Saturday, February 16, 2019

Freedom Is Not Abdication Of Responsibility

In a recent post, ludicrously arrogant climate inexpert Mike Shedlock reminds us that climate change is a mass conspiracy propagated by those of us lacking the wisdom to believe in our own self-interest. How nice would it be to pretend all of the world's problems away? If he were only the smartest man in the world as he believes he is, we could all go back to being a five year old...

In this rapidly decaying society, abdication of responsibility is masquerading as freedom, neglect as progress, plunder as wealth, and denial as wisdom. 

Shedlock invokes an assertion by George Orwell: "Freedom means the right to dissent with the majority, the right even to be persistently wrong".

Wrong. When presented with existential threat, this species no longer has the luxury to be persistently wrong. To be sure, several thousand years of being persistently wrong has led myriad fools to the same conclusion. Climate change is no longer some distant hypothetical that "might" afflict this planet decades from now, it manifests in the here and now in the form of biblical flooding, uncontrolled wildfires, monster hurricanes, and the fastest rate of species extinction in world history.

The financial costs alone of ever-increasing extreme weather events are racking up. For those who like to refute "hockey stick" charts, here is the inconvenient financial truth. The costliest hurricane seasons in the past two thirds of a century all came in the past fifteen years:


Here is what last year's California wildfires cost PG&E shareholders.


We are all of course to blame in some measure for embracing lifestyles that range from the cautiously frugal to those seeking the carbon footprint of a 747. I would like nothing more than to believe that untrained climate denialists are more intelligent than all of the climate scientists combined, if only through sheer single-minded belief in self-interest and quarterly profit. Unfortunately, quite the opposite is true. These people are in denial that the consumption oriented lifestyle is a dead-end for the planet and society. The cost of which is now measured in fentanyl suicides - the inevitable result of a consumption herd self-medicating itself to death.

The Soylent Green corporate "New Deal". 

Denialists now have their own false prophet promising salvation from responsibility. The sum total of the entire consumption denialist way of life: crass, phony, fraudulent, ignorant, illiterate, narcissistic, blighted, inhuman, and empty. A true alt-Christian. 

This week in a bid to save racist denialists from the brown horde, Trump was forced to subvert democracy further by declaring a national emergency at the Southern border. His entire presidency from the election to now has been a subversion of democracy delivered by election fraud, voter suppression, gerrymandering, borrowed tax cuts, and tax refund scams. 

"A kakistocracy (/ˌkækɪsˈtɒkrəsi, -ˈstɒk-/) is a system of government which is run by the worst, least qualified, or most unscrupulous citizens."

"Whatever the strong feelings we have about the superiority of democracy, without simple competence, its virtues over the autocratic alternatives are uncertain"

Freedom is far more responsibility than it is a god given right. Freedom can't survive in a consumption Idiocracy in denial of climate change, environmental desecration, human health and welfare destruction, and rapacious economic thievery on a scale never before imagined. Which means that climate change may well be the most distant threat posed by rampant denial. The more imminent ones being financial collapse, recession, healthcare crisis, food insecurity, and mass panic. Like all Third World refugee camps there is always a more imminent threat posed by neglect.

Freedom is not decadence and anarchy. It's not corporate apologists claiming the phony moral high ground that more is always better than less. What self-indulgent entitled jackass with the morality of a six year-old wouldn't want to believe that? Freedom is not embracing Darwinian economic models to the point of societal breakdown.

What Orwell and other previous philosophers feared most was attack from the outside. The external forces of fascism and communism. What they never imagined was the internal threat wrought by consumption self-destruction, brought about by Lost Boys carrying pigs' heads on a stick. The abdication of any and all societal responsibility.

Trump's entire platform is predicated upon the abdication of responsibility in every direction: environmental, economic, health and human welfare. The strip-mining of the future for consumption and profit in the here and now. His entire con job papered over with fiscal smoke and mirrors and misallocated capital. Had prior generations been this rapacious the U.S. would have collapsed decades ago. 

Be sure of one thing. The price of the desecration will be measured in carbon units. Hopefully enough to solve the problem(s). No clowns will be laughing when this circus ends. 

In Con Men We Trust

Unbeknownst to U.S. gamblers, Asian markets rolled over this past week due to the return of poverty-induced global deflation. Which portends badly for those of us celebrating El Capitan on Monday. The first inhuman president in U.S. history:

"He doesn't seem to be a human being, he just looks like a machine, he doesn't have any compassion," Vicente Fox told CNBC's Hadley Gamble.

