Friday, November 21, 2014

It's Official: Party Like It's 1933

The Collapse Behind the Smoke and Mirrors


The hypothesis of this blog has always been that imported Third World deflation would swamp the Developed World and force a latent convergence of living standards. 2008 of course appeared to be that "Minsky" Moment, but then Bernankenstein and the League of Extraordinary banksters went dumpster diving and rescued Globalization from self-implosion. Or did they?

Wage Deflation + Cost of Living Inflation = Middle Class Annihilation
Post-2008, Third World deflation indeed flooded the developed world, but recognizing that, Central Banksters counter-flooded the world with new money to "offset" the impacts of deflation. However, all they did was rescue the wealthy from deflation, the Middle Class has been buried under ever-growing personal debt, ever-growing sovereign debt, and higher costs of living. 

Middle Class Purchasing Power has been Obliterated
We've been so focused on that "one-time" adjustment that apparently the smoke and mirrors occurring in the meantime obfuscated the fact that the convergence of living standards has been happening all along. Third World Deflation has manifested itself in stagnant wages, a broken job market, foodstamps, and child poverty, meanwhile inflation has manifested in the cost of everything else, most notably: food, energy, education, medical - only those things that are essential to survival. This convergence in real-time has all been "covered up" by an ever-rising Dow, ongoing debt accumulation, bogus unemployment statistics, foodstamps, extended unemployment benefits, minimal welfare, and most importantly - abject denialism on the part of the lamestream media and wealthiest individuals.

Convergence is Well Underway
The thesis remains the same: the Third World was never bootstrapped to our standard of living so the developed world is right now being lowered to their standard of living, in real time. The fact that it's occurring behind a smoke screen of lies and bullshit doesn't make it any less real.

The inevitable "one-time" final event will merely bring the acknowledgement to the self-absorbed elite, that their Ponzi party is over.

The ultra-wealthy won't stop partying until their magic show reaches surprise finale

It's Official: Party Now. Implode Later (Hopefully)

BTFATH: Party like it's December 31st and the bonus cleared


Wolf Street via MW, November, 19th, 2014
"The signs are everywhere, after years of central-bank collusion to douse the world with free money: historically low yields even on the riskiest cov-lite junk bonds; corporate profit margins at the upper extreme of the range; record valuations of stocks

Junk bonds are enjoying the most extraordinary bubble ever

As long as cheap new money is available to service or pay off old debt, defaults are rare.

This is the new theme: we see the problems, they’re everywhere. We track them, we chart them, we understand them, we know they’re huge, and denying or rationalizing them would make us look silly, though plenty of folks are still denying and rationalizing them. There will be a reset of some sort, these crazy valuations will unravel, corporate profit margins will revert to the mean by overshooting it, defaults will cascade through the system, trillions will go up in smoke.

Profits now. Apocalypse later"

OPM: Other People's Money.

Smoke & Mirrors: Logic, Reason, and Elliot Wave Need Not Apply

Overnight both the ECB and Chinese Central Bank Promised More Stimulus

Currency debasement: 
The fastest way to become Third World
As it was just three weeks ago, with the Halloween "Yen Massacre", now two more major Central Banks are stepping into the hardcore currency debasement war.

The country that "won" this pyrrhic victory in 2013 was Venezuela. The Venezuelan stock market was up 500%. All it took was 56% hyper-inflation and collapse in the currency.



Thursday, November 20, 2014

Breaking Skynet: Just a Matter of Time

Etraders are getting buried by Wall Street

IPOScoop.com: 
Ramping Up the Deals Into Year End
"This week’s IPO calendar...boasts nine deals looking to raise over $4.1 billion"
"...well above 2014’s average week"

Spirits of the Animal:
IPO Mutual Fund: 


Tick Tock

Corporate Colonization: Invasive Species


Most economists and commentators are clueless about the corporate job killing machine
Having worked at 10 major corporations in 24 years, mostly as an IT Consultant, I've had the dubious pleasure of witnessing how the sausage gets made. Back in the 1990s we were told that IT was the career of the future, with "limitless opportunities". When the DotCom bubble collapsed, the future got truncated to yesterday. All of those "future IT jobs" went straight to India. Now this subsequent decade and a half roller coaster has been a continual game of musical chairs wherein each boom and bust cycle leaves fewer and fewer good jobs, not just in IT of course, but in every field. And it's the corporate errand boys who stay who get to lay off their colleagues and pretend that they won't be the next ones on the firing line. The water mark of corporate stooges keeps rising higher and higher. Soon they will put everyone out of work, including themselves, it's merely a matter of time.

