Contrary to popular belief, there are downsides to having the most corrupt people in society running the economy. Now we are going to discover those hidden costs. Sadly, herding is not a safe instinct for those aspiring to sub-par intelligence. There is no strength in numbers...
"Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative viewpoints by actively suppressing dissenting viewpoints, and by isolating themselves from outside influences"
Make no mistake, this is how it ends for the Roman Senate: When lying and corruption are the new "integrity".
For the MAGA Kingdom, recession is not an option, any more than reality, truth, or responsibility. Which is why today, never before in U.S. history, has so much effort been put into concealing recession. Trump's entire re-election probability is tied to the Dow, which is tied to Trump's re-election probability. Once the decline begins, it will death spiral lower, along with his approval ratings...
"Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative viewpoints by actively suppressing dissenting viewpoints, and by isolating themselves from outside influences"
Make no mistake, this is how it ends for the Roman Senate: When lying and corruption are the new "integrity".
For the MAGA Kingdom, recession is not an option, any more than reality, truth, or responsibility. Which is why today, never before in U.S. history, has so much effort been put into concealing recession. Trump's entire re-election probability is tied to the Dow, which is tied to Trump's re-election probability. Once the decline begins, it will death spiral lower, along with his approval ratings...
Senescence (/sɪˈnɛsəns/) or biological aging is the gradual deterioration of functional characteristics
Nature is merciful, to the extent that as people age they begin to lose their mental faculties and therefore become less aware of their inexorable decline. This society is exhibiting the exact same characteristics - it's wholly unaware of functional and cognitive decline.
What is extraordinary at this juncture is the amount of complacency attending the amount of risk. Despite soaring record economic policy uncertainty, we learned this week that Trump is a "lock" for 2020, based on the economy. There is a newfound denialistic narrative that we are "talking ourselves into recession". As always, the exact opposite is true - this is the biggest Jedi Mind Trick in human history. Why? Because for the MAGA Kingdom, recession is not an option.
The Faux News echo chamber demands that all true believers ignore any and all negative reports about the economy. Because they are all politically motivated:
Where this gets surreal - and proves the denialists wrong - is the unprecedented amount of combined fiscal and monetary stimulus now being applied to pretend the U.S. is not already IN recession. Never before in U.S. history has this amount of stimulus been proactively applied outside of a confirmed recession. It's all part of the "policy" of ensuring Trump wins the election. And based on Moody's prediction. So far, so good.
Is it irresponsible and asinine, yes. Is it doomed to fail catastrophically, of course. It's all driven by this abiding DisneyLand belief in consequence-free money. Free borrowed money, free printed money. Today's economists are now all drinking the Kool-Aid. Their credibility was sold to the highest bidder.
Aside from the chasmic fiscal deficit and record low long term interest rates, the biggest divergence from reality is in consumer confidence. Somehow consumers remain confident, even as retail sales are now rolling over. Everyone appears to believe that everyone else is out shopping.
The true Jedi Mind trick however arrives via the artificially levitated stock market. People believe that as long as stocks remain pinned to all time highs, then the economy must be strong. Of course, the exact opposite is true - as the economy weakens, stock gamblers become ever-more addicted to Fed dopium and therefore now view bad news as good news.
This below, is a late cycle "contrarian" argument, offered by a typical super dunce - surmising that if too many people see recession coming, it can't happen:
"Trade-war tweets, European Union concerns and U.S. recession talk have taken their toll, some claim. But if that’s the case, why are stocks near record highs?"
Free money and too many morons. Case closed.
First he data mines the Active Manager survey - data mining being the last refuge of ALL denialists.
Here is the long-term version. Which shows plenty of room for downside.
He then posts this chart from Google trends, as if to offer further proof that recession can't be happening as long as too many people see it coming.
Of course it didn't work out that way last time. It perfectly timed the recession AND the top of the market: December 2007.
Apparently we are now in denial of light refraction:
Of course it didn't work out that way last time. It perfectly timed the recession AND the top of the market: December 2007.
Apparently we are now in denial of light refraction:
Google Trends: "Recession"
His entire hypothesis is that all of the (smart money) sideline cash MUST come back to an insanely overvalued market and join the dumb money as we enter recession. Sadly, that is not how this ever works. His mistake is believing that today's cabal of groupthink morons is smarter than the insiders fleeing their own stocks at the highest rate since - 2007.
The question on the table for anyone who can fog a mirror, isn't whether all of this smart money will come back at all time highs (because we all know it won't). It's whether or not it will come back after the crash.
As it slowly did in 2009:
The answer to that question will depend almost entirely on what happens in credit markets. And of course, the rioting. And the free money bailouts - for serial con artists.
In summary, why are markets still at all time highs?
Because there are too many morons, to survive this round of natural self-selection. It turns out that herding is not a good instinct for those embracing sub-par intelligence. Believing there is strength in numbers.
