History's Longest (and most expensive) Vacation From Reality

The S&P 500 - Wall Street's primary benchmark, finally joined the Dow at a new all time (closing and intraday) high today. All it took was $6 trillion of OECD debt and $9 trillion of central bank monetizations. The truly pathetic fact of course is that the S&P is now only 2% above the peak it reached in March of 2000. However, the Idiocracy at large is willing to ignore all risk, all costs, all warning signs, as long as they can pretend that retirement and mall shopping can continue as normal...

The past 40 years of ponzi-style globalization was the longest vacation from reality in human history. It was fueled by computers, central banks, mass outsourcing, derivatives and greed - all of which were relatively recent inventions (except greed). Of course, the resulting historically unprecedented excesses culminated in the 2008 meltdown which would have put an end to the entire scheme. However, policy-makers saved the day by extending the vacation another four years. Basically we are now in a vacation within a vacation - from reality. This extension of course is costing orders of magnitude more per day than the original multi-decade boondoggle. And the bill has not yet come due; but when it does, the vacation will end and reality will come back with an uncontrolled vengeance. Granted, there are many who have lived the good life for so long they don't think it can end. Or at minimum, they think it's a fool's errand to try to predict when it will end. Suffice to say, the same imbalances and leveraged risks that led to 2008, are back again - because they never went away. So the real fool's errand is believing this can all continue, when everyone knows it can't...

Do That To Me One More Time

[Updated: April 11, 2013]
The streak has continued through Wednesday. Tuesday's reading was the second lowest in six years (Below are the lowest three P/C occurrences since 2006):

Previously, I had shown that the index put/call ratios were extremely low in the past 6 months. Over the past six years, combined, index put/call ratios were only below "1" fifteen percent of the time. In fact, instances of the ratio below "1" were once considered outliers. In the past three weeks there has only been one day when the ratio was above "1". Indicating speculators are now using index options to increase market exposure rather than to hedge. 

Meanwhile, IBD tells us that there have been no less than 6 distribution days on the S&P and Nasdaq since early March, meaning that institutions are selling hard into this rally. Volume is rising on down days and falling on up days. They know that earnings will be bad and earning outlooks will be worse...

The Richest Man In Babylon

The Days of Rage Are Approaching

ZH just published 21 key poverty statistics for the United States. 57% of American children live in a household that is economically marginalized. They live on the bread crumbs falling off the table. When the bubble bursts, that number will only grow exponentially given that most Americans are no more than one or two pay checks away from bankruptcy. The United States is at risk of devolving from a nation, into a failed historical experiment. Of course, should that occur, the resulting crater would subsume much of the rest of the planet as well.

Those who profess an undying faith in laissez-faire capitalism, should have kept their monster under control. Instead they let if off its leash to rampage across the planet. As long as someone else's children were the ones dying, the apologists never seemed to mind. Well, now the monster has come home hungry.  These Ayn Rand worshippers are now going to be silenced by their own self-cannibalizing creation...

More Brown Swans Flocking

Brown Swan Event: 
A highly predictable, in fact inevitable, risk event that everyone knows could happen, but conveniently assumes won't happen in their lifetime...[The full definition here]. In other words it's just another form of self-delusion that allows Baby Boomers to fool themselves into thinking that they are conveniently shifting risks on to the next generation. The same way they start wars that they don't have to fight, despite being the generation that invented burning of Draft cards. To wit, all recent Presidents have had no military experience despite involving the U.S. in the most protracted conflicts in U.S. history. It's a Milton Bradley defense strategy invented by Neocon dunces, none of whom themselves have any military background. The Military Industrial Complex of course is a major component of the U.S. Kleptocracy. I don't know how these Generals in the Pentagon looks themselves in the mirror knowing they have bankrupted their own country. Osama Bin Laden never dreamed that 9/11 would cause so much self-inflicted damage. History will speak of how one man inadvertently felled an entire global empire, by radicalizing Faux News and its comfort-seeking audience who saw terrorists on every street corner; and in every Home Depot, where after 9/11, I was stalked by a guy who apparently thought I was a terrorist buying a garden hose (yes, I am off-white).

Where was I...

Land of the Setting Sun

It's sad and pathetic what is happening to Japan, but it's a cautionary tale for any aging society that would rather repeat the same failed policies for twenty years straight than to face reality.

Last night (and again tonight), the Nikkei went parabolic, gaining 4% when the Bank of Japan revealed its latest "shock and awe" monetary easing campaign. Monetary easing hasn't worked for the past 20 years, but I am sure it will fix the economy any day now...

Refuting Krugman & Company - w/Third Grade Logic

David Stockman's rant was good, but it was too long and convoluted to capture the attention of the Idiocracy, which has the attention span of a coked up flea.

Below in about one page, I will easily refute the assertions of Paul Krugman and the myriad other thought dealers of our time who have convinced the Idiocracy that the status quo is indefinitely sustainable:

Ignore All Risk - And Live the Lie...

Let's see, the U.S. market (.SPX) is at the same level it reached in 2000 and 2007 when it topped. More importantly, the technical risk indicators, are lined up the same way (chart below)...

Europe's sovereign debt crisis - like the subprime housing crisis of 2008, is by no means resolved...

Geopolitical risks are as high as ever, with North Korea just now fully approving a U.S. nuclear attack, and having pulled out of Kaesong - i.e. both likely preludes to an invasion on the South. What better way to keep the U.S. out of the conflict, than to pre-announce a tactical nuclear counter-strike...

So aside from higher risk, what is the only other real difference between now and 2008?
Self-appointed thought dealers from Wall Street to Washington, are brainwashing us constantly to ignore all risk...

Icarus

U.S.K - United States of Kleptocracy

Kleptocracy, alternatively cleptocracy or kleptarchy, (from Greek: κλέπτης - kleptēs, "thief"^[1] and κράτος - kratos, "power, rule",^[2] hence "rule by thieves") is a form of political and government corruption where the government exists to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population, often without pretense of honest service...