And because one company's costs are another company's revenues, the inevitable stagnation of revenue could only be made up for with Central Bank provided leverage, on an ever-growing scale. In lieu of revenue growth, companies turned to "leveraged recapitalizations" to pay for special dividends and stock buybacks. Central Banks have become the handmaidens to the obliteration of the Middle Class. 

Meanwhile, it's an established fact that small businesses create more jobs than large corporations on an aggregate basis. So Central Banks have been subsidizing major corporations which have been decimating small businesses using their scale advantages, cost of capital advantages and Third World outsourcing advantages. 

What's my point? My point is that these limitless growth marketing shells known as multinational corporations are net takers from a balanced economy. They only thrive in an imbalanced economy up until such time as they have fully cannibalized it and left behind the empty husk. They contribute to supply but are net extractors of demand. Corporate colonization is the virus feeding on the carcass of the world economy. In the real world there is no such thing as limitless growth. 

Something to think about for next time. If there is one.

P.S. 
People ask me - what would it take to make me "bullish"?  

Collapse. And nothing short of it. 

Capitulation: It's Lonely at the Top

% Bears 24 Month Moving Average going back 20 years
This week's reading is at 14.9% same as last week - hovering near the 27 year low (13%)

Lehman circled in blue i.e. Wall Street was shorting subprime well before the collapse
Percent of gamblers who learned their lesson in 2008:


This will be known as Wall Street's collapse.

Harvard & Co.: Making Money While the World Burns



ZH: Hugh Hendry: 11/20/2014
Hendry was a well known "perma-bear" investment manager who capitulated last year...
"How I learned to stop worrying and love Central Banks"
"I am charged with making money and not being some moral guardian"...

Black Thursday: Exploitation Celebration

HuffPo: November 18th, 2014
15 Major Retailers Will Open on Thanksgiving This Year
"For years, the holiday shopping season started the day after Thanksgiving on "Black Friday," but retailers hungry for sales are pushing the frenzy up one day.

Walmart, Kmart, Sears, Macy's, JC Penney, Target, Kohl's, Best Buy, Staples, Sports Authority, Toys R Us, Big Lots, RadioShack, Office Max, Office Depot

[A mere] Three states - Massachusetts, Maine and Rhode Island -- ban stores from opening on the holiday.

At this rate, Thanksgiving will soon be better known as Black Thursday."


Save Money. Live in a Third World sweatshop


Wednesday, November 19, 2014

The Inconvenient Truth: Stranger to the Idiocracy

The Ron Paul / Commonsense platform that was totally ignored in 2012:

"We can't afford to invade other countries anymore"
WTF? Who will teach them "Exceptionalism" and spread McDonald's and Starbucks to every corner of the Earth?

"We can't borrow our grandchildren into oblivion anymore"
WTF? How will we fund tax cuts for RomneyBots and $500 million dollar fighter planes?

"We can't bailout the Wall Street casino anymore"
WTF? Who is going to buy my GoPro shares?

"We can't print money anymore"
WTF? Who is going to buy my GoPro shares?

"We can't buy oil from terrorist sponsoring nations anymore and, we can't inject fracking waste water into clean aquifers anymore"
WTF? I need to drive my daughter to soccer practice in my Suburban 3 times per week 50 miles roundtrip

"We can't trade openly with Third World nations anymore"
WTF? What about Black Thursday at Walmart? Who will make my iGadgets?

"We can't liquidate jobs and entire industries for a few quarters of extra profits anymore"
WTF? Who's going to tell the Billunaires they're about to become Millunaires?

"We can't feed our kids Frankenfood anymore"
WTF? Premature death by diabesity is "consumer choice"

Voters give the lies 100% approval and the liars 8% approval

This was never about intelligence, it was solely about honesty

The Grand Casino and the Illusion of Normalcy

A World of Mega-Billionaires and Homeless Children
People don't give a damn what's real anymore, all they want is the illusion of normalcy. Voters say they are sick of the status quo, but then they run away from any candidate who dares tell them the truth. They don't want the truth, they want to live in NeverLand forever.

