Saturday, January 31, 2015

Skynet at the Brink

Thirty Year Treasury (ETF): New all time high
Up 25% in 2014 and up another 10% in January (200% annualized)
There is nothing 'Normal' about this...

"Aw Fuck, Not this Again!"

11 in January.
Over half of the trading days in January had Hindenburg Omens.

Friday, January 30, 2015

Step One: Get Money Out of Politics

Koch Brothers plan to spend $889 million to buy their own Sock Puppet

"The political network led by industrialists Charles and David Koch plans to spend $889 million for the 2016 elections. In modern politics, it's more than just a ton of money."

"It's about as much as the entire national Republican Party spent in the last presidential election cycle, four years ago."

"It's double what the Koch brothers and their network spent in 2012."

"No other outside money operation matches the Koch network in funding or organizational breadth."

An inherently corrupt society that systematically ignores conflict of interest and assumes everyone and everything should be for sale, has a hard lesson to learn.

Overnight Risk

Globalized Catastrophe

The BRICs are Falling like Bricks


The 2008 "Recovery" Visualized
$CAD, Russian Stocks, U.S "Inflation", EM Currencies, All Commodities

Our ability to exploit the rest of the world in perpetuity, is coming to an abrupt ending.

The Brick Wall of Anarchy: Maximum Shock Factor

GDP Growth Decelerated 50% Sequentially (5% to 2.6%) due to tanking exports

"In four separate interviews, none of the officials expressed a desire to delay a midyear rate increase."

"Most of the interviews came after the government reported that economy slowed to a 2.6% rate in the fourth quarter from a 5% rate in the third quarter."

Shock Doctrine: Thanks for Playing

After 9/11, the Idiocracy curled up into the fetal position and allowed GovCo to take away all civil liberties. After 2008, the Idiocracy curled up into the fetal position and allowed Wall Street to take away everything else...

The world is not enough for Wall Street
"A recent flurry of four-figure staff reductions by American Express Co. (AXP), eBay Inc. (EBAY), Coca-Cola Co. (KO) and other Big Business stalwarts might seem at odds with the broader picture of a cash-rich Corporate America enjoying record profits and buoyant stock prices."

The Dow 30 has added a mere 6% more jobs since the depths of the recession in 2009, while profit per employee went up 34%:

ALL Net Job Creation Since 2012 Came From Small Business
"Indeed, the number of people who work at these blue-chip firms, in aggregate, has been about static since the end of 2012, even as the U.S. economy has added more than three million net jobs. "

"Excess" (Unsustainable) Profit:
Productivity versus Wages:

Multinational corporations destroy human health, jobs, small businesses, economies, entire countries, and this planet.

Aside from that they're great.

Thursday, January 29, 2015

404-Economy Not Found

The Fed's Casino Effect Visualized
Despite the fact that the average family has ZERO stocks, for some inexplicable reason consumer sentiment is massively correlated to the stock market. The economy is falling apart in real time, but people who aren't even invested, still look to the Dow for assurance that everything is A-OK.

Consumer sentiment is the red line. The Dow is the black line. Correlation shown in the bottom pane:

A Jedi Mind Trick for Stoned Masses
In other words Global Central Bank drip feed to Skynet controls this entire Matrix and the dumbfucks who can't live without it. 

The Brick Wall of ANARCHY: Clueless this is All Ending

What do you get when you combine a stoned Idiocracy with a massive surprise?
We know what you get. And just like only a tool expects this casino to continue operating while the world is falling apart around it, only a fool is naive enough to ignore what is coming.

Every *news* broadcast is wall to wall buffoons
The Idiocracy bought the lie. Now, they are the lie. They still venerate the bullshit artists who at this very moment are putting the final touches on history's greatest collapse. You know, the same ones who collapsed it last time. The Idiocracy were too busy watching ESPN and the Kardashians to notice that they were being sold down the river in broad daylight. 

"The majority of American households would be in jeopardy after an unexpected expense of only $400"
A blow-off top into a collapse? Only 1929 bears any resemblance to now. A massive fake party based on borrowed time and money, and then it all ended overnight.

