(Still) Livin' La Vida Loca

Time to step back from the hyperbole and gain some long-term perspective.  As we see in the market charts below, there have been three major bubble eras in the past 15 years, each driven by its own set of unique factors.  However, the one key driver and common factor to all three bubbles was highly accommodative monetary stimulus.  Stepping back and looking at the second (uncommented) chart below, it's impossible to deny that despite the ever-increasingly desperate interventions of global policy-makers, their efforts to paper over the cracks in the global economic foundation are losing efficacy.  The market level we are at now was first crossed back in 1999, when we were "Livin' La Vida Loca".  Looks like we still are...:

Of course, there are always those math challenged denialists who say that the U.S. National debt, now at $16 trillion, is not that high when compared to GDP.  First off, it's the highest it's been since WWII.  Secondly, the U.S. needs to borrow a trillion dollars a year just to keep the economy out of recession (i.e. 8% of the debt-sustained economy).  So the real question on the table, that no one from this comfort-seeking generation wants to answer, is how much would GDP be without the ongoing deficit?  Or put it another way that even math morons can understand - it's hard to pay down debt when the country is still borrowing.  Alternatively, we can assume like the esteemed "Economist" that only externally-owed debt matters and that Federal debt owed to Americans doesn't count, because it's money we owe ourselves.  Which is the same as losing one's job and taking a pre-retirement loan telling yourself it's ok, because it's just money you owe yourself.  Unfortunately, with that strategy, there's always the unpleasant adjustment to eating dog food in retirement.

So, until we get a definitive answer and solution to this problem of using ongoing borrowings to pretend to be solvent, then we can only assume that we are now just in the third sequential fantasy bubble phase that will once again end very badly, just like the last two.

Self-cannibalizing Capitalism - Last One Out Turn Off the Lights
I just finished reading Matt Taibbi's excellent article on Mitt Romney and all all I can say is "Wow".  Suffice to say, I would evince no sympathy for a jobless Middle Class dumb enough to elect a man who was at the vanguard of outsourcing the U.S.  Both Darwin and Ayn Rand would agree that any species that acts against its own self-interest, won't be in existence for very long, which means that the Idiocracy is now on borrowed time.  Meanwhile, the self-cannibalizing vulture capitalism model first went after the Middle Class, but now it's going after its own.  No surprise, that one company after another is reporting dismal earnings and revenue in this quarter, following four years of ephemeral outsourcing sponsored pseudo-growth.  The latest casualty on Friday was Apple which came in below earnings expectations and gave a dismal fourth quarter outlook.  Having just launched the MiniPad to limited fanfare, they are now working on the MaxiPad in hopes it will boost their flagging sales - at least with women.

There's A Price To Be Paid

Just tonight, another blatant example of the corruption and malfeasance that the Idiocracy seems to assume is just business as usual.

After the close, Amazon reported a less than stellar quarterly profit, so as one would expect, the stock was down after hours, but oddly it wasn't down that much.  According to the Efficient Market Hypothesis (EMH), stock prices instantly reflect all publicly available information, so it was odd that the stock was not down much more on the massive miss on earnings.  But then when I pulled up Amazon's chart, I was reminded that the text book "Efficient Market Hypothesis" is really just the "Corrupt Market Reality" (CMR), because apparently the market is so damn efficient that it priced in today's news, two weeks ago.  For those who have never heard of the "Corrupt Market Reality", it postulates that someone always knows more about a given stock than you do, and therefore owning stocks is a game for fools i.e. this chart of Amazon below is based on today's closing price prior to the earnings release.  As you can see, Amazon had been one of the best performing stocks all year, up until the end of this past quarter...

But more importantly, I leave this bread crumb for the masses at large, fat and happy on the couch watching The Kardashians or the latest Presidential game show debate.  Contrary to popular belief, there is a price to be paid for ignoring this ongoing corruption, and assuming it's just "business as usual".  

So let's review the mounting charges:

There's a price to be paid for ignoring Wall Street's ongoing corruption and pretending that 2008 never happened.

There's a price to be paid for invading other countries for their resources and to pump them full of junk food and junk culture.  The average hill billy wouldn't tolerate another government interfering in the U.S. for one minute, but thinks nothing of invading other countries at every opportunity. 

