Thursday, January 31, 2013

No One Trusts Uncle Sam, Not Even Americans

"A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."

Geopolitical Tinderbox

Is it coincidence that geopolitical tensions are now rising at the same time that the stock market is in manic blow-off mode? Was it coincidence that the Arab Spring coincided with the 2011 winter/spring top in the stock market or that Occupy Wall Street got launched during the 2011 August market swoon?

Wednesday, January 30, 2013

There Will Be Blood

Just as we expected, these phony markets are only equipped to levitate higher, they don't do that slow downtrend "thing" anymore.

Just today, we got a glimpse into the future as multiple Italian stocks were halted. It's a binary market - one day stocks are going up for the umpteenth day in a row, the very next day, limit down. And these "circuit breakers" do nothing to restore confidence as they remove liquidity from the markets and force investors to dump other assets to raise cash. Zerohedge pointed to the recent declines in gold as likely being correlated to the Apple collapse.

The real issue is that so many volatility sellers have been selling volatility at low levels that there won't likely be any put option sellers around when the VIX spikes. That's a very similar situation to what happened during the 1987 crash vis-a-vis the "portfolio insurance" product i.e. it did the opposite of what it was intended to do - it accelerated the selling into the decline.

In any case, we are not likely to get too much more of a warning that when things come unglued worldwide, it will be fast and ugly.

Stocks Up, Economy Down

You can't make this shit up anymore. It used to be that Wall Street spent all of their time lying to us. Now they spend all of their time lying to themselves...

Tuesday, January 29, 2013

Deep Impact: Endgame for the Idiocracy

We are watching this movie in slow motion, so if everyone hasn't figured out the plot yet, they should be forgiven.

That said, if one looks past all of the lies, propaganda, newspeak and distractions, the endgame for the Idiocracy is in fact unfolding in real time...

Grin Fucked

I have to admit, the one thing this stagnant bloated society is really good at, is "communicating". Every minute of every day is filled with myriad radio, TV, and internet talk shows full of bullshit artists spewing forth on the issues of the day non-stop. It's the overwhelming preoccupation of a decayed society no longer capable of making and taking hard decisions, to talk incessantly as a proxy for action.

Unfortunately, that just means that society at large, stewing in a lethal cauldron of junk food and junk culture, is bent over the log getting grin fucked to death...

Monday, January 28, 2013

Extreme Greed

CNN says that market participants are exhibiting "Extreme Greed".  No shit...
(Click here to see their key indicators making up this index...)

My comments after the jump...

Race to the Bottom

Since the Davos Summit just ended, I thought we should educate the corrupt and callous attendees of the "Summit" as to why globalization has failed and was always doomed to fail...

Sunday, January 27, 2013

Let The Banks Go Bankrupt...

A glimmer of hope amid the never-ending futile game of Extend and Pretend being played in the U.S. and Europe. Here the Icelandic President tells how the Icelandic economy is now outperforming the rest of Europe, by doing the exact opposite of what the Goldman Sachs-installed stooges are attempting across the Euro area:

Friday, January 25, 2013

The End of the Stock Market

The stock market has been rising for four years straight on ever-declining volume. Seventy percent of current volume is High Frequency Trading (HFT). If interest in the stock market, as evidenced by volumes, is low at these lofty levels, what will it be like on the other side of another "correction" ?

No Fool Left Behind

This market is doing what every phony rally in history does, which is to pull in as much money as possible before rolling over (again) and heading into oblivion. The latest sentiment making its rounds is that a *new* bull market has begun. Yet contrary to this late breaking euphoria, I can't be impressed by a market that has had an unprecedented $8 trillion of combined monetary and fiscal stimulus thrown at it and still hasn't taken out its high from 2007 - or from 2000, for that matter. It's mind boggling to realize that a mere money market account has outperformed the stock market on a thirteen year timeframe - with zero volatility. Not something we will ever hear the dunced cheerleaders at CNBS ever talking about...

