A Jedi Mind Trick For The Idiocracy

Central Bank Programs and American Idol Merely Conceal the Burgeoning Collapse...
Central Banks across the developed world have been attempting to use monetary liquidity to prevent the inevitable convergence of our standard of living with that of the Third World. Of course it's a futile task and suffice to say, that adjustment would have already taken place after 2008 if they hadn't intervened to prop up asset markets. Unfortunately, once the developed nations took the easy path of trading with countries that have no labour or environmental standards, the (downward) convergence in standards of living became inevitable. It didn't help that the developing nations suppressed their own currencies and otherwise recycled their profits back into developed world debt in order to sustain their competitive advantage, however artificially. All that strategy did was to temporarily subsidize our lifestyle gap while our nations' debt balances accumulated steadily. Of course, this strategy of using Central Banks to levitate the financial assets, even as workers and consumers fell ever further behind the solvency curve was a fool's errand of the highest order. It had no chance of ever fundamentally rebuilding the economy, much less generating inflation. All the money flowed straight into the stock market.

At this juncture it's important to see past all of these Central Bank interventions that are merely sound and fury signifying nothing. When viewed in the context of the long-term trend in wages and core inflation, it's overwhelmingly clear that Central Banks lost the real battle a long time ago...

Keeping Up With the Dow Jones's

EWI pointed out last night that the Dow made a new multi-year high of 14,100 yesterday - the highest level going back to 2007, albeit still slightly under that year's high of 14,200. The high was unconfirmed by all of the other major U.S. indexes. Apparently, at the last major top in 2011, the same situation occurred - the Dow was the last index to top out. So, to recap the current set-up, the Nasdaq outperformed through last September, then the Russell 2000 small cap took over and outperformed until last week, now the Dow is leading...This article said the exact same thing yesterday, that large cap dividend paying stocks (i.e. the safest) are now outperforming the rest of the market. Which means only one thing - that all other asset classes are exhausted, so investors are clinging to the least risky risk asset left - dividend stocks...

"Greedometer" flashing red (7900 out of 8000)

Meanwhile, from a guy named "Jeff Seymour" who has been studying all of the various factors that lead to market crashes, his "Greedometer" is flashing red. His factors are: the Vix, the economic leading indicators (WLI), insider selling, profit margins, # of selling climaxes (new highs/reversals), advisor sentiment, margin debt, and the put/call ratio. The maximum possible reading is 8000 and the index is currently at 7900 - the same level it hit in 2007. The bottom line is that contrary to CNBS and all of the other infotaintment spewers, there is no new bull market underway, just a new market for bullshit...Full story here.

Maximum Greed: History Will Not Be Impressed

Today Sheila Bair, a Republican and former chairwoman of the FDIC, penned her own albeit meek diatribe against crony capitalism (below). Upon reading it, I was left with only one question that apologists for "the system" that allowed greed to be taken to its full self-cannnibalizing extent, will be held to account for on the other side of this fiasco i.e. was this inevitable? Was it inevitable that the American middle class would be eventually marginalized into oblivion to the point of being derided as "socialist" for accepting food stamps to feed their children? Because if it wasn't inevitable, then the beneficiaries of this catastrophe need to cough up their ill gotten gains from pursuing the rent seeking "activities" that led the U.S. to this  economic dead end. If it was on the other hand inevitable, then capitalism itself has a lot to explain, as to whether any sane nation would want to pursue this model. And suffice to say, it would be a hell of a lot easier for the Lost Boys of the Idiocracy to defend their deluded fantasy that the country's economic malaise is due to the laziness at the bottom, if it wasn't for the fact that corporate profits as a % of GDP are at a 70 year high and wages as a % of GDP are at a 70 year low, and there is a distribution of wealth that would make John D. Rockefeller blush. Of all the "unsustainable" aspects of this Ponzi model, nothing is more unsustainable than these historically enormous profit margins, something Wall Street is going to learn the hard way. And I've heard some dunces on the right call food stamps a social program. Allow me to clarify - a social program gives people the comfort of knowing that their country is looking out for them. Food stamps by contrast, are merely tokens to keep the heavily armed and increasingly enraged masses at bay long enough for the wealthy to make alternative living arrangements...

