A Clown For All Seasons

"At the end, exceptional circus clowns debated how best to propagate the indefinite impossible, to the delight of a raptured Idiocracy. Even as it was all collapsing in broad daylight"

The Idiocracy lives and dies by its circus clowns, but it was clear last night, during the Republican debate, that Faux News is afraid that one of their clowns is off his leash.

The entire debate spectacle was intended to downgrade The Donald Trump, the Circus Clown to end all clowns. But in doing so, they only elevated him to the Idiocratic "base". In the very FIRST staged question they forced him alone to admit he would run as an independent, a circumstance that would only splinter the Republican vote. Why would they do something so stupid? Because Faux News are the dumbest fucking people on the planet, catering to a like-minded audience. 

Trump is 6 Minute Abs to the Republican Party
He's a buffoon too far. One level beyond the asinine buffoonery that is absolutely required of all Republican candidates. 

"Don't be ridiculous"

Lord of the Lies: Who Will Be the Next Captain of the Titanic?

ROME IS BURNING. Literally

Mass drought
Mass wildfires
Mass extinctions
Mass shootings
Mass complacency

Mass Denial.

The juvenile Idiocracy has yet to figure out how profoundly stupid they are: Dumbfuck revelation will put all doubt to rest. The Corporations won this round by dumbing everyone down to stoned zombies - idiosyncratic intelligence being of no use to the Mad Men and quarterly profit.  

Aside from unreality TV, the self-absorbed dumbfucks at large are preoccupied with who will be the next Captain of the Titanic.

No fewer than 38 Loonie Tunes candidates are vying for the Republican Presidential nomination. Each one equally arrogant and math challenged enough to assume they will win. In other words, the Idiocracy has a full array of lying sacks of shit to choose from - as to who best mirrors their own fucked up and convoluted self-interests at the expense of the rest of the country.

The Democrats have made it easier - Billary Clinton is the only option i.e. the candidate who lost to the current incumbent who is putting his final touches on his signature 8 year Extend-and-Pretend collapse in broad daylight. Bernie Sanders is the dark horse in this entire fiasco, impeccably timing his left-wing entrance with the impending riots. Genius. He won't solve any long-term problems but he could get elected, when the Idiocracy lurches again from one asinine decision into the next worse one. Sanders will re-distribute fake wealth from billunaires back to the middle class, until there is nothing left to hand out, and then everyone will stand around wondering what to do next. 

Not one of them has even uttered the words "trade deficit" which of course is the root cause of this entire fiasco. Why? Because the trade deficit is the basis for the consumption oriented lifestyle which is the false idol for the New Sodom and Gomorrah. Today's multinational corporations can't exist without the de facto Globalized separation of production and consumption. It's that self-cannibalizing arbitrage between the low cost of labour and the debt-subsidized cost of their vastly overpriced products, that is the basis of their inflated profits. Without that arbitrage, they no longer exist. In addition, the U.S. trade deficit at $550 billion equals the U.S. defense budget AND equals 3% of GDP, the current "growth" rate. Meaning that like everything else, "Exceptionalism" is merely on loan from the Chinese and so is the fake wreckovery. 

All of this spectacle of course, is merely sound and fury signifying nothing. It's a contest at who can best rearrange the deck chairs on the Titanic. 

My only solace is knowing that this will end far more suddenly and far more violently than any of them could possibly imagine.

And from that crater must by definition arise a higher IQ, well earned humility and a much lower carbon footprint, if only due to the curtailment of non-stop bullshit. 

Along the way, Corporate zombies will have to decide if they can be human beings. 

Or not. 

Dumbfuck-o-Nomics: Race To The Bottom

This will end with all Econo-dunces going bankrupt, by their own specious theories. Including Paul Krugman, genius architect of borrowing our way out of a debt crisis...

A while back an Econo-dunce denialist advanced the idea that a minimum wage increase was self-destructive, leading to greater unemployment. It was the typical static analysis, wholly ignoring the income-multiplier effect of higher middle class revenue. There is no question that the marginal product of labour is the MAXIMUM wage that a company can afford to pay, but it is by no means the MINIMUM wage that a company will pay.

