Thursday, September 13, 2012

Ponzi Supernova

The Global Ponzi is going supernova in every direction - geopolitical, economic, domestic politics, socio-cultural - you name it.  In every direction, the extremes of reasonability are being tested to the maximum.  And why wouldn't they be given that the same brute force strategies that worked this far, are being recycled over and over again, each time with more assertion.  Nowhere is this strategy more apparent than with the "alpha males" who sit atop most corporations and nation states.  These are men who bulldozed their way to the top not with talent or insight or wisdom, but with pure aggression and determination.  Of course, this type of behaviour is not new, but what differentiates this era from all previous is that this has been the longest uninterrupted economic expansion in human history.  It has also been one of the least volatile due to the massive over-use of fiscal and monetary stimulus which has artificially smoothed the business cycle and otherwise unduly rewarded leveraged financial strategies and risk taking.  Contrary to ingrained popular belief however, each passing day of massively accumulating economic imbalances only makes the model less stable and less sustainable.

Careful What You Wish For
In most other periods in history, historians have had to parse the tea leaves to divine the underlying motives for various actions and events.  Not so, this era.  The Idiocracy is blunt and crass about its motives.  Probably the most cynical recent example was the hanging of Saddam Hussein in 2006 for gas attacking Kurdish civilians during the 1980s Iran/Iraq war, during a time when he was being actively supported by the U.S. military and using mustard gas procured from the U.S.  And his primary liaison with the U.S. during the Iran/Iraq war was Donald Rumsfeld working for Reagan and then became Secretary of Defense under George W. Bush....Therefore, given the prevailing level of cynical transparency of motives, it's in no way difficult to predict the future course of events (beyond the immediate timing), because it's clear that the Alpha Dogs at the top only know how to keep doing the same thing over and over again until it fails catastrophically.  Consider the U.S. war in Afghanistan.  The 1980s Soviet fiasco in that region was still in living memory, the CIA having been a catalyst in the outcome of the war.  Yet, that factoid didn't stop U.S. war hawks at the behest of the Neo Cons from blundering straight into it, with hardly a second thought.  And what the hell happened to the "Powell Doctrine", Colin Powell's post Gulf War checklist for going to war?  In historical terms, that "suggestion list" had the shelf life of about :15 minutes.  Powell was Bush's Secretary of State at the initiation of both the Iraq and Afghanistan entanglements, yet almost every tenet of his self-named doctrine was (and still is) violated.

The Obvious is not Obvious to the Idiocracy
The latest example is Netanyahu in Israel.  Here is a guy who on paper and on TV thinks and acts like he is the smartest guy on the planet.  He puts on a hell of show, I have to admit.  Yet, for all that, he is a clueless fucking moron - a danger to himself and everyone around him.  Even today, as U.S. embassies are lighting up across the Middle East like the Fourth of July, Netanyahu is doing his level best to corner Obama and otherwise coerce the U.S. into backing Israeli action in Iran.  This is the latest careful what you wish for moment.  Apparently the brilliant Netanyahu doesn't realize that Iraq and Afghanistan are still smoldering embers just waiting to burst back into flame at any moment.  He also doesn't see the connection between a desperate Syria, cornered Iran, and otherwise melting down Arab world in need of a common enemy at which to direct society's growing pent up rage.  A Democrat-leaning friend (also Israel supporter) just told me that he agrees with the consensus (on the right) that Obama is anti-Israel.  To which, I said that George W. Bush who started two lingering conflagarations in the region and embraced Israel purely out of Born Again Messianism, was no friend to Israel.  But apparently that history lesson playing out in real time, is still not obvious.

Bernanke - World's Greatest Alchemist
Finally, back to my favourite subject the illusion-formerly-known-as-the-economy.  Mitt Romney, yet another alpha male who outsourced his way to the high life, in a fit of terminal dumbness, made the comment a few weeks ago that he would fire Bernanke, if elected.  So guess what Bernanke just did today - he lit a fucking fire under the stock market to the tune of over a trillion dollars of new funny money, which (in theory) guarantees Obama will get re-elected.  Apparently, Romney hasn't picked up on the obvious fact that Obama's popularity ratings are 99% correlated to the stock market and that (short term at least) Bernanke controls the stock market - duh !!!  And I say this is all in theory, because Bernanke, is this era's ultimate example of an over confident fool who has convinced himself (and most everyone else) that subsidizing financial speculation over and over again, carries no risk.  Monetary stimulus inflated both the DotCom bubble and the housing/subprime/Lehman bubble and here we go again it's inflating yet another massive disconnect between economic reality and fantasy.  In each of the prior cases, the economy and markets barely survived, yet somehow this South Park addled society didn't get the fucking message and therefore needs to be wiped out entirely before it learns the lesson once and for all.  There is no free lunch.  

All of this shit show is again, packaged under careful what you wish for, because all of these Neo Cons, Corporate CEOs, Wall Street hedge fund managers, Central Banksters and political con men are just alpha males doing what got them to the top i.e. the same thing over and over again, each time with more force...until such time as it blows up in their faces.  And biologists will be the first to tell us that in a "game changing" adverse scenario when the societal deck gets shuffled, alpha males are the least resilient, presumably because they are not used to stress - having delegated that artifact of success down to the rest of us.

P.S. No, I am not getting bullish on the market - given the latest Bernanke stimulus - even between now and election time.  If there was ever a time to pull the plug on this clusterfuck that would surprise the most people, it would be