The chart of the week is this one:

Speaking of trusting the inhuman, H&R Block has a new training module called the "So you got fucked by con men module":

"This year, agents also underwent “empathy training,” which included a “refund surprise training module”

"The new training included listening to a scenario where a client who received a $1,500 refund last year learned that she owed $575 this year...“Imagine how it would feel if you saw a really big tax bill; you’re not used to owing any money, and now you owe $1,500. And not a lot of people have that laying around”

"Or in the case of a smaller refund, agents are advised to say something like, “The smaller refund might be a shock this year, and I understand that, but the good news is that this money was actually in your paycheck"

But customer service training can only cushion the blow from an unexpected tax bill just so much. Michelle, a Long Island mother of two who asked to withhold her last name, was blindsided when her accountant revealed that she and her husband owe $3,000 this year – the first time that they have ever owed the IRS – after getting $8,000 back last year. “He was kind about it and offered us a cup of coffee,”

"Furious taxpayers are sharing their stories on social media in threads such as #neverowedbefore"

Speaking of misplaced trust, the vertical casino rally into the 90 day trade war deadline is no longer based upon an end to the tariffs but merely not an escalation:

The U.S. market was bid on Friday on these collapsing expectations, but Asia rolled over this week:

"China’s producer prices slow for 7th straight month, raising deflation fears"

Friday, February 15, 2019

Third World Revelations

The U.S. has now achieved all of the attributes of a Third World country: a Despot-in-chief, the wealth disparity of Africa, an economy continually strip-mined to the benefit of bailed out robber barons, and the economic mobility of a Powerball lottery...

What remains of the American Dream is the domain of mass deception and mass delusion. 

Ten years since the 2009 nadir, what have we learned? Some people like to learn the hard way:

The net effect of Trump's policies have been to turbo charge a late cycle boom, which will lead to a vastly more painful bust. His policies are the exact opposite of responsible economics, which prescribes counter-cyclical fiscal policy (surplus) at this point in the cycle. Somehow the vast majority of economists have bought into this ludicrously irresponsible CasinoNomic gambit. Meanwhile gamblers have been bailed out so many times they are are totally desensitived to risk. In other words the current economic "model" is predicated upon abject irresponsibility. Case in point, this latest stage rally is compliments of the Fed admitting that the cycle is over:

Jan. 31st, 2019

“This is one of the most dovish turnarounds by a Fed chair that I have ever seen in my 30-year career...“Talk about a Fed put"...referring to the idea that central bank policy makers have grown increasingly sensitive over the years to stock-market declines and stand ready to intervene in an effort to provide calm"

Today the rally continued on this "even better" news:

Gamblers are using the last cycle as an analog for why Fed neutrality is bullish, because the market continued to rally for a full year longer. However, this time around interest rate sensitive sectors are more closely aligned with the overall market unlike 2008 when they led the market:

At this stage, it should be abundantly clear to everyone that today's economists from academia, private sector, to government, are 99% proven idiots who can't be trusted. After 2008 they couldn't bring themselves to admit that their macroeconomic policies are a grand failure. Therefore, all are now merely extrapolating the recent past into the indefinite future. Meanwhile, today's CEOs are fixated on quarterly profit hence they are myopic at best and salesmen at worst. Which means that the de facto Idiocracy is flying totally blind. Into the ground.    

From a political standpoint, the obligatory delusion since 2008 has been to assiduously ignore how we got here. That way we can all pretend that the usual rules of U.S. capitalism still apply: tax cuts good. "Socialism" bad. Again, leaving aside the socialism for the rich - bailouts, money printing, and Ponzi borrowing that would have final shit canned this failed economic model ten years ago. We're learning how bad socialism is from people who don't even understand capitalism. 

Therefore, the parlour game of the day on both the right and left is to determine where feckless voters will stand on economic issues ahead of the 2020 election. Will voters swing to the left, the right or center. Of course it all totally depends on the economy, which means the stock market. The way it works is that if by some miracle stocks are up two years from now, voters will want small government and de-regulated corruption as usual. Of course on the reverse side when the crash comes, voters will want government to step in and bail them out again. In other words, the U.S. has neither capitalism nor socialism, it has a turbo-charged casino model with a make-believe safety net. A model that encourages risk taking over responsibility.  

All of which speaks to American mythology and the enduring fantasy of the American dream which at best is a dystopian delusion. At worst it's a massive con job that is using people up at an astronomical rate. About to go full Third World revelation. The lesson that should have been learned ten years ago when there was still a stimulus buffer between gamblers and the pavement.

Some people like to learn the hard way. There's no such thing as a "Fed put" when $200 trillion of global risk assets reach 100% correlation to the downside. 