The Dow Jones Grand Casino
The Dow provides that illusion of normalcy. Everything else can be falling apart in front of their eyes, but as long as the Dow is going up by every HFT-levitated means necessary, then people ignore everything else.

The U.S. Dow is Globalization's Berlin Wall. It provides the illusion that everything today is exactly as it has been for the past fifty years, when it's merely a total fucking fabrication.

The Canadian Dow
Canadian stocks are the most correlated to the U.S. market, since 75% of Canada's exports go to the U.S. and 65% of Canada's imports come from the U.S.:


The exact same denialism disease that allows people to ignore record child poverty, global warming, economic Shock Doctrine, geopolitical anarchy, rampant youth radicalization, fracking disasters etc. etc. is going to monkey hammer the gambling refugees into fucking oblivion.

This will be 2008 deja vu, only without the economy.

DENIALATION: Record U.S. Child Homelessness

U.S. child homelessness is at an all time high
1 in 30 children are homeless


This child's share of national debt doubled from $27k to $55k in six years. She has less than nothing to show for it.
Meanwhile, total U.S. wealth has never been higher.


Too many bubbles and busts and too many lying con men, have taken their toll.


Moral bankruptcy precedes economic bankruptcy

Shock Doctrine Burial

In summary, the entire post-2008 $33+ trillion of global fiscal and monetary stimulus was squandered on artificially inflated corporate profits, and now resides in offshore bank accounts.

There is nothing to show for $33 trillion of "stimulus", except more debt
First came the forced Wall Street bailout which paid out the GreedBots on their bets against the Middle Class. Next came the past six years' Shock Doctrine strategy by which the exact same people, via their government sock puppet lackeys, extracted an additional $33+ trillion into offshore bank accounts, leaving the Middle Class holding the bag. All between episodes of the Kardashians.

Archaeology 101


2008 was the wake up call that the most corrupt people on the planet are running a global Ponzi scheme

Tuesday, November 18, 2014

A Clockwork Time Bomb

Some are edging closer to the truth, but still ignore Third World exploitation
This article appeared in the summer and received fleeting attention:
Politico Magazine (Nick Hanauer, "Compassionate Zillionaire")
To paraphrase (my words):
  • Wealthy Americans are oblivious to income inequality
  • The wealthy believe that Middle Class Americans are "different" than Europeans, and will passively accept ever-increasing poverty into the indefinite future
  • If this continues, it will lead to bloody revolution
  • Trickle Down (Voodoo/Supply Side/Reaganomics) is an abject failure
  • Businesses want rich customers and low cost employees
  • Higher wages for the middle class would lead to increased demand, more profits and a better economy for everyone
My Comment: 
Despite being one of the few wealthy commentators who understands the gravity of the situation, he still can't admit that as long as businesses can source from the Third World for cents on the dollar, then higher wages will lead directly to unemployment. And 0% interest rates make the "robot" mass automation economy a very likely reality (leading to sovereign bankruptcy), as the cost of capital is zero and the cost of higher wages is unemployment. Central Banks in conjunction with industrial arbitrage due to failed trade policy, are impoverishing the middle class.

Imported Third World Poverty has driven the marginal cost of labour AND capital to zero, with the *only* downside being the obliteration of the Middle Class

It gets better (or actually a lot worse). Today, an apologist for the status quo refuted Hanauer's above concerns with some hardcore denialistic logic:

November 18th, 2014: The Daily Ticker
(In metaphorical terms this is what's known as "whistling past the graveyard")
To paraphrase, unless otherwise quoted...
  • The Middle Class is under severe economic pressure
  • *Some* 1%ers are "worried about revolt", citing the above article from Politico
  • There is no need to worry about revolution
  • Americans are concerned, confused, but inherently complacent
  • The "Occupy" Movement fizzled
  • The Supreme Court recently further tightened the wealthy's grip on crony government
  • There will be plenty of warning ahead of time for any signs of unrest, but today there are none (like Ferguson Missouri?)
  • The problems are real however the solutions will likely appear out of nowhere, right before disaster strikes (just like they always do in Never Never Land)
  • Don't worry, be happy
Clearly us bloggers can't compete with logic of this quality