But this isn't 1929. The difference is that we had 2008 which was supposed to be the wake-up call that the psychopaths can't be trusted. And instead of heeding that warning, the Idiocracy let them go ALL IN. The front-edge of the hurricane weakens the structure, the back wall of the hurricane destroys it. Wall Street will be obliterated.

This is merely the eye of the storm and the warning clouds have re-gathered and then some. Only a hardcore denialist with his head permanently installed in his own ass can't see it coming.

The Idiocracy is about to get monkey hammered into fucking oblivion. Beware the Walking Dead, they have not even the faintest hint of what's coming. Quite the contrary, they actually believe that "things are getting better".

The World Is Not Enough For Wall Street

Wall Street is predicated upon the infinite growth paradigm,which doesn't exist in the natural world
Historically unprecedented profits are meaningless, because they are already "priced in" to current valuations. The only thing that matters is profit GROWTH.

15 Years of Nowhere at Microsoft
The stock price (black line) is back at a level it first reached in Y2K. However, profits have grown 250% since Y2K. During that time, the growth rate slowed hence the stock has gone nowhere (the Price/Earnings multiple that Wall Street applied to the stock, was lowered in-line with growth).

Fifteen years of growth was "priced in" at the peak in Y2K, so when profit growth didn't meet expectations in 2014, 18,000 people had to lose their jobs, despite operating profit at an all time high of $28 billion. Level of income is meaningless to (rising) stock prices. 

The red line is earnings per share (x100 to scale on the graph):

Billionaire wealth requires profits to continue growing forever which is impossible, so they monetized the middle class in a final bid to inflate their wealth.

The likelihood that profits can be maintained at these levels much less grow in the future, is the limit approaching impossible. They ate the seed corn, and their wealth is a fucking illusion.

Another Pump and Dump

Alibaba took Etraders for the usual ride and is now back below the first day IPO price

CNBC: Jan. 29, 2015
"Alibaba said revenue rose 40 percent to $4.22 billion, but missed the average estimate of $4.45 billion" 

"Alibaba did post better-than-expected third-quarter earnings excluding items of 81 cents a share."

Earnings beat, revenue growth miss. Sounds familiar...

Good times in the casino-formerly-known-as-the-economy

Wednesday, January 28, 2015

"Shit Breaks or They Break Shit, Whichever Comes First"

Ponzinomics: Only One Lie to Live
"Any attempt to normalize interest rates, will CAUSE something bad to happen, just as it did in 2008 and just as we are already seeing now with the "unforeseen" rise in the dollar, slowing of Emerging Markets, reversal of carry trades and collapse in commodities. Just the "hint" of normalization is causing shit to break. "

ZH: Jan. 28, 2015
Markets Disappointed as Fed Upgrades 'Economy' in Hawkish Statement
The 3 key phrases from today's FOMC Statement are:

"Strong Jobs Gains" instead of "Solid Job Gains", 
"Considerable time" dropped entirely 
"Solid Pace" instead of "Moderate Pace" For Economy

The illusion-formerly-known-as-the-economy has been reduced to parsing bullshit issued by bureaucrats who print money for a living:

The Davos Money has left the station
Thirty year Treasuries at new all time high - not buying any of the bullshit about an improving economy and higher interest rates. (So much for a "pullback"):

Greek Banks. Locus of Risk

I mean Spanish Banks:

This is whose been buying all of the Spanish Ponzi Bonds

National Bank of Greece

The Man Who Wants Everything, Ends Up With Nothing

OxFam, Jan. 28, 2015

This has been an 'interesting' time watching this disaster unfold in broad daylight. The psychopaths finally bought ALL IN to their own delusion. Sure, a few are scoping out farmland in New Zealand, but the vast majority are still bought in to their own self-deluded clusterfuck. They can't imagine a world that doesn't have them installed at the top. 