"Broadcasting lies on the television screen
Trying to get us hooked on your American dream
Up on your games if you know when you'll win
When you cheated on your wife with your moneys and your scheme"

Thursday, February 14, 2019

The Trumptopian Implosion

The MAGA saviour has done everything "right" for implosion. I give him an A+ on the Bernie Madoff scale. The grand finale will be cataclysmic:

1) Collapse Chinese economy via trade war

2) Raise global interest rates via fiscal "reflation"

3) Explode budget and trade deficits to non-wartime record wides

4) Plunder healthcare to fund tax cuts

5) De-regulate Wall Street

6) Sponsor record stock buyback mania

7) Drive wealth inequality to 1929 levels via tax cut for the rich

8) Pull middle class tax 2019 refunds into 2018 to buy the election

9) Implode auto sector via steel tariffs

10) Implode housing market via higher cost of capital and lumber tariffs

But it's Trump's abdication of environmental responsibility that will be the nail in the coffin:

"Since my very first day in office, I have been moving at record pace to cancel these (environmental) regulations and to eliminate the barriers to domestic energy production, like never before"

Fast forward to yesterday:

"U.S. crude output is accelerating, highlighting OPEC’s dilemma as the cartel reins in its own production to revive prices."

The latest short-term energy outlook “puts the nation on track to set a new production record for a third consecutive year,”

EIA believes strong growth in global oil production will put downward pressure on prices"

"It isn’t your imagination, the oil market and the stock market have been moving together to an uncanny degree amid twin selloffs that sent both down sharply since their October highs."

 "the correlation intensified in December, hitting “a very high level” of 89.72%"


The Age Of Useful Idiots Is Ending. Badly.

Those who don't see it ending have served their purpose...

Senator Snake-In-The-Grassley:

Your plundered tax refund is not the point. The point is that we retained control of the Roman Senate. For which we are grateful to our reliable base of useful idiots. We wouldn't be in power without you: 

The latest desperate Banana Republican argument is to ignore the refund and figure out overall what was paid in taxes for the full year. 

So here we go with a typical example of robbing the poor to give to the rich:

The number of lies and frauds being propagated right now are insane even by Idiocratic standards. If we didn't know that useful lemmings are being herded off a cliff for the last time, this would be a vexing time indeed. National Enquirer had to become the official media outlet for the White House, because Trump can't trust the "fake" news anymore...

To say that history will not be kind to this Roman Circus, is an asinine understatement. 

Zerohedge and the entire post-truth media cabal are having a field day right now monetizing mass confusion. A few facts sprinkled in with toxic bile, the tried and true formula for Faux News. It's working great, because by all accounts, the denialists at large have not the slightest clue what's coming:

Case in point, today's December (Christmas) retail sales were so bad that the business media just decided to ignore it as "fake news".

After all, this is the greatest 'Conomy ever:

"The sudden and unexpected plunge in December's retail sales data raised new concerns about a recession, but economists also say the biggest drop in nine years clashes with other data and may be suspect."

Let's see, plunging retail sales, rising auto delinquencies, tanking housing market, earnings recession, plundered tax refunds. All of which clashes with Wall Street's universally bullish 2019 casino forecast, which is inconveniently turning into a pumpkin a mere six weeks into the new year. 

On the subject of lemmings off the cliff:  since the top last September, the casino has become progressively more overbought on each bounce. This being the most extreme rendition (middle pane). However, as was the case with all prior declines, in this rally breadth rolled over weeks ago, far ahead of the market.

Each decline has been more violent than the previous.

Which portends "unforeseen" mega crash:

This is volatility range expansion caused by months of conflicting and confusing market headlines:

U.S. Healthcare Cartel Causes Two-Thirds Of U.S. Bankruptcies

"About 530,000 American households continue to see their finances wiped out each year due to medical costs, according to the report"

"For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, copayments, and deductibles that illness can put you in the poorhouse. And even the best job-based health insurance often vanishes when prolonged illness causes job loss—just when families need it most."

No developed country in the world sees anywhere near this level of medical-related bankruptcies.

"I promise to repeal Obamacare and replace it with another tax cut for people like me"

"Never an honest word, that was when I ruled the world"

Wednesday, February 13, 2019

The Days Of Rage

Trump is considering whether or not to shutdown the U.S. government for President's Day. In order to prove for the record that he's the worst president in world history. You just can't make this shit up...

What's wrong with America in a nutshell is that the bailout class is void of conscience and intelligence. Too many free-money bailouts have cleaved them from any form of reality and accountability. I suggest the rage will accumulate over the course of this month, as the tax returns roll in:

This (above) is the now obligatory "Be happy you got your refund early even though you were told it was a tax cut" argument. Taxpayers should be grateful that a con man who has gone bankrupt several times is now managing their personal finances. The author of this brainless shite, being just another clueless frat boy moron, of the type that is rampant right now.

