Happy Labor Day, Disposable Widgets

This week, my wife and I were debating which major our middle son should pursue at University - now in his first year. Of course, neither one of us considered Information Technology, my field for 25 years. Why would we when it's been 15 years of relentless outsourcing and non-stop concern as to whether or not I will have a job a year from now. Then tonight I read this bullshit article stating that "the skills gap is real" i.e that there is a dearth of well-trained technical employees in the U.S. Let's see, back in the late 1990s, we were told that the IT boom was going to last decades. It turned out that months are now the new decade. All of the entry level and now advanced jobs that would have been in the U.S. are now in India. But don't expect any PhD academic, country club frat boy, or any other self-absorbed tool to get it. They get to find out the hard way. 

Having witnessed the 30+ year ascendancy of the morally void Ayn Rand Angel Heart Society, we are now witnessing in real time, its vicious unwinding. The demise of Dumbfuckistan...

Minsky v.s. Bernanke

A timely reminder as to how and why this global economic lunacy will end with history's largest bank run. Using debt to resolve a debt crisis is history's largest fool's errand aided and abetted by history's largest boatload of fools. 520 global interest rate cuts in five years has incentivized nation states to supplant private borrowing with public borrowings to prop up their economies. The Minsky Moment will arrive when the marginal borrower is no longer able to rollover its debts, causing a cascade of defaults as lenders pull back from the market...

Icarus

Atlas Shrugged, Indeed

For those who are blind-sided by what comes next, it's only because they are fully bought in to the status quo and otherwise can't fathom that it could all end at a moment's notice.

They never stop to question whether or not the hundreds of millions of sweatshop factory slaves who keep the globalized Ponzi functioning, will continue to show up for work on time...

Fools And Their Money Are Soon Parted

This Cyprus bailout with attendant deposit confiscation for certain depositors appears to be stirring an awakening across the slumbering masses. I am basing that observation merely upon anecdotal evidence at this early juncture. Some here in the U.S. have pointed out that zero percent interest rates for four years straight has been its own form of confiscation, by favouring borrowers over savers. I have made the same point. However, the other major risk arising from zero percent interest rates, is not just underfunded pensions, it's the fact that it has turned many savers into speculators...

The Globalization Virus

Globalization was on the verge of collapsing in 2008 when world leaders stepped in and rescued it from the dumpster of history. In their infinite wisdom in order to save it, they used the exact same policies that led to the 2008 collapse  - namely,  debt accumulation sponsored by easy Central Bank policy - and they amplified those policies 10 fold. That’s how all problems get "solved" in the Idiocracy.

Regardless, globalization has already failed the majority on this planet and it’s failing more and more people with each and every passing day. Granted, the ever-dwindling number of apologists for this catastrophe happen to be the loudest gas bags in society, so they are still able to drown out the simmering rage of the silent majority. However, like all viruses, the relentless globalization virus can’t be controlled, so it must burn itself out.  Which means that the host will have to die first...

Done Like Dinner

It's over. Just a matter of waiting for Wall Street to get its nose out of Bernankenstein's ass.

The signs of overwhelming social decay are ubiquitous, however the Idiocracy slept through history class and therefore can't recognize the point of recognition...

Sudden Death. Overtime.

The divergence between the market and the VIX (options fear gauge), has never been wider, as Wall Street remains heads down in the Central Bank feed bag and Main Street remains head shoved up its own ass. What could go wrong?  

Yet Another Extinct Species: Realists

Today we learned that the Investor's Intelligence Survey shows the number of bears at a two year low. Central Banks have systematically hunted bears into extinction, even as macro risks have grown continuously in the background. It took three months of near straight up action, but now even the most reluctant money managers are finally capitulating. So don't be surprised that everyone is cheerleading the markets at this juncture, because there are few prognosticators who are not bought in...

Red line below is bearish percentage...

[Source: schaeffersresearch.com]

Greed and Kapitalism

Why is it that when the market was at its low after Lehman in March 2009, no one wanted to own stocks. Yet, now four years later, no one can think of a reason not to own them, even though today's rumour was that North Korea is now preparing for war with the South...The Dow was up 67 points on the news - yet another all time high (yes, we also got news of fewer jobs outsourced this month than last month...). 

Pure blinding greed, that's all. Nothing more, nothing less. So if people are not acting particularly rationally at this juncture, we have to take into account the fact that they are guzzling the Kool-Aid by the barrel full...

Vertical Takeoff and "Landing"

People reading this blog think "this guy writes the same fucking thing every day!".  That's right - global policy-makers propagate the same asinine policies every day, and then I point out how ludicrous they are, every day. The beatings will continue until morale improves...

Just today we learned that North Korea threatened the U.S. with a pre-emptive nuclear attack. The Dow reached a new all time high on the news...

The Silence of the Lambs

Yesterday we learned that there are more billionaires than ever - 10x as many as 1987. The gap between the ultra-wealthy and working poor has never been wider in the U.S. The "Atlas-like" CEOs of Ayn Rand lore take home a mere 244 times what the average American makes in a year - by far the biggest CEO pay gap in U.S. history. And today, not coincidentally, the Dow just hit a new all time high, eclipsing its last peak from 2007. All it took was $9 trillion in global Central Bank dopium, and $7 trillion in U.S. debt, to get the market back to a level that it first attained six years ago. As ZH points out, in the meantime a near doubling in the number of people on foodstamps, an 80% increase in the national debt, 5 million fewer jobs, none of which apparently matters when the Dow is at new highs..

Banzai !!!

[Updated:  Feb. 1st, 2013] Updated yet again...still insane...

[Original Post: Jan. 17, 2013]
When Japanese Kamikaze pilots went into battle, their explosives-laden aircraft only had enough fuel for a one way trip - for obvious reasons. The same can be said for this liquidity propelled rocket ride we call a market. When Bernankenstein started adding liquidity to the markets at the bottom in 2009, he knew he would have to continually add ever-more monetary rocket fuel to keep assets levitated - which he has done, every stage along the way.  Whenever it looked like the rocket ride was stalling, he stepped in with yet more dopium.  The result is what we see below, a parabolic rocket ride with no exit strategy whatsoever...The Idiocracy at large hasn't cared about this ludicrous strategy, because stock prices have generally been going up; however, they will be rudely awakened from their narcoleptic food coma when they find out that they only paid for a one-way ticket...

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...

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...

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... 

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...

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?

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...