Thursday, April 14, 2016

Compounding Insolvency: The Stock Market Has No Value

What's the next trick? HINT: There isn't one...
The current valuation of every stock market is a direct indication of how many people can be conned. Straight from Wall Street:
"A lot of what you do see in terms of the profit growth is engineering," such as stock buybacks and global labor arbitrage"

Joe Kernen: "See, I knew we're exceptional"

"In the final phase, corporations put themselves out of business. To make the quarter"

Gamblers are trading worthless pieces of paper back and forth pretending to be wealthy. Forward P/E ratios have as much veracity as horoscope predictions. Stocks only go up now when a greater fool can be found.

Globalization is a failed experiment in taking greed to its maximum self-cannibalizing dead-end i.e. the monetization of poverty at 0%. The Faustian Bargain. Corrupt dunces will be surprised to learn that there's no free lunch at the end of the fucking rainbow. Modern Finance has by necessity devolved into an asinine exercise in compounding insolvency into the indefinite future, assuming full dividends. Central Banks are just bailing out the Titanic.

Failed Monetary Policy is a symptom, failed trade policy is the problem. When corporations outsourced supply, they outsourced demand. The stocks that represent these hollow marketing shells, have no intrinsic value. Globalization separated Supply from Demand. It put Supply in one locale without purchasing power, and Demand in another locale without income.

In a true economy, Supply IS Demand. And vice versa. 

No amount of financial alchemy can repair this immutable fact. Central Banks have squandered ever-more gasoline to stoke a dying fire that has no more economic fuel. They're bailing out the Titanic.

This will be a lesson for the Ages...