Which gets us to Wall Street.

And this last ditch attempt to revive the IPO market, by zig zagging through history's largest market mine field not the least of which is serial government shutdowns.

Where this gets interesting is that Monday is a casino holiday for President's Day of all things. The irony can't be overlooked.
"Wall Street is racing the clock to take six companies public before Friday [shutdown]"

Sadly, all indications are that Wall Street already missed their window of Ponzi opportunity by a country mile. Which does not bode well for record over-priced "unicorn" IPOs waiting to be dumped onto the public. The difference between Y2K and now, is that now companies remain private far longer during their fastest growth stage, so that founders can cash out for billions instead of millions. The only downside being that if the cycle ends, the companies go bankrupt for lack of access to funding. 

Which gets us to this last pump and dump rally. It appears to be led by a combination of the "safest" companies which I showed yesterday and by moonshots of internet junk.

Of the moonshots, here is the highest quality one, since it only has a P/E ratio of 175. At least it has earnings.

Workday is another example in the same (Cloud) space. This one loses almost half a $billion per year. Yes, you read that right.

"What bubble?"

What I call the "Harvard" sector:

"Our work is done here"

Since the tax cut, there have been four pump and dumps in the past year. 

This will be the last one:

"Some 7 million Americans are 90 days or more behind on their auto loan payments"

A recent Bankrate survey finds most Americans haven’t gotten a pay boost in the past year. October 2018’s average wage had about the same purchasing power as it did 40 years ago, according to Pew Research. As costs like health care and child care continue to increase, wages are struggling to keep up. Chief financial analyst Greg McBride at Bankrate says auto loan delinquencies are an accurate measure of financial strain."

On a % basis, the number of delinquencies is at a late 2007 level:

"The long-awaited earnings recession has finally arrived, but investors are still too optimistic and should anticipate more disappointment as the year drags on, according to Morgan Stanley."

Wilson was the most accurate Wall Street strategist tracked by CNBC in 2018"

Tuesday, February 12, 2019

The Silence Of The Circus Clowns

The Bush clown hammered them pretty good. The Trump clown will finish them off...

When it was clear that Trump had been cheating on his wives over and over again, his alt-Christian base were more than happy to look the other way. Now he's cheating them too. This will be a biblical lesson they can't afford to pay:

"I am unaware of anybody who has taken a serious look at Trump’s business who doesn’t believe that there is a high likelihood of rampant criminality"

"Don't trust forecasts or projections, especially from someone who has a financial interest in making those projections."

One year from fraud inception to fraud realization:

The spin machine is working overtime to explain away this epic con job. Most disinformers are explaining what a favor taxpayers got by receiving their refunds ahead of time. Without even knowing it was their refund. Other disinformers are fixating on the 8% average refund decrease, by way of ignoring the fact that a small number of people will get substantially larger refunds this year, offset by millions who will get no refund this year. 

Compliments of under-withholding sleight-of-hand:

One year ago (Feb. 5th, 2018):

Speaking of distribution of incomes. America's bailout class hasn't had this much share of wealth since 1929:

“U.S. wealth concentration seems to have returned to levels last seen during the Roaring Twenties” 

“America’s wealth inequality is not a permanent situation, but a temporary one because the asset bubbles behind the wealth bubble are going to burst and cause a severe economic crisis”

I couldn't have said it better myself. Then he includes this chart which shows fake wealth relative to GDP:

On the topic of one year anniversaries

Tech is finishing the right shoulder on a one year head and shoulders top:

Chinese gamblers have been in an ebullient mood coming back from their New Year celebration last week.

Aided and abetted by the Casino-Manipulator-in-Chief:

"When asked if he will meet Chinese President Xi Jinping at the end of March, Trump said, "Not at this point."

Nevertheless, this portends badly:

Meanwhile the weekly volatility profile is following the script from 2007/2008: An initial vol spike, followed by an overthrow high in the market to mark the top.

Followed by real volatility one year later. VolPlosion was one year ago:

Speaking of volatility, the low vol safe haven stocks are carving out a broadening top. Making new highs this week. Unconfirmed by every other market/index on the planet:

"In the broadening top formation five minor reversals are followed by a substantial decline."

It is a common saying that smart money is out of market in such formation and market is out of control."

The question NOT being asked by today's apologists for rampant fraud, is what happens to Ponzi GDP when workers re-adjust their withholdings back to historical norms and otherwise figure out that they got scammed and are now financially in the hole for 2019?

What happens then, is that the bailout queens now fretting over "socialism" will come to realize that without further bailouts their wealth is as fictional as their knowledge of history and economics. 

And then wealth inequality will be "fixed".