How Greed Swallowed Capitalism Whole

Having feasted on the Third World's local markets for decades, the globalized infinite growth machine came home hungry. First it bought the political system and then went about destroying small businesses and millions of jobs. Ultimately saddling a hollowed out Middle Class with massive debts and thoroughly unaffordable healthcare and higher education costs. In its final act, the machine will turn on itself. 

Healthcare costs by country:

Student loans (U.S.): The next subprime disaster:

The next trick: Ironically, the profit machine will wipe Wall Street off the map.

The New York Stock Exchange went public in 2006. At that time, High Frequency Trading was non-existent (see Nanex screen shots below). By 2011, HFT was 70% of stock market volume and a huge source of revenue for the NYSE. HFT was the cause of the 2010 Flash Crash and it will ultimately bring down the global financial system. All originating with the NYSE IPO:

NYSE/ICE:

History's Largest Short-covering Rally: A Total Fabrication
Today's casino is driven by 0% interest rates, Fed QE (blue line), short-covering, HFT momentum, and stock buybacks, driving a massive divergence relative to the real economy. All of which has occurred on ever lower volumes (red line):

Any system without accountability - capitalism or otherwise - will fail.

Concentrated wealth is concentrated corruption.

Archaeology 101

Slave to Corruption: It Was All A Keynesian Plot

The need to invent a false narrative to paper over this historically colossal clusterfuck cannot be overstated. That it will all land at the feet of Ponzi Capitalism, taken to its logical extreme conclusion, is driving the apologists for greed over the top insane. History will be the final arbiter for why this all happened, not the vacuous man-boys who were hand-maidens to global collapse. They will be a cautionary footnote buried beneath a mile of rubble.

ZH: April 21, 2105

The Crowning Glory of Keynesianism 

Back during the darkest depths of the Great Depression, Comrade John Maynard Keynes penned his Socialist manifesto "The General Theory of Employment, Interest and Money", as to how unionized nurses and school teachers would ultimately take over the world.

Eighty years later and what have they wrought?

They successfully collapsed union participation to an all time low: 

They successfully concentrated all wealth in the hands of 1% of the population, that for some reason didn't include them (we didn't say Socialists were smart, did we?):

They convinced Ronald Reagan and the Ponzinomic Neocons that you can borrow your way out of debt:

"Reagan proved deficits don't matter" - Dick Cheney

And they maximized profits while collapsing wages (% of GDP):

All while outsourcing the economy to China in exchange for *special* dividends.

Not bad for nurses and school teachers.

This wasn't a Keynesian plot, it was a failed experiment.

Clusterfuck Species: Serial Catastrophe

A pathetic tale of recurring greed, power, war and self-delusion

The human race exhibits zero self-awareness and introspection. No accumulated wisdom. 

Each ascendant society goes on to repeat the exact same mistakes of the previous one, ending in inevitable collapse. It's a highly predictable repeating tale of greed, power, war, and uncontrolled hubris. All of which takes place in broad daylight while everyone pretends it's not happening.

The lessons of history exist solely in the past, they are assiduously ignored by the current crop of megalomaniacs, who choose instead to follow the same failed game plan as their failed predecessors. Each terminal generation assuming that the laws of reality don't apply to them. 

Like a 400 pound fat man who can't get out his own way, the human race is prone to serial failure.

This cycle will only be broken when this species gets tattooed with a lesson that sticks. A sense of foreboding humility passed down from one generation to the next. 

That lesson is coming.

The Humpty Dumpty Crash

Central Banks have conditioned investors to embrace risk. Which will finish the job that 2008 started. For six years straight, the foundational support of the economy and markets has been systematically eliminated in broad daylight. All while the zombie bullshit factory was discussing which game show host should be the next Captain of the Titanic.

In the meantime, having bailed out Wall Street by burying the middle class, Bernankenstein finally received his "well deserved" payday. Suffice to say, Yellen & Co. have inherited the more challenging task, bailing out a smoking fucking crater.

ZH: April 19, 2015

Bond/Utility Divergence Flashes Warning Sign For S&P

Utilities/10 Year Bond:

My how the weeds have grown during six years of non-stop bullshit...

History's Largest Jedi Mind Trick. Visualized

Greed versus Fear

Elliot Wave theory postulates that Social Mood drives markets - the cycle of Greed and Fear. Hence, the wave labels indicate the cycle of emotions. Normally I wouldn't label a five wave impulse in real-time, because the waves are not symmetrical. Nevertheless, the attenuating wave form presenting in the Value Line is too clear to pass up...

Human herding at its finest

Below, consistent with EW theory, the clear accelerating rising wedge indicates that each dip has been shorter than the last - ever less patient greed. However, this 5 wave impulse is FAR more lethal than most, because it has been artificially "enhanced" by Central banks and HFT algorithms. It's a manic market on steroids, sprinkling its pixie dust wealth effect across society - making everyone feel wealthier than they really are - tempting them to buy cars and houses and iWatches. It's history's largest ever Jedi Mind Trick. Even those who own no stocks have been somehow caught up in the manic contagion. Human herding at its finest. 

A Manic Blow-off

The fifth wave is the overthrow - the rally since October - the last lunge of frenetic buying. If the theory holds, it will be taken back very quickly. And so will the rest of the six year artificially fabricated rising wedge, which is solely a function of monetary policy stranding investors from economic reality. 

Value Line Arithmetic Average (red line)

Black line is the Rydex Bullish:Bearish asset allocation which peaked late February:

Trouble In Alibabylon

Ameritrade and Schwab outperforming. Then and now.

It was a busy week in Pump and Dump...

The Big Lie. Hook, Line and Sinker.

Bernankenstein & Co. successfully circumvented reality

Washington Post: April 19, 2015

"If anyone deserves a seven-figure sinecure, it's Ben Bernanke. The former Fed Chair put his academic work on the Great Depression to the best possible use when he saved the financial system in 2008, and then went further than any other central banker to try to bring unemployment down."

Employment/Unemployment, what's the difference to Dumbfuckistan?
Even Bernankenstein's new employer says that he only made unemployment far worse. 
Early retirement for 20 year-olds has never been so popular:

Today's apologists for the status quo forget that in the Great Depression, the debt was eliminated. Whereas, in this era it has grown by 50% globally in six years. So Bernankenstein & Co. didn't save Washington Post morons from Depression, he guaranteed they would be obliterated, and not see it coming.

The Big Lie is de facto.

Nothing Left to Bail Out

"For six years straight, the corporate Mad Men, sponsored by Central Bank bukkake whores, have been dismantling the global economy and selling it for special dividends. "

The 15 Year Widely Embraced Lie:
Monetary policy "helping the economy" 
Interest rates and jobs:

ZH: April 18, 2015: 
Citadel Investment Group
Bernankenstein's new Wall Street employer saying the same thing, two years ago:
"The Fed’s policies are doing two things that I am very gravely concerned about. Number one is we have all learned over the years that if you reduce the cost of capital you increase your use of fixed assets and you take out jobs. Corporate America seeing an ever increasing cost for its employee base and extraordinary low interest rates is taking every step they can possibly take to reduce employment, to build factories abroad and domestically to substitute technology and automated processes for people. So one of the very sad negative characteristics of the Fed’s policies is it’s leading to job destruction.”

Fast forward two years:
ZH: April 16, 2015
Citadel Investment Group
Wall Street's bukkake whore joins the most highly leveraged HFT firm on Wall Street

Bernankenstein and Skynet. At one with the machine. A corrupt society can't recognize corruption.

The Fed didn't circumvent reality, they sponsored a six year corporate job annihilating debt binge, leaving nothing left to bail out at the end of it. But don't take my word for it, ask Bernankenstein's new/old boss. 

Pandora's Deluge: Third World Deflation

The Fed didn't create first order deflation, as many desperately would have us believe. They certainly financed it, and they facilitated it, but they didn't create it in the first instance. Low interest rates didn't cause outsourcing, outsourcing caused low interest rates. Which subsidized further labour substitution.

Job killing 0% interest rates are compliments of Third World factory slaves:
Net exports and interest rates

First order deflation came from buying cheap junk in one country and selling it in another, brokering the difference with debt. One-way industrial arbitrage, with Third World convergence waiting at the end of it all. 

Until that ends, there will be no real jobs. The Titanic has a gaping hole in its side and no amount of Fiscal/Monetary bailing will fix it.

But we are surrounded by dunces, so they get to find out the hard way. There is no free lunch in Walmart world.

Occupy Smoking Fucking Crater

The Last Temptation of Wall Street
Investor net leverage (NYSE Margin debt - cash and credit). Also shown here:

The magnitude of this collapse will define cataclysmic. Wall Street will be more smoking crater than location. Six years of 0% bailout rope, so they hanged themselves.

For six fucking years straight, the corporate Mad Men, sponsored by Central Bank bukkake whores, have been dismantling the global economy and selling it for special dividends. Econo-dunces were at a loss why there were no jobs, so political sock puppets reconfigured unemployment to exclude anyone who can't find a job. All while the Soylent Idiocracy euthanized itself on junk food and junk culture.

The foundational structure of the economy has now been totally eliminated. The current illusion-formerly-known-as-the-economy consists of printing and borrowing, abetted with fake confidence, all hanging by a single overnight event.

This time, there will be nothing left to bail out -  30% of listed companies are running losses and the rest are saddled with trillions in "leveraged recapitalizations" aka. equity for debt. 

First they cannibalized local economies, then they cannibalized the middle class, then they cannibalized themselves. All it will take for the corporations to go away, is to do nothing.

Central banksters didn't circumvent reality, reality circumvented them.