Wednesday, November 1, 2017

Global Synchronized Ponzi Scheme

"There's a lady who's sure all that glitters is gold, and she's buying a stairway to heaven"

As long as this unprecedented stretch of record low volatility continues forever, this will all be fine...

The weak link in this daisy chain of idiots is the trillions in ponzi capital circling the globe pumping up risk assets and moving overnight to the next bubble. Unfortunately, the only yield in a world of collapsing demand and ever-growing supply comes from levitating risk assets on minimal volume and volatility - generating a bubble of unprecedented and fragile proportions. But don't take my word for it...

"It used to be that when America sneezed, the world caught a cold. This time around, it’s the risk of a sickly China that poses a bigger threat.

Total borrowing climbed to about 260 per cent of the economy’s size by the end of 2016, up from 162 per cent in 2008

That path may be what prompted outgoing People’s Bank of China Governor Zhou Xiaochuan to warn of the risk of a plunge in asset values following a debt binge, or a “Minsky Moment,” earlier this month." 

The role of the lamestream media is to propagate the fantasy that this is the permanent fake wealth plateau - extending as far as the eye can see. Ponzi economics is predicated upon mass delusion which demands the extrapolation of the impossible into the indefinite future. And what other way to do that than to construct a fantasy narrative to Never Never Land. Enter the corporate stooge media, and oh they do it so very well. 

The fake meme du jour is that of the "global synchronized recovery". The historically colossal end-of-cycle lie that propels risk assets up the stairway to heaven where all that glitters is gold. And no surprise, the IMF has fabricated this delusion even though the whole is about 10x greater than the sum of its parts. Adding up Minsky China, the IMF-admitted slowing U.S., the permanently moribund Japan, and the commodity constrained Emerging Markets, we're left with Europe as the primary driver of growth. Once again, the IMF is merely chasing asset bubbles around and reverse engineering GDP from over-valuations. The "If we buy it they will come" fantasy strikes again. But it gets far worse, because even the IMF just admitted that the entire world is now one colossal impending Minsky Moment with volatility as the hair trigger. 

All of which means that we should assume 3.6% growth this year, with depressionary downside of +/-30% on 10 milliseconds notice.

Waiting until the crash to put your seatbelt on is not the best strategy. 

And now back to the casino, after-hours Wall Street just shit a brick when Zuckerborg issued this heretical statement on the Facebook earnings call regarding the Russia fake news scandal:

“I’ve directed our teams to invest so much in security — on top of the other investments we’re making — that it will significantly impact our profitability going forward, ”

"Protecting our community is more important than maximizing our profits."

"What the fuck did he just say?"