Wednesday, January 23, 2013

The High Price of Dog Food

I was just surfing the net and inadvertently clicked on a link that took me to "Newsmax" where I was force fed a bullshit sandwich.

Of course, it didn't take long before the rage inside me started boiling over - because I had just stumbled upon ground zero for what is fucking up this entire planet:  Mass disinformation in the hands of a demented subset of humanity who have been brute forcing all of the decisions leading us to this disastrous precipice...

Tuesday, January 22, 2013

Hyper Bearish

Marc Faber said today that he is "hyper bearish" and sometimes wants to "jump out the window..."

Well, my advice to him is to "get busy living or get busy dying", because I am hyper bearish too, but I am not going to jump out of a window.  I will leave that to the greedbots who created this latent fiasco, bringing the world economy to the brink of collapse, not once, but twice...

Deflation: Least Expected, Most Likely...

Since it's been a while, I wanted to review the case for deflation while there is still time. Too many think that the U.S. is the new Japan and that this debt expansion program can continue indefinitely, ultimately leading to hyperinflation. Unfortunately, as always, the least discussed and prepared for scenario, is the most likely to occur. For those who have not yet read Prechter's "Conquer The Crash", I highly recommend it. His arguments are flawless, irrefutable and inescapable. No, I don't get paid to flog his book...

History's Greatest Ponzi Economy, No Comparison

My greatest frustration with the Idiocracy is its ability to get most of the facts and data right, yet leave out the key fact, thus arriving at the altogether wrong conclusion. This is in fact the signature of the Idiocracy. This technique allows otherwise self-nominated "smart" people to continue to tell us how smart they are, while still clinging to their overriding comfort-seeking requirement for self-benefiting outcomes. It's dungeons and dragons for boy men.

Today, when I read this article on ZeroHedge about "Keynesians and Ponzians", I agreed with most of it, except the author only indicated two potential outcomes - austerity or inflation. Conveniently leaving aside the highest likelihood outcome - deflation...

Saturday, January 19, 2013

Abdication of Responsibility

One thing we know for certain - as soon as this shit show melts down under the weight of its own greed and corruption, the buffoons in leadership will come rushing in to find the fastest and easiest way to patch this collapsed ponzi back together, to get back to the status quo by whatever means possible...

Oh wait - that was 2008, and this is 2013... 

Friday, January 18, 2013

Wall Street Back In Greed Overdrive, circa 2007

There have always been disconnects between what the greedbots on Wall Street perceive to be reality versus what the average American is experiencing, however, today's chasmic divergence between these two worlds is as wide as it has ever been...

Insane Risk Taking

[Updated: January 25th, 2013][Original Post: January 18th, 2013]
We knew coming out of 2012 that those hedge funds that survived would be the ones that hedged the least and therefore endured minimal performance drag caused by the collapse in options volatility. Given that survivor bias, it should come as no shock - yet still is insane to realize, that hedging has become virtually non-existent...

Wednesday, January 16, 2013

Productized Society

I just coined a new term.  Feel free to use and abuse it whenever possible:

Productized ('prɑdəkt-taɪzd') Society:
A society wherein the range of acceptable behaviours becomes so narrow and superficial that it produces only undifferentiated shrink wrapped drones (aka. "people")

My biggest grudge against this slow motion clusterfuck, beyond the hideous fact that it has failed well over half of the population on this planet, is this relentless productization of society; no doubt spawning the dunced groupthink driving the Ponzi blow off that we are now witnessing in real time. And no doubt why every other advertisement is for a boner pill or testosterone, so corporate waterboys can vaguely experience what it's like to be a man. Unfortunately, the Idiocracy is attracted to productized "leaders", like a moth to a flame.

(Full disclosureI am no doubt by many purist standards, highly productized myself, which only adds to my latent rage for having been put through the meat grinder forwards and backwards...)

[Original Post: Jan. 11/2013] Phony Society, Seeks Phony Solutions...

