Ponzi World (Over 3 Billion NOT Served)

The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.

Sunday, September 20, 2015

A Centrally Planned Collapse

Central Planners have set the stage for history's largest mega-crash

Given that the Fed is in a neutral or tightening posture with the stock market in an 8 month momentum decline, that implies a late cycle liquidity removal. The opposite of historical policy.

Add in the fact that stock buybacks are about to be suspended during earnings period. And the fact that large investors are pulling money from stocks at an unprecedented rate, with margin leverage having peaked and now declining.

All of which means that all sources of liquidity are being withdrawn at the same time, when liquidity support is usually being added...

The large blue box shows the period of Monetary expansion/accommodation, which ended one year ago:
52 week range of average S&P stock (red) with one year interest rates (black):

Weekly money flow:

NYSE Net Leverage. Peaked in May with the S&P:
Leverage Ratio (red) (left scale) = Margin balances - (Cash + Credit)