Crashing commodities? No problem
Treasury yields at all time lows? No problem
China GDP growth at 25 year low? No problem
Middle Class wealth at 20 year lows? No problem
Middle Class income down 10% since 2007? No problem
Housing starts at 1968 levels? No problem
Output Gap at a massive 20%? No problem
Employment Population Ratio at 38 year lows? No problem
Credit spreads and junk bond spreads at one year wides? No problem
U.S. inflation expectations at Lehman lows? No problem
Child homelessness at all time highs? No problem
Sovereign Ponzi borrowing? No problem
Printing money to buy stocks? No problem
Negative interest rates in Europe? No problem
Corporate profits leveraged to unprecedented levels,  now declining? No problem
Spreading global unrest and failed states? No problem
Politicians with 8% approval ratings? No problem
$33 trillion+ in squandered global 'stimulus"? No problem

Risks are high. Delusion is far higher.

This Isn't About Oil. It Never Was.

CNBC: Jan. 28, 2015

"Despite the large declines in commodity prices, we see risks as still skewed to the downside over the near-term"

Demand is falling faster than prices.

I had to move the arrow down another year. Prices were in 2003 last week, this week they are back in 2002, I mean 2001...

Ground and Pound

"Inventories of U.S. commercial crude rose more than expected last week, pushing stockpiles to the highest ever on record."

"Stocks of U.S. oil increased by 8.9 million barrels"

"Analysts in a Reuters poll projected WTI inventories would rise by 3.8 million barrels in the week ending Jan. 23."

'Analysts' were only off by 125%. A dart-throwing chimp would make a better oil analyst.

BI: Jan. 28, 2015
"Bespoke Investment Group noted that this is the biggest three-week rise in crude inventories since 1989"

MW: Jan. 12, 2015
"Goldman Sachs found in its Top 400 analysis of the world’s largest new oil-and-gas fields, that pre-sanctioned projects will be “uneconomic” at $70 a barrel. Such developments, are those where a final investment decision hasn't been taken yet, represent some 20 million barrels of oil a day."

"This also includes shale developments, where investments for $930 billion are in jeopardy"

This is Brent as of yesterday's close: West Texas Intermediate is at $45:

Recession Here. Bear Market There.

"The U.S. market’s foundation is crumbling, according to my calculations — just as it did in 2000 and in 2008."

"This condition has happened two other times, in March 2000 and December 2007. In each of the following years, the market lost more than 30%."

NYSE Tick:

Weekly Money Flow

S&P with 52 week price range of average stock:

CHOOSE: The Skynet Illusion

Tuesday, January 27, 2015

"Who Wants to Be A Billunaire?"

Multinationals only like weak dollars, not strong dollars...

The best stock printed money can buy
Microsoft with Fed balance sheet:

These multinationals with their artificially inflated profits are worth as much as Fed-printed money: $0. 

The 3% drop in GDP during 2008, caused profits to drop 50% i.e. 17:1 leverage. And we know that leverage has only grown every single day since then.

"Dude, Where's the Economy?"

The recovery has been postponed until the economy returns from China

So that's what this was all about...
1 Year Treasury Rates:

Another year of corporate "synergies" and 0% interest rates, should fix everything

Atlas Shirked

Davos Breakout Session: 
"How the obscenely wealthy can escape the consequences of obscene wealth" 

The Guardian Jan. 23, 2015
"With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said."

Unfortunately, New Zealand is part of the Ponzi Scheme
You don't escape from a Ponzi Scheme, and there is no way to stop it from collapsing. At its most fundamental level, a Ponzi Scheme is merely an accumulated liability with no offsetting asset. Billionaire wealth is an illusion, it's a fiction. It was printed out of thin air by Central Banks and upon collapse, it will return to its original state - nothing. Will there be a sequence and order to the financial asset "liquidation"? I'm counting on it; however nothing is assured. Suffice to say no one is immune from the consequences of this Globalized disaster. 

Not even the people who primarily caused it:

The top 85 billunaires own as much as the poorest 3.5 billion slaves.

Ayn Rand would be so very proud.

Denialation By Ponzi Scheme

All societies live and die by their asinine assumptions, this one will be no different.

