Speaking of which, the masses at large are just now figuring out that this post-2008 global pseudo-recovery has been a massive con job. Another decade of using people up...
The riots in France are heating up:
Via ZH:
Only the start, indeed.
Fingers will be pointed. Wall Street, Central Banks, Trump, there will be no shortage of people to blame for this disaster. The one person the obedient sheeple will never blame is the person in the mirror. After all, who "forced" them to trust Wall Street again after 2008? No one. The overriding factor that led to yet another wasted decade of using people up, was the pervasive unshakable belief in "the system". The all-consuming drive for "more", now in another holiday season of binge shopping by way of proving our belief in the false god of consumption. They had ten years to pay down their debts and realize the party is over. And yet their entire self-image was tied up in the next rung of the ladder, the bigger house the fancier car. The number of people who will ever achieve the Suze Orman "minimal" retirement goal ($4 million), is a Powerball lottery.
Fingers will be pointed. Wall Street, Central Banks, Trump, there will be no shortage of people to blame for this disaster. The one person the obedient sheeple will never blame is the person in the mirror. After all, who "forced" them to trust Wall Street again after 2008? No one. The overriding factor that led to yet another wasted decade of using people up, was the pervasive unshakable belief in "the system". The all-consuming drive for "more", now in another holiday season of binge shopping by way of proving our belief in the false god of consumption. They had ten years to pay down their debts and realize the party is over. And yet their entire self-image was tied up in the next rung of the ladder, the bigger house the fancier car. The number of people who will ever achieve the Suze Orman "minimal" retirement goal ($4 million), is a Powerball lottery.
Speaking of turning up the heat, here in the U.S. we are confronted with the scenario of the "boxed in" Fed forced to raise interest rates as the unemployment rate reaches all time lows.
Here below we see the official unemployment rate (blue) with Fed Funds rate. Normally, they crossover during the recovery, as the Fed removes stimulus in-line with the falling unemployment rate. In this cycle that never happened. So now the Fed is behind the curve, clearly still highly accommodative relative to past cycles. Sadly, this constraint can't be managed on Twitter:
Worse yet, today's unemployment rate is a colossal fucking lie. Because among other things it removes young people who are full time students. After 2008, young people had no other option than to go back to college in droves, which drove tuition costs up to asinine levels, as colleges monetized the massive surge in demand. Uber surge pricing for education. No surprise, student loan debt exploded as well.
There are two cartels now dominating the U.S. economy, both raising prices with impunity. One is healthcare, and the other is post-secondary education. The U.S. post-secondary college system produces untold numbers of worthless degrees, now costing upwards of a quarter of a million dollars for four years. A total waste of time and money. A futile arms race in pseudo-education intended to stem the rising tide of youth unemployment. A social stratification system wherein the number of quality career job placements keeps dwindling while the number of applicants continue growing.
There are two cartels now dominating the U.S. economy, both raising prices with impunity. One is healthcare, and the other is post-secondary education. The U.S. post-secondary college system produces untold numbers of worthless degrees, now costing upwards of a quarter of a million dollars for four years. A total waste of time and money. A futile arms race in pseudo-education intended to stem the rising tide of youth unemployment. A social stratification system wherein the number of quality career job placements keeps dwindling while the number of applicants continue growing.
Here we see student loan debt level (blue) with the 20 to 24 year-old labor participation rate at a multi-decade low. What happened is that young people borrowed astronomical amounts of money to sit out the recovery. To say that these newly minted degrees in binge drinking have a profoundly negative ROI, is an asinine understatement. There is clearly no education in education anymore.
The second U.S. cartel is in healthcare, arguably the biggest disaster we now face, consisting of consumption elephants eating themselves to death while attempting to retain some form of health insurance. A totally impossible task in a private insurance market. Which is why more and more cost gets shifted onto the sagging public programs while private companies skim the healthy cream off the market. Which is why the U.S. has by far the worst healthcare system in the developed world based upon costs to serve relative to outcomes. Corporations are milking the system dry.
It should come as no surprise that the only sector on the entire planet making new highs right now is U.S. healthcare. One of the only industries that can continue raising costs with impunity.
The ultimate recession play:
Put it all together, what do you get?
You get a Fed over-tightening into recession, faked out by massaged economic data intended to make the recovery appear stronger than it really is - all for presidential bragging rights.
"The spread between the 3-year and 5-year treasury yields inverted on Monday for the first time since 2007"
"Goldman agrees with the overweight position that hedges have on utilities. It's the first time the industry has taken that outlook on the classic defensive sector since the financial crisis in 2008, according to Goldman."
