Stock market

The Potfolio 1

youtube-Logo-4gc2reddit-logoOff the keyboard of Eddie

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Doomstead Diner on January 15, 2017

https://media.giphy.com/media/jy4kfeF7Taw48/giphy.gif

Discuss this article at the Marathon Man Newz Table inside the Diner

A few take-aways for anyone considering buying into pot stocks. These are the things you won't read anywhere else.

1. All twenty stocks in the Potfolio, every one of them, is trading at a new, higher level than last summer, before the sector got so hot in the couple of months leading up to the election. Not even the sketchiest companies have fallen back anywhere near their previous levels. This is different action from the past (like 2014, when there was a huge run-up that subsequently fizzled completely). To me, this signifies that pot stocks are in a new, real bull market. I am down on some stocks I bought near the pre-election highs, but I am calling those timing mistakes. Bull markets always correct timing mistakes.

2.Looking at momentum, and looking at charts in general, I cannot see much difference between the action in the most profitable stocks in the Potfolio, with the best fundamentals, and those that have problems, fundamentally speaking. A couple of stocks with good fundamentals are doing very well, but those with fundamentals that stink don't look bad from a price action standpoint either. Not looking at a one year chart.


Not really at a new higher level, not like the rest, but doing okay.Look at the volume spike.

3.Half the Potfolio stocks have reasonable fundamentals, considering the nature of this market. Half do not. Of the ones that do have good fundies (sales, earning, good financials, low float) there is a wide range. I rated them all on fundamentals, from +++  to –. I'll publish those results, but you can look for yourself too. Here's MJNA, for example. This is the site I'm using to evaluate them. MJNA gets a ++ by my rough estimate, in spite of a huge float.

https://research.tradeking.com/research/quotes/fundamentals.asp?mcsymbol=MJNA

4. Here's my own personal quick and dirty assessment of fundamentals of the 20 stocks now held by yours truly in the Potfolio. The symbols I use here are the ones Ameritrade uses. On the Canadian exchanges the ticker symbols are different, fwiw.

Stock                                 Fundamentals

ACBFF                                         +

AGTK                                           –

AMMJ                                          +

APHQF                                       +++

CANN                                           –

CBDS                                          —

CBIS                                           —

CGRW                                          –

CNAB                                           +

CNBX                                           +

ERBB                                            –

GRNH                                           –

MCOA                                           —

MJNA                                           ++

MNTR                                           +

MQTRF                                         ++

MSRT                                            –

OGRMF                                         ++

TRTC                                            +

TWMJF                                          ++

*Once again, these are off-the-cuff, rough estimates. Many people consider Canopy Growth to be the best pot stock of all, but I had to rate Aphria higher on fundamentals, as of last weekend, when I ran the numbers here.

5 .Canadian pot stocks are a safer buy than American companies, due to the legal issues still hanging around due to stupid bureaucratic bungling by our government. Also, the fundamentals of Canadian pot stocks, on the whole, are better. The strongest four stocks are all Canadian. I don't think that means you should write off American companies, but the crystal ball is cloudy for them, at the  moment. I noticed one MSM article yesterday that had all kinds of negative headlines about the medical use of pot, and possible negative effects, like causing schizophrenia. If you read the whole article, you learned that the headlines were mostly bullshit. Still, we see this stuff, and I think it's part of a still-powerful anti-pot lobby that is able to persuade media to smear the industry. Who would do such a thing? (I mean, besides the private prison owners, the DEA, the FBI, and the billionaires that profit off alcohol sales (Sheldon Adelson)).

6. We live in troubled times, and there is about 100% odds of a major stock market correction on the horizon.This will drive down all stock prices, and could temporarily decimate pot stocks just like everything else. If that happens, it's a gift from God. I'll be adding to the better performers. Pot is not going away. I view it as the best contrarian play in recent history.

7. So as not to appear to be baiting anyone to follow some link to a pay site, I'll list the four best Canadian stocks in the Potfolio (my opinion). I'll also add a fifth, which might arguably be on the list. They are in order of best first (overall, not just fundies): TWMJF, APHQF,OGRMF, MQTRF, and ACBFF. My rating is based on fundamentals and recent price action. Of these five, since November 2016, TWMJF has outperformed the rest handily, as far as gains.

8. Of the American companies, the best overall stocks in the Potfolio are, in order: MJNA, MNTR, and MSRT. Of these, MJNA is off-the-charts ahead in gains. It might be worth mentioning that MNTR and MSRT are not actually pot growing companies. MNTR is a financial company that specializes in raising capital for pot companies, and MSRT is a social media platform for people interested in buying and discussing pot. Many of the American pot growing companies that came highly recommended are underwater (for me) at the moment.

9. Just to cover a couple of possible questions you might have, let me say that all the selections in the Potfolio were made by me, and I deliberately avoided a few highly rated stocks. I don't like breathalyzers, so I won't buy stocks of companies looking to sell them, and I avoid pot stocks that might be considered high-flying biotechs, ones that have already shot up to $50/share and beyond. I also didn't buy ECIG because it has a dismal looking chart. FYI.