These are the basic questions economists should have asked to spare themselves from bankruptcy:

Q: How can we print so much money without (hyper)inflation?
There are two reasons why Money Printing (aka. QE) never led to hyperinflation, as it did in the Weimar Republic and to a lesser extent the 1970s 'Stagflation':

The first reason of course is mass Third World outsourcing, as depicted by capacity utilization below. Today's output gap is chasmic, and under the current "free trade" paradigm it will remain chasmic. There is an unending supply of cheap Third World labour to tap into:

Muppets to the Slaughter

The lemmings just ran off the cliff

CNBC: Jan. 27th, 2015:

ZH: Jan. 27th, 2015

"More lenders are lowering down-payment requirements, allowing borrowers to commit 3%—or even less—of a home’s purchase price to get a mortgage. Many had been requiring down payments of at least 20% since the recession began."

"The moves come as mortgage originations declined substantially last year. Lenders gave out an estimated $1.12 trillion in mortgages in 2014, down 39% from a year earlier and the lowest amount since 1997"

The fiscal trade attention deficit. Fatal.

Monday, January 26, 2015

U.S. Recession

Treasury Bonds have been screaming recession for months. Now sector by sector, stocks are indicating recession as well.
The recent Dow high was December 29th. Back in 2007, stocks peaked six weeks before the recession officially started. Some sectors peaked before the recession started, some peaked after. Many of the sectors that peaked AFTER the recession had begun last time, have already peaked months ago.
Energy exploration is the new subprime, which just crashed taking heavy construction, industrial machinery, basic materials and energy with it.

Casinos down. Booze and Cigarettes now leading.
Brewers are the only sector that peaked AFTER Lehman in 2008, because everyone wanted to get shit faced, one last time. I think we all see where I'm already going with this...

Skynet: Controller of the Matrix

MW: Jan. 26, 2015

Like trying to make McDonald's unhealthy
First, off Russians programmed HFT. Secondly, it's already pre-programmed for instability, as we have found out about 1,000 times since 2010. There is no point in destabilizing something that is already inherently unstable. For the record, the programmers were American Russians, not to be confused with Russian Russians.

While Etraders were mesmerized by the Dow, the post-2008 economic crater was being dug twice as deep

How Skynet constructs the Dow illusion on minimal volume:
First find some nearby market moving 'event', then sell volatility against the event (ECB, Fed, BOJ etc.). Next, take away liquidity (depth) to slow volume down to nothing, so institutions can't sell in any size, which lowers realized volatility. Then use the futures to walk the market higher, running all stops and taking out all day-trading shorts. Cover the volatility short after the event. Do this long enough until everyone capitulates and volume is essentially zero, like now:

Black Swan Inevitability
Unfortunately, this con job has succeeded at convincing the vast majority that it can continue forever. Life outside of the Matrix (aka. the linear extrapolation of the impossible), brings its own health benefits, but it's not for the attention deficit. Betting against human history's largest bubble, is not a game for those who seek the seductive comfort of conformity.

Buy The Fucking All Time Lie

S&P with Fed Balance Sheet
Unfortunately both stopped going up at the exact same time

S&P With Rydex Asset Allocation (Bull: Bear) Ratio
The usual bagholders showed up right on time:

Fiddling While Rome Burns

Another Davos Ponzi Party Over.

The failed states are stacking up like cord wood while everyone pretends this is all "business as usual". This week it was Yemen. Next week...[Insert any country here].

Today's "elites" can't face the problem, given that they are the problem. 85 billionaires now having as much wealth as the poorest 3.5 billion people. History's largest ponzi scheme without any possible comparison. 

Microsoft with Fed Balance sheet
Both peaked at the same time. Coincidence?

Given enough time and neglect, most problems fix themselves, and the people who caused them.

Megalomaniac Overdrive: The God Complex @Full Insanity

Bring back Rambo - He hasn't lost one war yet. He even won Vietnam after it was over.

CNN Jan. 24, 2015
Troops on front lines in Iraq?
Pentagon says yes (again)...

Jan. 25, 2015:
Troops in Yemen? 

Jan. 24, 2015:
Troops in Ukraine? 
U.S. Special Forces in Ukraine

When your own country is falling apart, it's Manifest destiny to fix everyone else's instead.

Success is purely a function of how many people you bomb. 

Only huge amounts of bombing will win radicalized youth over to junk food and junk culture.

Spectacle 2015: Collapse of The Globalized Empire

404-Plane Not Found.

ISIS will conveniently infotain the Idiocracy while everything implodes in real-time.