"Rational markets do not require any individual trader to be rational. In fact they work well under zero-intelligence" - Nassim Taleb
Speaking from experience I presume. What Taleb needs to learn is that there is no such thing as a rational market when greed is running hard. But there is zero intelligence in an irrational market, to be sure. Statisticians have no predictive insight into markets beyond telling us to put our heads in our own asses and then feign surprise...
There are two kinds of people right now - those who are selling crack, and those who are smoking crack. With the assistance of specious theories, random con men in the Finance industry have convinced the Idiocracy that no one can predict the inevitable:
A fiscal expansion (tax cut) coming at the end of a reflationary cycle will drive accelerated credit collapse. But don't take my word for it:
"If expansionary fiscal policy is pursued when the economy is close to full capacity, then the increased government borrowing is likely to cause crowding out"
"There is no means of avoiding the final collapse of a boom brought about by credit expansion" - Ludwig Von Mises
It was self-nominated genius, Nassim Taleb, who coined Wall street's favourite theory that idiots gambling in junk assets are infrequently prone to "Black Swan" events - which unfortunately "are totally unpredictable". Furthermore, when viewing mass idiocy in hindsight, vision is always 20/20. It was a best-seller on Wall Street, because without the imprimatur of that asinine theory, there's no way Goldman Sachs could sell self-imploding Collateral Debt Obligations to idiots, without garnering lawsuits. Enter bailout.
Now Taleb is back with his illuminations on Ponzi schemes:
ZH: Bitcoin May Fail, Which Will Prove That It Works
This bullshit contrasts slightly with Minsky's theorem that Ponzi collapse at the end of a debt cycle amid rising interest rates is INEVITABLE:
"over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance "if an economy with a sizeable body of speculative financial units is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make position by selling out position. This is likely to lead to a collapse of asset values."
In other words, this continues until shit breaks, and then it reverses with extreme dislocation. The more rapid the ascent, the more rapid the descent.
Speaking from experience I presume. What Taleb needs to learn is that there is no such thing as a rational market when greed is running hard. But there is zero intelligence in an irrational market, to be sure. Statisticians have no predictive insight into markets beyond telling us to put our heads in our own asses and then feign surprise...
There are two kinds of people right now - those who are selling crack, and those who are smoking crack. With the assistance of specious theories, random con men in the Finance industry have convinced the Idiocracy that no one can predict the inevitable:
A fiscal expansion (tax cut) coming at the end of a reflationary cycle will drive accelerated credit collapse. But don't take my word for it:
"If expansionary fiscal policy is pursued when the economy is close to full capacity, then the increased government borrowing is likely to cause crowding out"
It was self-nominated genius, Nassim Taleb, who coined Wall street's favourite theory that idiots gambling in junk assets are infrequently prone to "Black Swan" events - which unfortunately "are totally unpredictable". Furthermore, when viewing mass idiocy in hindsight, vision is always 20/20. It was a best-seller on Wall Street, because without the imprimatur of that asinine theory, there's no way Goldman Sachs could sell self-imploding Collateral Debt Obligations to idiots, without garnering lawsuits. Enter bailout.
Now Taleb is back with his illuminations on Ponzi schemes:
ZH: Bitcoin May Fail, Which Will Prove That It Works
This bullshit contrasts slightly with Minsky's theorem that Ponzi collapse at the end of a debt cycle amid rising interest rates is INEVITABLE:
"over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance "if an economy with a sizeable body of speculative financial units is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make position by selling out position. This is likely to lead to a collapse of asset values."
In other words, this continues until shit breaks, and then it reverses with extreme dislocation. The more rapid the ascent, the more rapid the descent.
"Central bankers are gingerly trying to take away the punch bowl without interrupting the party."
"The crowding out effect describes the idea that large volumes of government borrowing push up the real interest rate, making it difficult or close to impossible for individuals and small companies to obtain loans."
Meanwhile, the casino is already breaking as sheeple stampede to get in...
"The crowding out effect describes the idea that large volumes of government borrowing push up the real interest rate, making it difficult or close to impossible for individuals and small companies to obtain loans."
Meanwhile, the casino is already breaking as sheeple stampede to get in...
Stoned gamblers are ALL IN betting that a six sigma unprecedented blow-off rally continues forever:
If the Chinese internets implode overnight, it would look something like this:
The Rise And Fall of the machines:
"Dude, where's my yacht?"
Did I say this was a society of gamblers?
It's all a big joke now of course. Systems going down here there and everywhere on a daily basis, even as the melt-up accelerates. Nevertheless, as we've NOT learned in the past nine years, Skynet can't handle heavy volumes.
Ironically, the most extended stocks are the highest beta stocks, meaning the ones that fall the hardest when the market reverses.
These include all of the banks and brokers leveraged to fake reflation.
If the Chinese internets implode overnight, it would look something like this:
Volumes of course were similarly low in 2014 right before the oil rally imploded.
Good times.
Good times.
Which very quickly ended Ponzi reflation, and the high beta fake reflation trade.
No one will be laughing when this all ends. This time:
The Rise And Fall of the machines:
One of the abiding man-boy fantasies throughout this era, is that everyone will eventually lose their jobs to low cost automation, financed by 0% poverty capital. Profits will go through the roof. Supply Side Dumbfuck-o-Nomics taken to its logical conclusion.
The day that happens, will be the day that every shareholder realizes their holdings are worthless.
The day that happens, will be the day that every shareholder realizes their holdings are worthless.
But, let's let them figure that out for themselves. Because right now, artificial intelligence is rampant.
"Dude, where's my yacht?"
Did I say this was a society of gamblers?