There's a price to be paid for electing phony corrupt politicians who promise to bankrupt your grandchildren to gain your vote

There's a price to be paid for watching Faux News and voting against your own economic interest, because you are too fucking stupid to understand what's in your own interest

There's a price to be paid for pumping your kids full of toxic waste junk food as you worship the false idol of "consumer choice"

There's a price to be paid for turning a blind eye as corporations temporarily boost profits by handing jobs and technology to foreign countries.  When is everyone going to correlate mass outsourcing with the fact that there are no jobs?  Even now the Idiocracy considers electing ex-Bain chief Romney as Outsourcer-in-Chief.

There's a price to be paid for Bernanke's Faustian Bargain which is implicitly subsidizing this temporary vacation from reality.

Unfortunately, for those who are STILL blithely ignorant at this juncture,  there is a steep price to be paid for all of the above "business as usual".  For most people, that price will be everything they have, and then some.

The Temple of Greed Is Already Collapsing

Unbeknownst to the Idiocracy at large, steeped in its junk food induced coma, the Temple of Greed is already collapsing, even as I write.  And also as expected, the media is equally oblivious at this juncture, because they don't really have an in depth clue about anything, and also because they are too busy covering that pointless sporting event known as the Presidential election.  In searching my usual sites today, I found absolutely no one pounding the table saying that risk was high.  Wall Street is equally oblivious, because they are face down in the Central Bank feed bag and otherwise making up every excuse in the book to ignore reality at this juncture.  So when I said before, that this time when the Temple of Greed collapses, those caught worshipping inside will be trapped.  Here is what I meant:

The Last Days of the U.S. Empire

When I say "days" I am speaking metaphorically of course, however, looking back in time, historians will mark the inevitable M.O.A.C. as having precipitated the steepest decline in global power in U.S. history.  At this juncture, the U.S. empire exists merely as a thinly veiled facade, therefore it won't take too much dislocation to reveal that the emperor has no clothes.

Humpty Dumpty

Humpty Dumpty Sat On a Wall,

Humpty Dumpty Had a Great Fall.

All The King's Horses and All The King's Men,

Couldn't Put Humpty Together Again.

Today is the 25th Anniversary of the October 1987 market crash, so everyone is piling onto the "it can happen again" theme.  

Yesterday, Art Cashin published his thoughts from that day, and just today, Bill Gross gave us his 140 character in depth analysis.

When I read Cashin's recount of that notorious day, there were a couple of key points that I found resonated with today's set-up.

The Failure of Democracy

What we are witnessing in real-time is the abject failure of representative democracy.  It's now abundantly clear to all but the most oblivious of comfort seekers, that global political dealers will not take any definitive action to resolve this ongoing globalized economic fiasco, until they are forced to do so.

Of course, by that time, it will be far too late.

M.O.A.C. (Mother of All Crashes) Is Inevitable

While the pollyannas of the day run around desperately trying to escape reality, let's review the facts so everyone can reach their own conclusion on what happens next.

It's abundantly clear what I think:   I believe that 2008 was just a warning and therefore the true M.O.A.C. is now overdue.  Given that nothing has structurally changed since 2008, we are now on sudden death borrowed overtime.   

That said, I have been wrong so far, which offers the pollyannas among us an ongoing glimmer of hope however tenuous...

The Last Bull Market: Bullshit

Having brought it up recently, I will now ground and pound my assertion that America's main export right now is .999 fine grain Bullshit.  Case in point, the only winner out of this impending election will be the advertising firms and media outlets that are raking in hundreds of millions of dollars from all of the disinformation spewing forth daily about the election.  Given that both parties and respective candidates are taking every precaution to assiduously avoid the truth regarding the nation's dire financial situation and eroding global status as a world superpower, one can only agree wholeheartedly with Ron Paul's characterization of the "One Party System".   Similarly, back in June, I pointed out that both Robama and Obamney are owned by their own base of special interest groups, assuring that regardless of who gets elected it will be all sides against the undefended middle.

Another Glimpse Into The Future

Just today, we were again rudely reminded how the multi-decade outsourcing bonanza has hollowed out the U.S. economy and left nothing in its wake but discardable marketing shells aka. multinational corporations.  The economy is now an illusion supported solely by the ongoing plundering of our children and grandchildren, all because this current morally devoid generation, will in no way accept responsibility for its past excesses; instead, rebranding all efforts towards fiscal sanity as the "fiscal cliff" which could bring a premature end to the pillaging of our grandchildren.

Liquidation Sale: Everything Must Go

Guess what made a new all time high today on massive volume...