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Robert Prechter on the Bullishness of an EU Breakup and the coming Global Deflation

­Welcome to Capital Account. Billionaire hedge fund manager George Soros says the EU is like a bubble and authorities will not be able to meet the demands of the market coming up. It doesn’t keep Eurocrats from pushing for new master integration plans. But are they doomed to fail when the mood is this negative? Was the very formation of the EU made possible by a secular bull market and the psychology that accompanies it? We are talking about bull market  mania. RobertPrechter, founder of Elliot Wave International, joins us to explain.

Meanwhile, an MF Global trustee takes aim at Jon Corzine in a report. The trustee says he may sue the former CEO, as well as other MF Global executives for negligence and breach of fiduciary duty. And the New York Times reports Bank of America’s top executives and those meant to police them are likely to catch heat following revelations about the bank’s bad behavior during the financial crisis. Does bear market psychology mean we’ll see more aggressive attempts to hold bankers accountable?

And is the downturn in the Dow a harbinger of a major economic contraction ahead? What can the stock market tell us about social mood, and what is the likelihood that we could be staring down the barrel of another recession? Again, Robert Prechter of Elliot Wave International will give us his take on today’s show.

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