The Business of Continuous Warfare

War is Spectacle
"The war is not meant to be won, it is meant to be continuous. Hierarchical society is only possible on the basis of poverty and ignorance. ... The war is waged by the ruling group against its own subjects and its object is not the victory, but to keep the very structure of society intact."
[George Orwell, "1984"]

Archaeology Update for: XI.XVIII.MMXIV
"Keynesian Stimulus" NeoCon-style
Here we see an example of contemporary comedy highlighting the pervasive cynicism during the late Industrial Collapse Era: 
via ZH: U.S. Foreign Policy aka. "Create your own customers"



Here we see misallocation of capital to the least productive part of society:

General Dynamics: New All Time High Today
"Markets can remain irrational a lot longer than most people can remain solvent"


"But, people can remain irrational a lot longer than any market can remain solvent"
Here we see widely ignored reality "hiding" in broad daylight...



Monday, November 17, 2014

DENIALATION: Global Warming Self-Extinction


The Noose is Tightening on Dumbfuckistan
California which is experiencing its worst drought in state history has turned to water extraction from underground aquifers on a massive scale in order to offset the loss of above ground reservoirs. None of this of course is a result of man-made Global Warming because the Energy Industry and its copious stooges have denied any and all connection between climate change and carbon.

Enter Fracking, which we all know is the Energy Industry's equivalent of using Crack Cocaine to solve drug dependency. It turns out that the Fracking Industry has been pumping waste water back into California's drinking water aquifers - up to 3 billion gallons worth. And we can be sure that this isn't happening in any other state, since we've yet to hear about it from the lamestream media which is still ensuring that all window washers are safe on tall buildings.


Denialism is a disease like Alzheimer's - it affects people's ability to think about anyone except themselves more than :15 minutes into the fucking future. Denialists are not just in denial about Global Warming, they are in denial about everything pertaining to the future of this planet beyond the next quarter's profits.

It's a disease caused by Corporate Colonization: the taking over of the planet by lobotomized drones on behalf of Corporate interests to enrich a few thousand billionaires. Government is just along for the ride.

"Fortunately, fracking waste water isn't bad for the environment"

The Truth is LiberalTM



Saturday, November 15, 2014

The Society of the Spectacle aka. Corporate Colonization

Breaking News: A window washing scaffold broke 


Because 22,000 children dying every single day, of poverty, isn't news. It's just the usual apocalypse we've come to expect. Seven 9/11s every single day in the Third World. C'est la vie.

The Society of the Spectacle: 
"All that once was directly lived has become mere representation. The decline of being into having, and having into merely appearing. The historical moment at which the commodity completes its colonization of social life."


A Society of voyeurs who would rather watch life than live it. Even life itself has been discarded.

The Seeds of Radicalization: The Failure of Globalization

Rage Against the Old Age Home
Why are young people becoming radicalized? I submit that there are multiple factors working in combination.



First and foremost, the Globalized Ponzi Economy offers no economic future...

Friday, November 14, 2014

Idiocratic Magic: Higher Debt Equals Lower Risk

Global debt has never been higher in human history
40% higher than 2008

The Greed Feedback Loop
Gamblers use borrowed money to buy financial assets, drive up the prices, and then claim that higher prices indicate reduced risk...!?

Financial Stress Self-Delusion Index
The Subprime Era is circled in Blue. No, they never learn.



Priced for Perfection Year-end Bonus
This will work out fine as long as no one sells. Ever.
S&P 500 with options implied volatility


Globalization Ground and Pound Update

84% of Major Global Markets Have Peaked
This week Malaysian stocks come off the new highs list

India and Pakistan are hanging out at all time highs as they prepare for nuclear war:
Nov. 13, 204: Pakistan tests ballistic missile
Nov. 14, 2014 Chinese troops training Pakistani soldiers

NO BUBBLE HERE:
ZH: Nov. 13th, 2014:
U.S. has most over-valued stock market in the world
ZH: Nov. 14th, 2014

Thursday, November 13, 2014

The Scylla and Charybdis of Greed and Delusion

The only way to collapse Globalization is if no one sees it happening in broad daylight - never once questioning that 3 billion people should live on $2.50/day, forever.


