Globalization is burying the Idiocracy one asset class at a time in broad daylight. This week, over-owned momentum stocks, overleveraged hedge funds, and European banks went under the bus. But they're still pretending it's not happening. They're in denial about being in denial.
The chart of the week:
Prior bottoms are circled (2002, 2009, 2011)
The Wilshire Total Market Index is down -14.5%
16 week moving average
"Don't panic. It's only a loss if you sell"
Globalization exists because the people at the top don't give a fuck that the people at the bottom are mired in abject poverty and have 0% upside. Quite the opposite, without poverty to monetize, they wouldn't be rich in the first place - it's a zero sum game. What we've learned from Globalization is that it's amazing how much patience one can have for failed economic models when you're not the one suffering. Billy Gates can wait forever to be proved right that "By any measure the world has never been better". Nevertheless, slowly but surely, the water line has moved higher until this year when the top 1% now have as much fake Central Bank printed wealth as everyone else combined. And yet it's still all "business as usual" in Zombieland. The Soylent Idiocracy is fully stewed in corporate junk food and junk culture, while game show hosts blow peddled fiction up their asses.
"Rome seeks its own glory, wars against other peoples to subjugate them, revels in material existence, lives off the work of slave labor, allows many to die of poverty and starvation, and promotes entertaining circuses and gladiator spectacle. "
The theme of the week, month, year, is the implosion of China which can no longer compete with the rest of the Third World. A fact in itself which should be setting off alarm bells within the profoundly self-absorbed iPhone Idiocracy. Never mind... European banks exposed to commodities and Emerging Markets are getting obliterated, while the biggest Hedge Funds are making leveraged bets on breaking the Yuan. Which will in turn break every risk market on the planet. It will be Lehman x 100, proving Lenin right that "Capitalists will sell you the rope to hang them with".
China, which makes everything we used to make, can no longer compete at $.80/hour, and now they have to devalue their currency. And in the meantime "we" tell ourselves that we're the "best cappuccino makers on the planet".
For the soon-to-be-bankrupt apologists for the status quo, FYI, below is what it costs to compete with China at $.80/hour in 2016. There's no free lunch at Walmart.
Globalization is the biggest failure in human history, and nothing else even comes close. Don't tell anyone, because as we see above it's still a secret. The dedicated denialists want to find out the hardest way possible, so they will.