Tuesday, July 30, 2013

Collapse-O-Nomics: The Idiocracy's Grand Plan for Collapse

First, a word from Dr. Bernankenstein the high priest of the Dow Jones Industrial Average. Tomorrow he will render his decision as to how much and for how long additional monetary dopium will be printed out of thin air to further lubricate Wall Street - already the wealthiest country club on the planet.  Markets worldwide wait with baited breath...

The Ultimate Fool's Rally

[Updated: July 30th, 2013]
Cheap Fed Money Has Fueled Three Asset Bubbles In a Row
According to the Bank for International Settlements (BIS), current policies are "retarding" reforms:
"The "borrowed time" central banks have created with ultra-low interest rates following the collapse of Lehman Brothers in 2008 has not been well used". 
Here is how that borrowed time was not well used:

> Another $7 trillion of U.S. debt was added ($100k/household)
$33 trillion of global debt was added (pg. 7)
> The total number of global billionaires increased by 27% as global poverty increased
> Global Central Banks artificially inflated the largest liquidity-driven asset bubble in history, with no comparison to the amount of leverage now in the financial system
> Wall Street was given a free pass for the events of 2008, assuring a repeat
> Wages declined across the developed world as millions more jobs were outsourced
> Corporate profits were outsourced to the highest level in U.S. history
> European debt markets were artificially levitated by carry-trades while debt and unemployment exploded
> New housing bubbles were created across the developed world
> Politicians worldwide were given a free pass to do nothing other than talk and campaign constantly
> The Dow was artificially inflated to a new high to keep the Idiocracy distracted while being bent over the log 
> Financial market volatility was artificially dampened making risk management impossible
> Zero interest rates forced pensioners to amplify their investment risks
> Investors were lulled into an overwhelming state of complacency, yet again
> Four more Davos Summits, while the world's poor slid further into the abyss...

On the other side of a much deadlier collapse, the Idiocracy will re-awaken from its narcoleptic Kardashian-watching food coma only to realize that what remained of their wealth, income, and employment prospects after 2008, has been sold off in the meantime - replaced only by a massive invoice for amounts due...doh !

Friday, July 26, 2013

Phony World

I could have called this blog "Phony World", since artifice and superficiality are the predominant themes of the day. For a society with an overwhelming aversion to reality, it should come as no surprise that how things look is far more important than how they are under the surface. Only in a society so desperate to be deceived, could globalization, aka. history's largest ponzi scheme - operate in full view without any opposition.

Your Corruption Smells of Destruction
This society's ultimate undoing will be the fact that it turned a blind eye to Wall Street after 2008. Zero reforms whatsoever and then making a mockery out of Occupy Wall Street. Fatal mistakes...

Thursday, July 25, 2013

Hindenburg Clusterfuck 8.0

Advice from Wall Street: 
BTFD - "The Most Overbought Market Ever"

Today was yet another Hindenburg Omen - the eighth one since April 15th. This unprecedented cluster shows the unbelievably manic, fragmented, and overbought nature of this market...

Wednesday, July 24, 2013

ALL Ponzi Schemes Collapse. Suddenly and Violently.

The broadest definition of a ponzi scheme is ANY business or economic model in which the underlying capital structure is in the process of being liquidated as income. Once the growth of new "investors" stalls and reverses, collapse comes quickly as everyone realizes that the money is already gone...

Monday, July 22, 2013

Surviving A Deflationary Crash

Way back in 1929, no one seemed to notice that commodities had peaked several years earlier. They also didn't pay too much attention to the fact that bonds had peaked a year earlier as well. Stocks continued ploughing ahead on their own as if they could never go down again. Then, seemingly out of the blue, they crashed, losing 90% of their value by 1932...

Sunday, July 21, 2013

Over 3 Billion NOT Served

As of now, the richest 200 billionaires have more combined wealth than the poorest half of humanity (3.5 billion people).

At this manic juncture, anyone who is still making apologies for this godless globalized ponzi scheme, or otherwise having sold their soul to it, deserves their overwhelmingly certain fate. It's time to flush this shit show down the toilet of history...

Blow-Off Top

If we want to know whether or not the animal spirits are flowing and hence driving towards a blow-off top, we have to look under the surface of the market. When we noticed the solar stocks making parabolic moves back on May 20th, it turned out to be a very good sign of that (temporary) top which occurred just 2 days later. Now, once again, there are an abundance of junk and speculative stocks making parabolic moves... 

Saturday, July 20, 2013

Drive This Fucker Into The Ground

Anyone who wants to see a final end to globalization can thank dunced policy-makers for doing everything possible to accelerate its collapse. The de facto policy of "Extend and Pretend" is doing serious underlying damage to the world economy, even as global policy-makers fiddle fuck around rearranging the deck chairs on the Titanic. The ultimate meltdown will merely bring acknowledgement that the status quo already buried the economy. I'm trying to think of what else they could do to hasten its demise, but nothing comes to mind...

Friday, July 19, 2013

The Scylla and Charybdis of Interest Rates and Deflation II

Detroit's bankruptcy yesterday confirms that the rise in interest rates is taking its toll on the marginal borrower, as Minsky (or commonsense) would predict. Detroit is merely the canary in the coal mine, similar to the various bankruptcies leading up to Lehman - Bear Stearns, New Century, Fannie, Freddie, Washington Mutual etc. The Idiocracy greeted the largest municipal bankruptcy in U.S. history as an excuse to buy more stocks - the most they've bought since just before Lehman collapsed in 2008. You can't make this shit up...