And otherwise too busy gambling in their casino, formerly known as the economy...

Wednesday, November 12, 2014

It's Only Ever a Matter of Time Until the Idiocracy Self-Implodes

All it takes to make people believe in the impossible is self-interest and enough time
Post-2008, the exact same psychopaths responsible for that disaster had an easy job convincing the dunced masses that 0% interest rates would succeed where 1% had failed catastrophically. After all, this decaying corpse of an old age home, we euphemistically call "society", was curled up in the fetal position and willing to guzzle any amount of Kool-Aid from their economic cult leaders running amok.

Globalization is the biggest lie in human history
Given enough time and self-interest, human beings will believe literally anything. How else did we end up with infinite conflicting versions of mankind's dispensation from God's reality - aka. religion. The more people who believe something, the more ludicrous and impossible the lie. The belief that the Globalized ponzi economy could ever raise the standard of living for the poorest people on this planet, is by far the biggest and most grotesque lie ever sold. Ironically, it's having the exact opposite effect, of bankrupting people who've bet their entire future on indefinite exploitation.

We live in the nuclear age, now blundering straight into anarchy, so one way or "the other" human beings are going to be weaned off of their fascination with fairy tales told by serial liars.

Central Banks gave people a tighter noose to wrap around their necks, and they took it with gusto:


Oil Collapse in Real Time

The two largest polluting nations in human history just signed a "climate change" deal which entails cutting emissions in the distant future by some unknown means possible. 


Breaking Skynet

Wall Street plans to dump 42 IPOs by year end (or until Skynet breaks)
Half of Wall Street wants the market to levitate ever-higher, so they can fatten their year-end bonus. The other half of Wall Street wants to dump as much junk into the market as possible, so they can fatten their year-end bonus. We already know that Etraders always lose in the long-term, but who will win in the next 6 weeks?


BTFATH: All Aboard

MW: Nov. 11th, 2014



Monday, November 10, 2014

Greed is Blindness

Waiting for Minsky

Those sanctions are working great:
Eastern European Stocks

The only person who could honestly say they were conned by this,
is a fucking blind man:
The Global Dow has failed to recover from October



Saturday, November 8, 2014

The Dumbest Society in Human History

With the attention span of a coked up flea
Post 9-11, the Fed provided 1% "Patriot Loans" which funded the housing bubble and subprime. When that all collapsed like a cheap tent, global policy-makers then turned to 0% interest rates to fund Sovereign Ponzi Bonds, *Special* Dividends, stock buybacks, ghost cities in China, Vancouver crack shacks, quarter billion dollar London penthouses and a fake Dow. 

And everyone is back onboard with the program like nothing ever happened:


For Gamblers Only
Velocity of Money versus Stocks: 
None of the Central Bank "liquidity" is for the real economy



Collapse is taking too long for the attention deficit. The casino beckons...

A Too High Tolerance for Lies and Bullshit

Ponzi Borrowing Visualized
aka. The Obama pseudo-recovery
U.S. real GDP per capita less the Federal Deficit


Having been squandered on tax cuts and military blunders, the Keynesian economic multiplier is now negative for the first time in U.S. history. Analogous to using antibiotics for 35 years straight and then acting surprised when they stop working.



A 35 year love affair with lies and bullshit



Friday, November 7, 2014

A Tale of Greed, Greed, and More Fucking Greed

"Something changed in 2008". You don't say:


I always knew that the Developed World would converge with the Third World one day.
I've never been given any reason to believe otherwise
Forward Deflation expectations as imputed from 30 Year Treasury yields. Now back in 2009
The Fed's bond buying officially ended last week, but yields keep falling. No one saw that coming - especially Prechter

ar·bi·trage: 
"buy in one locale, sell in another, until prices (aka. wages) equalize"


And for the record, stocks always catch down to bonds Reality

Round 2: Intermission is Ending

Occupy the night vision goggles


2008 changed absolutely nothing, beyond creating a generation of self-absorbed dumbfucks who now believe in the indefinite impossible. 

The five year "interlude" was a squandered gift. Let's see what changes this time...