our Economy because of the events of 9/11. That impact continues today. - Paul J. Murray Who Should Be Interested In Reading This Book? Anyone who wants a better insight into any of the following topics:      Y2K      Federal Reserve      Chairman Greenspan      Interest Rates      Terrorism Anyone who has:      Ever invested in stock market      Ever paid a capital gains tax on a mutual fund distribution      Concern about our vulnerability to terrorism      Wondered why our economy and financial markets turned negative in 2001 Description of Book: An attempt to identify and examine those financial institutions, economic events, and tax policies, that were in place prior to 9/11 to see if there were any interrelationships between these institutions, events and policies that could have led to the timing of the attacks to have occurred when they did. If there were, in fact, recurring events, then could these recurring risks be diminished or eliminated. The various chapters of this work are discussions of those subjects and topics that I believe, when taken collectively, have had a major impact on our Economy prior to and because of the events of 9/11. That impact continues today. What is the Book's Main Message and Its Importance? There are some problems inherent in our tax system that causes artificial non-economic trading in the stock markets to occur annually during the September/October time frame. This trading is not in synch with economic conditions. It poses a problem because it creates artificial weaknesses in the financial markets. If anyone wanted to inflict economic damage to the financial structure of this country they are most likely to achieve their goals during the months of September/October during this phenomenon when mutual funds and financial institutions, in general, are taking advantage of the selling by mutual funds who must, for taxation purposes, distribute their capital gains by year end. Mutual Funds generally close their books by October 31st in order to provide enough time to determine and distribute their gains in compliance with tax laws. Why Was This Book Written and What Was Learned as a Result? This book was inspired by the events of 9/11 and my realization that there was probably a sinister reason why it occurred during the September/October Phenomenon. I was already interested in the influences of the Federal Reserve and its actions (and inactions) relative to the interest rate yield curve. This relationship, I suspected, pointed toward further weaknesses in the economy and the financial markets. I suspected that there were some other events and policies that also pointed toward this particular time. I needed to satisfy my own curiosity. Hindsight being 20/20, I wanted to identify what could have pointed to this particular time. I tried putting myself into the mind of someone who would want to inflict as much financial damage on the economic stability of this great nation. Was there a time when the maximum amount of financial and economic damage could be inflicted? Could such a time be predicted? When would be the best time to inflict a follow-up that could, or would be the coup-de-grace? I wanted to use my unique training and experiences in this analysis. I felt that what I was reading and hearing in the media was not going to the heart of the matter. The potential financial impact and economic severity of the 9/11 attacks was not adequately being presented nor understood. It all came down to: What had occurred? Why had it occurred? Why did it occur at this particular time? And, more importantly, could it occur again? If so, how could this threat be thwarted? What Will the Reader Gain By Reading This Book? The reader will definitely gain knowledge of some of the problems inherent in our tax system that cause non-economic and artificial trading in the stock markets that occur annually during the September/October time frame. This trading has no relevance to economic conditions. The reader will gain knowledge of this artificial weakness in the financial markets and our vulnerability because of this. Primarily, the reader will see the events of 9/11 from a different perspective. Also, the reader will gain knowledge of some technical aspects of interest rates and the financial system, timing of the stock markets as well as the interrelationships between tax policy, financial markets and economic activity. Some of the predictive qualities of watching various technical aspects associated with interest rates, yield curves, advance/decline ratios and market activity will be gained. Reader could reduce their investment risk by timing some of his investment activities to coincide with the September/October Phenomenon (S/OP) if our law makers do not eliminate this artificial restraint on normal market activity. A reader will become more cognizant of some of the influences on the financial markets - interest rate changes by the Federal Reserve, tax policies, seasonal influences, etc. Hopefully, the reader will improve his understanding of market influences and will be more aware of the necessity to pay more attention to potential market influences and their consequences. The reader of the book can take topics of this book and apply them to their own investment philosophy, situation and strategies. Armed with this information, the reader might want to get active in petitioning lawmakers to change existing laws to eliminate these artificial influences so that the long term market appreciation potential is not artificially negatively influenced. More importantly, changing the tax law (taxing the recipient of mutual fund capital gain distributions) that imposes artificial influences would go a long way toward elimination of the potential vulnerabilities in our financial markets. How is This Book Different? The uniqueness of this book is a result of the unique background and training I bring to this analysis. My formal education: BS in Economics. My early career was in Computer Systems Analysis and Programming. That training I have used to this day. I have over twenty-eight years as a professional in the financial services industry. I have always been a student of technical analysis. I have market charts and data that go back to the early 1970s. Early in my current career I was interested in interrelationships between certain facts. Those early and ongoing observations triggered thought processes and questions about 9/11 that I had to pursue. I did. The book is the result of my inquisitiveness.

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About the Author Resident of Shavertown, PA and Naples, FL. Native of Pittsburgh, PA. Raised in New Jersey. Graduated from Perth Amboy High School, NJ ('60). BS in Economics, Albright College, Reading, PA. ('64) US Army Signal Corps, stationed in Korean DMZ area. Honorable discharge. Computer Industry background: Wyeth Labs, Great Valley, PA - Systems Analysis; RCA's Computer Division, Philadelphia, PA - Systems Representative; Independent Consultant. Financial Industry background: 28 years Financial Consultant What Should the Reader Know About the Author? My background and training is unique. My formal education is in Economics * I have a B.S. in Economics from Albright College, Reading, PA Class of '64. My Early career was in Computer Programming and Systems Analysis. I have used that training to this day. It is extremely helpful when doing systems analysis to work backwards * what is wanted as a final product (?), what is needed to produce the final product (?), and where do you get the necessary data to achieve the end product (?). Computer programming is exacting and requires concentration. I have over twenty-eight years active experience in the financial services industry. Over the years I have learned to identify those individuals who are experts in their particular fields - my gurus. I learned to depend on the data, not someone's interpretation of that data, unless they have proven themselves to me. I have always been a student of technical analysis. I have market charts and data that go back to the early 1970s. That data was extremely helpful in researching the September/October Phenomenon. If additional data were needed, I knew where to get it. Early in my current career I was interested in interrelationships between certain facts. The author can be contacted at sophenom@aol.com.

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Sample Excerpts or Table of Contents

From the Introduction: "The events of September 11, 2001 (9/11) caused me to think intensely about S/OP. Was the timing of 9/11 a mere timing coincidence? Or was the timing more sinister? Were there other factors that contributed to that particular timing? If there were, what were they? If there were other factors, were these recurring factors? If so, what could be done to eliminate their recurring nature?" ***** The attack upon the World Trade Center (WTC) on September 11 was, I believe, first and foremost, an attack on the Capitalist System that is the heart and soul of this country. The fact that the World Trade Center was the target was more a result of the fact that there was no other location that had such a concentration of some of the most influential financial corporations of the world. The New York Stock Exchange (NYSE) would not have been as effective a target. Yes, it is the focal point of Capitalism, but it did not house all the corporations that resided in the World Trade Center. The NYSE is where the trading occurs; the influential traders and back offices of the various member firms are not located there. ***** "I believe that the real goal of our current enemies is the total collapse of Capitalism. Our attention is focused on terrorism. We, as a nation, are missing the real threat - our world, and its primary foundations, are the real targets" ***** From Some basic Facts: "With the above facts in mind, that markets are most vulnerable to chaotic events during the months of September and October. They are extremely vulnerable during this period especially when the economy is declining, as was the case during 2001. None of the above information is a secret. Each of these is widely known. Has everyone put all these facts together? Probably not, unless there was a motive for analyzing these facts and putting them together for some purpose and/or strategy." ***** From Financial Terrorism: "If the destruction of our way of life is, in fact, their goal and their mission, they have come a long way toward taking the first step toward inflicting great damage to the U.S. Some things can be changed to prevent the current or some other determined adversary from inflicting similar financial chaos upon this nation in the future. Those changes must be considered and the changes have to be made. Our way of life is at stake" ***** From Capital Gains Background: "There is one particular section of the tax code that, on its own, has a notable impact on the nation's stock markets. This phenomenon has been going on for quite awhile. It is a fact of life and is, therefore, tolerated. This would be okay except that I believe that this fact of life has in current years taken on more significance, especially in 2001. What is it? It's the taxation of Capital Gains distributions made by mutual funds." ***** From Mutual Fund Trading Background: "The key message of this section is the fact that there are artificial trading patterns in the markets that really have nothing to do with economic activity." ***** From The Media: "The media is an unintentional accomplice to those who would undo our society. A bit of information from here and a bit from there and it soon adds up to a pretty complete data set. None of it is intentional, but never the less, it soon becomes pretty comprehensive." "The media is as much an accomplice as the airlines were for the September 11th disaster. We now have safeguards on the airline industry. What safeguards do we have on our 'freedom of speech' media? If I were an enemy of this country, I would exploit those institutions that offer the best and greatest safety. There are no rules when it comes to terrorism. Use anything and everything to accomplish your goals and objective (the Yom Kippur War (religious holiday), Pearl Harbor (Sunday morning) attack, etc). Do what you have to, no matter what." ***** From Convergence of the Many Variables - 'Recipe for Financial Disasters': "The Fed had a potential problem. Suppose that the public perceived that the Y2K problem was unsolvable. There could be a run on the banking system at year's end that could severely test the liquidity of the banking system. If there were a run on the bank, would there be enough liquidity to calm the masses? But, what if there was sufficient liquidity, the Fed could later extract the excess liquidity. If there were insufficient liquidity, what were the consequences? Would the country, and possibly the world, experience a run on the banks? Unthinkable." "There was considerable opinion that the Fed was acting too late with too little stimulus for the economy" The subsequent half point rate reductions reinforced the new negativism. The perception was that the Fed had to drop rates faster. But the Fed was not taking the initiative. Toward the end of March, the markets succumbed to its frustrations with the Fed. The general perception was that "there was nobody in charge" at the Fed; at least no one willing to take the necessary actions to halt the economic decline."

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Catalogue Information

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