Under the Grapes-of-Wrath Third World economy that we live in currently, the market-based minimum wage approaches $0. Three billion people subsist on $2.50/day, which is the de facto marginal minimum wage. For what it's worth, I favour balanced trade and a reverse tax credit for lower income levels, but all of that would make way TOO MUCH fucking commonsense, so instead we wait until the status quo race to the bottom lands with a colossal thud. 

Part of the above argument against a minimum wage, features the standard Econ 101 upward sloping supply curve meaning that as wages go lower, less labour will be supplied. Implying that as wages are lowered people will choose not to work, because in ceteris paribus land, starving is the solution for low pay. Sure. Obviously it's the exact opposite in the real world -  additional play-time is the dominion of the extremely well-paid while bony fingers and longer work hours is the dominion of the underpaid. 

But why take my word for it, let's turn to the oil market to see another example of an upside down supply curve:

Race to the bottom Visualized:

Oil production (red) is rising as oil price (black) falls. Under a high fixed cost operating model, producers will increase supply to offset the lower price, to stabilize revenue:

Fracking ETF:

First one to the bottom, loses everything.

Sheeple Nomics: Slaves to efficiency

ef·fi·cien·cy: Doing more with less

The modern economic goal of efficiency which was the holy grail of the industrial revolution, is the altogether wrong goal for an advanced economy. It was inevitable that the overriding goal of efficiency would lead to mass unemployment, colossal profits for the few, a corporate oligarchy, and environmental degradation on a massive scale. It puts quantity over quality. 

It also arbitrarily separates production from consumption a concept that has become the central tenet of modern economics. We buy from one locale and sell in another while ignoring the accumulating imbalances. Globalization reproduces the very similar colonial model of extracting resources from one set of countries, labour from others, with final goods "packaging" in the parent country. It very "efficiently" commodifies all factors of production - especially labour, to the benefit of the ever-fewer.

In a world of finite resources and infinite labour, the model was inevitably going to lead to environmental degradation and mass unemployment. Supply and demand can't be divided up across national boundaries, "clearing" the market with accumulating debt aka. trade deficits. Under globalization, markets never reach true equilibrium.

The Globalized disposable model throws off massive "externalities" in the forms of debt, pollution, unemployment, and social disintegration that are borne by the broader society, while the profit is borne solely by the corporate arbitrageurs. That this model would ultimately self-destruct, is a matter of commonsense and 3rd grade arithmetic.

The overspecialization of labour dumbed down society, as corporations reduced complex functions down to singular tasks. 0% capital and colossal scale are the handmaidens to the mass unemployment of a redundant workforce possessing no differentiating skills whatsoever. 

Efficiency led to an all-consuming preference for quantity over quality, culminating in frankenfood and crop monocultures to sustain an oversized population on the verge of being made wholly redundant.

The answer is simple and imminent - disaggregation of the economy via incentives to small business and balanced trade policy.  

Leveraged stock buybacks have made the impending implosion of the major corporations, the easy part. 

In 2008, GDP dropped -3% (red line), profits dropped -50% aka. 17:1 leverage. Saving the bloated and unsustainable profits, is not a trick that today's psychopaths can duplicate: 

Globalization is just human history's largest "going out of business" sale

The Big Bang Theory: Record Denialism

"Good news for the CasinoConomy: no jobs. More Fed dopium"

China collapse

Commodity collapse

Emerging Market collapse

0% perpetual interest rates

"What, me worry?"
S&P % of stocks above 200 day moving average (red)

with VIX options volatility gauge

The monkeys want to get hammered into fucking oblivion

So they will.

Denialism: The problem that fixes itself, as violently as possible

Momentum Is To the Downside

The high beta trades are gathering momentum to the downside

The (Nasdaq) Skynet illusion:
Nasdaq with % of stocks above 200 day moving average

World's largest stock:

World's largest (failed) IPO

Second largest failed IPO

Biotech Repricing:

Revenueless Biotech Re-pricing:

Casino and 'Conomy gaining downside momentum. 

The "Black Swan" Event Known As "Sell" Is Underway

Speaking of chasmic deflationary gaps, the spread between 1 year interest rates and Treasury deflation expectations has never been wider...

