Beware the Ides of October by David Blond

October is a difficult month for markets around the world. Three of the steepest drops in stock market indices have occurred in October.

– October 24th, 1929 was the initial start of the market collapse that ultimately led by 1932 to the DOW losing almost 90% of its pre-crash level (just about 360 compared to today’s index of over 17,000).
– Another drop, equally as large, but not as long lasting or a damaging to the real economy occurred October 19th, 1987. It was the biggest one day decline, 22%, of the DOW.
– Some notable other late September and October declines were recorded on October 13th, 1989 (9% down); October 27, 1997 at the start of the Asian financial crisis there was another steep one day drop and then a slow slide down; October 9th, 2002 in the aftermath of the September 11th attack and the resulting impacts on the economy.
– The collapse in 2000 of the dot-com boom dropped the NASDAQ a market for new technology companies from over 5600 to around 1500 by 2002. The slow, anemic recovery over the period 2001 to 2007 saw the market win back much of its strength only to be destroyed with the financial crisis that began in October, 2007 and continues in some ways today.
– In May, 2010 the DOW declined 1000 points in a single day and before the stock markets current climb, led to sometimes a halving of 401Ks and other retirement accounts. This combined with the collapse in housing prices led to trillions of dollars in losses in American net worth. In Europe, mistakes led to financial crises in Greece, Portugal, Spain and even Italy adding to the negativity in world markets that has been the rule for much of the period 2010 to today.

In the novel, The Phoenix Year, the stock market over the next two years begins a slow decline induced by the fears of some investors that the market highs are artificial. With the increasing problems in the world political situation and a slower growth in Europe and China which leads to lower prices for raw materials and energy (America’s sudden shift from net importer to potential exporter of crude and gas), the market falls back to around 13,000 over the next two years.

Von Kleise and the two women who assist him with the plan understand the market psychology, thus all the “events” are planned for a single weekend in late October. October, the mystic month of stock market collapses helping to motivate investors to act and sell, combined with the sell order that the previously quite accurate Phoenix Letter added momentum to the sudden collapse. At the same time, these “Masters of the Universe” were locked into using the METIS programmed trading and risk analysis software that was overwhelmed by the negativity of all these “events” happening at the same time. The result is a massive sell off in the market and a sudden increase in the price of gold bullion.

We are already seeing warning signs from a slower growth in China and the European economy has barely recovered from the Southern European financial crises. Add to this the uncertainties with respect to Russia’s adventurism in the Ukraine, and you have all the ingredients in place for seeing the expected economic events highlighted in the novel coming true in the next two years — from collapsing energy and raw material prices to riots in Moscow demanding a free press and a democratic government and you have all the ingredients for a dangerous next two years. At the same time in some European countries continued economic issues spark the rise of more nationalist, right-wing parties adding to the uncertainty of companies and traders as to the economic vitality of the global economy.

So for some people who invest in stocks, this coming October may be a reason to sell off some positions just in case the curse of October returns to haunt rich and poor alike. As problems increase in the world — political, economic, and environmental — there is a specter of fear haunting the world greater today than at almost any time in the past decades.

The Phoenix Year is available in Kindle, eBook and in paperback: