2012 - Only a Financial Cataclysm?

Economists, fund managers and technical analysts rarely agree with each other. But if it is 2012, many of them seem to have a consensus. For them, 2012 spells only one thing - global meltdown in financial markets.

The present boom in the financial markets may come to an abrupt end in 2012, feels a Harvard University Economist Jeffery Frankel. According to him, the reason is very simple. He feels that markets move in from seven years of lull and seven years of boom. But in between these two phases the flow of money stops. 2012 is that year when there is a chance that liquidity from global emerging markets will get drained out.
The last time this happened was in 1997 when the Asian market hit the peak and there was a capital flight out of Asia. Before that in 1982, Mexico faced problems after the oil price crisis that was experienced by the country which affected the world. Due to fall in oil prices Mexico suffered heavily due to loss in revenues.

Technical analysts use the Elliott Waves to understand the movement of the markets. The Elliott model proposes that the market prices alternate between five and three waves and in a way represents fractals. These waves are based either on multi-decades to weekly patterns and are called as major cycles or minor cycles. According to Mr Arevalo we are touching the 'Wave V' in 2012.

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