This is called Fantasy Island:
The Fed doesn't have one fucking brain to share between all of them... 
TIP:Tenz Inflation premium (black line)
With 1 year Treasuries (red)

Emerging Market Currencies are not impressed...

EM Debt: A "Black Swan" event called "Sell" is underway

"We're opting for the Puerto Rico option, called keeping our money"

ZH: August 3, 2015
First Default by U.S. Commonwealth In History

Bounding Gleefully Into The Abyss: No One To Stop Them

0% was a six year noose that the Idiocracy wrapped around their neck to go bungee jumping off a bridge. While they were attempting to monetize poverty, they instead got monetized. That can happen. 

It's a tale of greed, greed, more fucking greed, stupidity, incompetence and corruption.

Today's thought dealers are human garbage. Bernie Madoff is an amateur compared to the tools rationalizing today's status quo. 

Nowhere is the deflationary chasm wider than in Vancouver Canada. Real estate values are the second most over-valued in the entire world, bid up by China's fleeing slumdog millunaires, while commodity prices, backbone of the economy, collapse in real-time.

Vancouver housing prices (red) versus Canadian 10 year Treasury yields

FREE MONEY !!!
Of all countries, Canada could have avoided a major real estate debacle by learning from U.S. subprime. But instead, the exact same cheap money disaster was smugly rationalized away, all presided over by ultra-corrupt developers, banksters and the Harper W. Bush Government:

For the Final Act, The Idiocracy Will Dumpster Dive Into Oblivion

Where it belongs

Key markets are free-falling, while the Dow stair-steps below levels first reached 8 months ago...

Dow

Crude Oil Weekly

Chinese stocks

Energy Stocks

CasinoConomy

Global Stock markets ready CYNK'd to the downside
Shanghai, European Stoxx, Russell Small Cap, Hong Kong, Japan, Canada

Canadian dollar

Emerging Market bonds

All Commodities

Deflation 

"What me worry?"
Index hedging

The Consumption Orgy. Is End of Life.

But don't tell anyone, because it's apparently history's best kept secret. They didn't get the memo that was inconveniently shoved up their asses sideways in 2008.  

The latest fantasy is that everything's going to be automated at 0% cost of capital, so it's futile to ask for a wage increase.

Futile perhaps. But contrary to popular belief, there aren't going to be any robots making Big Macs  for jobless rioters in the future, while Amazon.com drones are dropping straight-from-China junk onto yuppy rooftops. Today's ill-gotten Central Bank fabricated "wealth" is every bit as unsustainable as any minimum wage increase. 

Globalization was supposed to have spread wealth, but it just happens to have spread poverty instead. Is this a great fucking system? Or what?

China's race to the bottom, ended up at the bottom. China proved that Globalization doesn't work. No country tried harder to join the league of developed nations over the past 20 years than China. They make everything now, for 1/10th of developed world wages. If they can't bootstrap themselves to the big table no one can. They don't have a middle class, what they have instead are ultra-wealthy ponzi schemers trying to buy crack shacks in Vancouver before it all implodes.   

The only modern "success" story was Japan which was the first country to use Export based strategies to bootstrap its way to the big table. Japan was successful to the extent of working its way up the value added ladder before they were beset by foreign imitators. Once that occurred, Japan's Export strategy yielded to stagnation as the strategy of duplicating everything the U.S. invents, was copied by the rest of Asia. Too many "Asian tigers" all trying to make DVD players and hard drives.

All of this points to the immutable fact that the consumption oriented lifestyle is over. It's toast. It was never sustainable, much less scalable. Developed nations use 3-5x as much resources as developing nations. In the context of a dying planet, the idea of scaling mass consumption, is wholly asinine. In the context of global debt up 50% since 2008, the Ponzi Scheme is in sudden death double overtime.   

Today's dunces in leadership solved the debt crisis by borrowing more money. And the Idiocracy doubled down in the interim. Holy fuck...

The only path forward is via the sharing economy which embeds conservation. Something Hillary Clinton is against, since it doesn't serve the interests of her campaign donors. The very concept of conservation is unknown to the Walmart generation and anathema to corporations. It's inherently unprofitable. 

Profit won't be the issue we are trying to solve in the days to come.

We need to start by raising the general IQ level which will only occur when the Idiocracy meets the pavement.