The Mayans Were Right After All

The Doomsday clock was moved up a minute this week, but there was a new episode of The Kardashians, so few people noticed. In fact Mankind has hit the snooze button so many times on the Doomsday clock that it's actually noon the next day.

This obsession with predicting the end of the world, is a developed world preoccupation. For much of the rest of the planet, they never knew a world worth living in, in the first place...

Monday, January 14, 2013

Minsky, History, Reality v.s. Bernanke, Wall Street, Politicians

I noticed my stats had fallen off, so I thought there must be an NFL playoff game going on that I wasn't aware of. But then I realized it was just another Obama press conference where he was going out of his way to incite gun owners into an apoplectic fit of rage, all so he could appease his "base", none of whom own any guns. Nothing like hosing down a wild fire with gasoline...

Then I took a gander at another "alternative" blog, where they are talking about "Collapse Fatigue".

Collapse Fatigue? What the fuck is that? Is that where we get tired of thinking about reality so we take up another hobby, like lawn bowling...?

Friday, January 11, 2013

That Manic Moment

Biggest Pump and Dump Since Y2K
I don't know why it has to always be like this, but it's some sort of immutable law. This week, after four years of sitting on the sidelines, small investors have decided now is a good time to join the party, as they  moved more money into the stock market than they have since March 2000 - which was the all time high in the Tech Bubble. And yet, despite seeing near record inflows this week, the market closed less than half a percent higher for the week. Because, just as we learned the hard way back in March of 2000, there are always institutions on the other side of that "exuberance" trade, who are more than happy to dump their shares at these lofty levels only to buy them back at much lower levels from the little guy who is puking them back into the market. Been there, done that. Scroll down to see the Nasdaq back in March 2000 when we all thought Cisco was going to be the first trillion dollar company. Sound familiar?

And if Tom Demark is looking for a blow-off top with an overthrow, he should be looking at the Russell 2000 instead of the S&P 500, because we just found it:

Russell 2000 as of today's close:

Nasdaq, circa Y2K. What the fuck were we thinking?

Unlucky 13

Yesterday, Tom Demark, who has the best market timing record on Wall Street said "sell the world" and was, according to his indicators (see below), very close to a sell on the U.S. As of yesterday's close, the count for the U.S. markets should be "13" as well, although he still sees 1.3% potential upside (i.e. just a 'wafer thin mint'...

Wednesday, January 9, 2013

The Seeds of Panic Have Already Been Sown

This is the third straight asset bubble in 12 years - 1. DotCom 2. Housing 3. Now this Debt Monetization bubble. In each situation, there were explicit incentives and malincentives that both inflated the bubble and amplified risks. For the housing bubble, we know that low interest rates coupled with securitization, coupled with lax lending standards, a "laissez-faire" regulatory environment,  and all of Wall Street's privately traded and massively leveraged derivatives (CDO/CDS), all combined to create a financial Weapon of Mass Destruction. Granted, in this current era we won't find out what massive risks that Wall Street and the banks have conjured up this time - until after the fact. Yet, we can already discern by looking at public markets some very obvious incentives to increase, ignore and amplify risk, that will combine to create the all new financial WMD...

Wall Street Learned Nothing From 2008

AIG which was at the epicenter of the 2008 Wall Street collapse, just announced that it is considering suing the U.S. government for bailing it out. As always, you can't make this shit up. When a society's wealthiest constituents become so greedy and corrupt that they can no longer make an honest living, then all they can do is resort to rent seeking until the entire system collapses under the weight of its own stagnation and inertia...

Tuesday, January 8, 2013

The Fever is Rising

The State of Reality

Obama will give his State of the Union address later this month. If politicians were capable of telling the truth, below is what he would say. However, unfortunately, because we live in a shrink wrapped bubble inflated by cheap debt, society is overrun by child-like dunces in leadership positions who spend their entire time convincing us that reality can be ignored indefinitely. The stewed masses of course willfully believe that these factors all belong to that indefinite future. So when the bubble bursts, we can expect plenty of shock and awe from the Idiocracy, when they realize that the future just got here ahead of time:

1) We face a stagnant and bloated economy which is no longer self-sustaining and hence totally dependent upon ongoing debt accumulation

2) A stagnant jobs market with fewer jobs today than six years ago, despite a larger population. Fools and apologists say we added 5 million jobs since 2008, however, the U.S. accumulated $5 trillion in debt in the meantime which works out to $1 million per job.

3) A bloated and dysfunctional post-secondary education system now bankrupting its own students

4) A bloated and corrupt military industrial complex which has doubled its size in the past decade, and is sucking the lifeblood out of the political and economic system

5) Medicare and Social Security programs that are totally unfunded, now facing an overwhelming rise in recipients at the same time as the number of payers into the system is falling off commensurately

6) A totally dysfunctional political system that ignores all of the larger issues and focuses all of its attention on campaigning, partisan bickering and legal contrivances with an ever-dwindling half life

7) An incoherent foreign policy with troops in 140 countries while geopolitical instability verges on spinning out of control

8) A clueless corporate media focused on amusing, entertaining, confusing, obfuscating and otherwise ignoring the underlying causes or solutions to the major problems of the day

10) An oblivious general populace stewed in junk food, junk culture, and Prozac. Now becoming mentally unstable as the overwhelming issues of the day exert their inevitable toll on mental health

11) A rising trend towards mass violence propagated by 300 million guns floating around in god knows whose hands.  A too-little-too-late gun control movement just enough to light a fire under gun owners who are considering taking up arms against their own government

12) A massively leveraged stock market levitated by Central Bank debt monetization programs, now strongly diverging from economic reality

And the biggest issue of all which is that none of these issues are being confronted or addressed head on in any meaningful way, as society's overwhelming preoccupation at this juncture is to hide from reality.

Other than that, everything is A-Ok...

Monday, January 7, 2013

Brother Can You Spare a Trillion?

The latest over the top insanity emanating from the Idiocracy is the idea of minting a single coin with a $1 trillion dollar denomination. This would ostensibly allow the U.S. government to bypass the debt ceiling restriction by literally printing physical money. Critics say that it would lead to inflation. Sure, if they print 5 of them. If they print one and use it in place of issuing a trillion dollars in bonds which are then bought by the Federal Reserve, there is really no difference to the money supply under those two scenarios. What this really shows however, is the depth of depravity of U.S. "thought dealers" at this juncture who have clearly convinced themselves that the status quo is infinitely sustainable. What better example of mass complacency do we need than to contemplate the notion of printing a $1 trillion dollar coin as a solution for the nation's "debt" problem. Instead of focusing on the real economy and creating businesses and jobs that generate underlying value, U.S. policy-makers are solely fixated on fiscal brinksmanship, political games, money printing schemes and now coin printing scams. As I have said before, the U.S. is now led by Ivy League sociopaths who have convinced themselves that reality no longer exists for them. No contrivance is too bizarre for these financial alchemists who already put the world at financial risk once and are now doing it all over again. What is to stop the next set of buffoons from printing 3,4,5, of these "magic" coins? Nothing. This scenario would unambiguously cross the rubicon of actually printing money. Quantitative Easing is really just a cleverly disguised money printing scheme, but this would be the wide open version. And once the Idiocracy gets accustomed to a really dumb and fucked up idea - military blunders, mass junk food, mass junk culture, assault weapons for sociopaths - then it doubles down.  After all, if some is good, then as much as possible is a fuck of a lot better...Clearly this Ponzi Scheme economy is heading for Full Retard x 11. America's 30+ year vacation from reality just went on on too long and has rendered the population down to an infantile state where every difficult decision is assiduously avoided and every task at hand is turned into some sort of game.

Clearly, no dire blogger can compete with a magic coin show much less American Idol, the fiscal cliff circle jerk, the NFL playoffs or whatever other spectacle the Idiocracy can use to hide from reality. Which suggests strongly that anyone who is optimistic as to how this all turns out, is not only guzzling the Jim Jones Kool-Aid from a fire hose, but also skipping merrily down the path of extinction.

And the obvious question - is it time to buy gold, yet? My usual answer - wait for the inevitable market crash which the Idiocracy is going out of its way to ensure. When everyone is struggling to buy bread and ammo, we'll buy our gold much cheaper, from all of those who think it's today's latest get rich quick scheme. Of course we will need to load up on gold before everyone gets a trillion dollar welfare coin in the mail, and while Mitt Romney is telling 97% of us what a bunch of lazy fucking bums we are...

Lastly, a trillion dollars is 3 times Greece's GDP.  So let's ask them what they think about America's reality avoiding magic coin, as the IMF pole axes their economy into oblivion...

Sunday, January 6, 2013

Blow-off mode

[Updated: January 6th, 2013] Here is a longer term view that is even more ludicrous...

[Updated: January 4th, 2013]
We are reaching for that manic moment personified by Buddy Israel over to the right of my blog. Like a coked up gambling addict going all in for the last time, today the Value Line and Russell 2000 both closed two standard deviations above their 20 day moving average for the 3rd day in a row - extremely rare and overbought. Again, it's insane to realize that this much euphoria could be generated by a six week fiscal reprieve and a tax hike for the middle class. As long as the market keeps going up, no one questions the liquidity driven mechanics of this market, nor stops to recognize that the eroding economy is diverging with the ever-rising market. Next week, earnings reports roll in, at which point this fantasy will meet the brick wall called reality...

[Original Post: January 3rd, 2013]
I highlight the Value Line Average because it's the only major index that is still hitting new highs (and the Russell 2k). Here we see in stark clarity that every single dip since early 2009 when the QE programs were started, has been bought. We also see that every rally is of shorter and shorter duration, with each wave overlapping the prior wave by an increasing amount. Lastly we see that the slope of the trend is now going vertical after a four year rise on ever-deteriorating fundamentals. Just today Dollar Store announced weak earnings guidance. So the fact that the market is euphoric on news of a payroll tax increase when the middle class is barely making ends meet, shows the depth of the disconnect. It's solely a liquidity driven fantasy only a Central Banker could love. Notice the magnitude of the rise from 2009 v.s. the prior 2003 rally, each roughly four years in length. This is a market on monetary steroids. A market like this has only one goal - to suck in as many people as possible before heading hard down...

There have been three market glitches just in the last four days alone, so a Flash Crash meltdown is extremely likely once volume and volatility explode...(here's one, and this one, and another one)...

Saturday, January 5, 2013

Another Fucking Con Job

I just realized that the masses at large were once again conned into believing that this latest fiscal cliff deal was a victory for the middle class, when in fact it was the exact opposite - an overwhelming victory for the wealthy elite. Yet another con job of the masses at the behest of the rich...

Friday, January 4, 2013

No Exit Strategy

Long-term Treasury yields, pinned to the mat by deflation:

I was just watching CNBS for today's much-ado-about nothing jobs number. Steve Liesman said he is looking forward to the unemployment rate (now at 7.8%) going up, because that would signal more people coming back into the jobs market. This asinine position reinforces my view that it's ludicrous for the Fed to target a 6.5% unemployment rate as a target for ending quantitative easing, because that would require a lot more people giving up looking for work i.e. the overwhelming driver behind the lower unemployment rate...

Wednesday, January 2, 2013

Full Retard

The Fiscal Cliff deal that held world markets hostage for six weeks, has a shelf life of six weeks. The world's largest economy now reduced to a never-ending amateur Circus Act.

The net revenues gained from this groundbreaking deal reduce the deficit by 5%:

(h/t ZeroHedge for the chart data...)