Thursday, July 18, 2013

Are You Willing To Lose It All?

That's what I ask myself whenever I am tempted to capitulate on my bearish views and otherwise accept the bubble fantasy that defines the status quo. I consider the fact that everything is now at stake because Central Bank alchemy has caused literally all aspects of the global economy to be 100% correlated. Meanwhile, as was pointed out this week, on an inflation adjusted basis, the Dow has made literally no progress since the year 2000 - thirteen years ago. And as I said recently, this isn't a fucking mystery novel. We know with 100% certainty how all of this will turn out. Meanwhile, an investment in short-term treasuries only trails the dividend adjusted S&P by ~15% since 2007 - with the market now at all time highs, yet the 2008 loss in stocks exceeded the loss in short-term treasuries by 50%. Just something to keep in mind as we are constantly bombarded with "the market is at new highs" bullshit...That propaganda is strictly to suck as much money in as possible before once again heading straight back down into the all too familiar abyss...

For those who say that Treasuries are not safe at this juncture, I addressed that issue in "Deflation v.s. Hyperinflation". We are now in the phase wherein interest rates are rising which will bring about the Minsky Moment as marginal borrowers are shut out of the credit markets...

Wall Street LOVES Bernankenstein

Yesterday Bernankenstein said that Wall Street has NOT benefited more than Main Street.

Unfortunately, Quantitative Easing is merely a Jedi Mind Trick designed to:
> enrich billionaires 
> give corporations more time to ship jobs offshore
> give the masses more cheap money to bankrupt themselves
> temporarily inflate 401k balances allowing the Idiocracy to focus on ESPN/American Idol
> and give politicians cover to do nothing while the real economy deteriorates...

Wednesday, July 17, 2013

Dawn of the Dead

[Updated: July 17th, 2013]

"Karl Marx said it right, at some point capitalism can self-destroy itself, because you cannot keep shifting income from labour to capital without not having an excess capacity and a lack of aggregate demand. And that's what's happening - we thought that markets work and they are not working...every firm wants to survive and thrive and thus slashing labour costs even more. My labour costs are somebody else's income and consumption. That's why it's a self-destructive process."
- Dr. Nouriel Roubini

Tuesday, July 16, 2013

The Globalized Ponzi Scheme Is Already Deflating

Current policies are merely obscuring the primary deflationary trend by elevating asset prices. The underlying trend of deflation is occurring relentlessly in the background. In the end it will lead to mass unemployment and mass bankruptcy across the developed world.

Right now, we are still in the debt accumulation phase, however each dollar of new debt is having less and less impact on economic growth. The consumption-oriented lifestyle is already deflating...

Monday, July 15, 2013

A Generation of Glassy Eyed Buffoons

Every time I turn on the television I am confronted with a never-ending discussion on the Snowden/NSA situation, or worse yet, the Zimmerman/Martin pointless diversion. This is the preoccupation of the Baby Boomers, who like to talk everything to death while the issues that really matter get worse in the background. With respect to the NSA "leak", only a totally morally bankrupt generation would start out demonstrating for its right to more civil freedoms and then later in life preoccupy itself with taking freedoms away from the next generation. The same generation that burned its draft cards and protested Vietnam, has now devolved into hypocritical right-wing war mongers - Bush, Cheney, Rumsfeld, Obama, Romney - the entire Neocon pseudo-patriotic "think tank" - no combat experience whatsoever...

Friday, July 12, 2013

Rat Race Into Oblivion

The Idiocracy is bounding merrily towards its own oblivion. The masses at large are totally ignorant as to how most people live on this planet. As long as the status quo is working for them, then they don't really give a fuck whether or not it works for anyone else. Unfortunately, these self-absorbed masses are equally ignorant of basic economics. and therefore hurling themselves at the brick wall of reality...

Thursday, July 11, 2013

The Idiocracy Is Paid To Look The Other Way

Never before have investors been so heavily incentivized to ignore risk. Between zero percent interest rates pushing savers into stocks or the $9 trillion+ of Central Bank monetary stimulus for speculation with its corresponding collapse in implied options volatility, financial precaution has been duly punished. Looking back in time, the masses at large will wonder how the hell they ignored the ubiquitous signs of risk. Realized volatility has already been rising for weeks across all other asset classes - commodities, gold/silver, bonds, emerging market stocks. Really only developed world stocks (to varying degrees) have been spared...

Monday, July 8, 2013

What Could Go Wrong II

Wall Street's Con(fidence) Game
Stock price targets are going up at the fastest rate in two years while earnings estimates are going in the other direction...

Sunday, July 7, 2013

Terminated By Skynet II

The first leg of my bearish stance has always been an abiding skepticism that monetary stimulus can substitute for sustainable organic economic growth, indefinitely. There is no doubt that a lot of jobs were created in the past four years, they just all happen to be in China.

The second half of my thesis has been that HFT bots thrive in the artificial drip-levitation conditions created by the Central Bank monetization programs, and that any high volume asset re-allocation would lead to a massive failure of the market making system...