The Last Pump and Dump

Heavy Distribution - A Net Month's Worth of Selling Already...
Whatever conviction the market lacked on the upside, it is already more than making up for on the downside. Look at the lower volume pane where four up days with volumes below 100 million, including Feb. 12th's insanely low 65 million, have now been offset by four down days with volumes above 150 million, culminating in today's 245 million. As of today, total down volume exceeds total up volume on a daily cumulative basis going back to January 22nd - despite a ratio of 14:10 up versus down days. So even though it has only been four days since the market made a six year high going back to 2007, we've already seen a month's worth of selling camouflaged by the fact that the market rose more on its up days than it fell on its down days despite volume being higher on the down days. That's what professional traders politely refer to as "distribution" aka. institutional investors unloading large amounts of stock onto small investors after a big run-up...

Ceteris Non Paribus: Everything Is Not Equal...

Ceteris Paribus: Latin for "all else being equal". What it really means, in the context of an economics lesson, is that there are millions of variables, but ignore all of them except for these two... At that point, any independent thinker hunkers down for an hour lecture consisting of being showered with assumptions-based bullshit. Likewise, when our esteemed econo-leaders such as Paul Krugman speak with certainty about uncertain things, any amount of humility would require them to admit that there are an unknown number of factors that affect the global economy...

Living Large In the Third World

No developed country has greater concentration of income and wealth and yet constantly derides its working class as moochers and "takers", as the U.S. I can tell you how it works in the other developed countries, because I've lived in a few - no overfed RomneyBot at the top would dare disparage the working class and be fully intact by the end of the day much less run for office. People know who does the dirty work in the real economy. The days when the vulture capitalists can milk the U.S. middle class with impunity, are coming to an end...

http://en.wikipedia.org/wiki/Gini_coefficient

Buried Alive By The Globalized Ponzi

While we wait for this lurching clusterfuck, euphemistically called the "globalized economy", to collapse in on itself like a cheap tent, below I recapped the central themes of this blog. When the Idiocracy catapults itself into the brick wall known as reality yet again, my days of blogging will be over. Soon, even the Captains of the Idiocracy will be forced to acknowledge the overwhelming disaster they have created, at which point the only place they will be safe will be Antarctica...

A Village of Idiots

As we would expect at this juncture, the self-nominated "best and brightest" are providing great spectacle with their war of words and infotainment, all while the real risks simmer in the background, wholly unnoticed by the Idiocracy and the mental midgets running the U.S. and global economy. The latest diversion from reality, is a feud between Paul Krugman and Joe Scarborough that started when Krugman stated on "Morning Joe" that the Social Security\Medicare crisis should be ignored until the day the programs collapse around 2025. Brilliant !  Milk the system for all it's worth and then bury the grandchildren under a mountain of debt ! How did we get so lucky to have this kind of thought leadership?

The New Wall Street: Lipstick on a Pig...

I spent the evening in the local mega-bookstore. In additional to learning about every other subject under the sun, I searched high and low for any confirmation that the global economy was in the least bit of jeopardy. I found scant evidence that there is the least bit to be concerned about. Apparently, everything that wasn't done after 2008, is still working out just fine. Oh right, until I came across this article in The Atlantic informing us that Wall Street is doing the exact same things, only under a different name...

Peak Irresponsibility

I'm reading some pretty fucked up and mostly mutually conflicting global disaster "theories" these days. The wheels of motion are spinning so fast across their multitude of axes, that everyone and their dog who isn't fixated on American Idol is now grasping for theories as to how, why and when this entire shit show is going to come flying apart...