Tent Cities Mushroom

youtube-Logo-2gc2reddit-logoOff the keyboard of Michael Snyder

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Economic Collapse on September 11, 2016

Homeless

Discuss this article at the Doomsteading Table inside the Diner

Tent Cities Full Of Homeless People Are Booming In Cities All Over America As Poverty Spikes

Just like during the last economic crisis, homeless encampments are popping up all over the nation as poverty grows at a very alarming rate.  According to the Department of Housing and Urban Development, more than half a million people are homeless in America right now, but that figure is increasing by the day.  And it isn’t just adults that we are talking about.  It has been reported that that the number of homeless children in this country has risen by 60 percent since the last recession, and Poverty USA says that a total of 1.6 million children slept either in a homeless shelter or in some other form of emergency housing at some point last year.  Yes, the stock market may have been experiencing a temporary boom for the last couple of years, but for those on the low end of the economic scale things have just continued to deteriorate.

Tonight, countless numbers of homeless people will try to make it through another chilly night in large tent cities that have been established in the heart of major cities such as Seattle, Washington, D.C. and St. Louis.  Homelessness has gotten so bad in California that the L.A. City Council has formally asked Governor Jerry Brown to officially declare a state of emergency.   And in Portland the city has extended their “homeless emergency” for yet another year, and city officials are really struggling with how to deal with the booming tent cities that have sprung up

There have always been homeless people in Portland, but last summer Michelle Cardinal noticed a change outside her office doors.

Almost overnight, it seemed, tents popped up in the park that runs like a green carpet past the offices of her national advertising business. She saw assaults, drug deals and prostitution. Every morning, she said, she cleaned human feces off the doorstep and picked up used needles.

“It started in June and by July it was full-blown. The park was mobbed,” she said. “We’ve got a problem here and the question is how we’re going to deal with it.”

But of course it isn’t just Portland that is experiencing this.  The following list of major tent cities that have become so well-known and established that they have been given names comes from Wikipedia

Most of the time, those that establish tent cities do not want to be discovered because local authorities have a nasty habit of shutting them down and forcing homeless people out of the area.  For example, check out what just happened in Elkhart, Indiana

A group of homeless people in Elkhart has been asked to leave the place they call home. For the last time, residents of ‘Tent City’ packed up camp.

City officials gave residents just over a month to vacate the wooded area; Wednesday being the last day to do so.

The property has been on Mayor Tim Neese’s radar since he took office in January, calling it both a safety and health hazard to its residents and nearby pedestrian traffic.

“This has been their home but you can’t live on public property,” said Mayor Tim Neese, Elkhart.

If they can’t live on “public property”, where are they supposed to go?

They certainly can’t live on somebody’s “private property”.

This is the problem – people don’t want to deal with the human feces, the needles, the crime and the other problems that homeless people often bring with them.  So the instinct is often to kick them out and send them away.

Unfortunately, that doesn’t fix the problem.  It just passes it on to someone else.

As this new economic downturn continues to accelerate, our homelessness boom is going to spiral out of control.  Pretty soon, there will be tent cities in virtually every community in America.

In fact, there are people that are living comfortable middle class lifestyles right at this moment that will end up in tents.  We saw this during the last economic crisis, and it will be even worse as this next one unfolds.

Just like last time around, the signs that the middle class is really struggling can be subtle at first, but when you learn to take note of them you will notice that they are all around you.  The following comes from an excellent article in the New York Post

Do you see grocery stores closing? Do you see other retailers, like clothing stores and department stores, going out of business?

Are there shuttered storefronts along your Main Street shopping district, where you bought a tool from the hardware store or dropped off your dry cleaning or bought fruits and vegetables?

Are you making as much money annually as you did 10 years ago?

Do you see homes in neighborhoods becoming run down as the residents either were foreclosed upon, or the owner lost his or her job so he or she can’t afford to cut the grass or paint the house?

Did that same house where the Joneses once lived now become a rental property, where new people come to live every few months?

Do you know one or two people who are looking for work? Maybe professionals, who you thought were safe in their jobs?

Don’t look down on those that are living in tents, because the truth is that many “middle class Americans” will ultimately end up joining them.

The correct response to those that are hurting is love and compassion.  We all need help at some point in our lives, and I know that I am certainly grateful to those that have given me a helping hand at various points along my journey.

Sadly, hearts are growing cold all over the nation, and the weather is only going to get colder over the months ahead.  Let us pray for health and safety for the hundreds of thousands of Americans that will be sleeping in tents and on the streets this winter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Epiconomics 101: Our Fiscal Genome

youtube-Logo-4gc2reddit-logoOff the keyboard of Albert Bates

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on Peak Surfer on May 8, 2016

PeakSurfer

Discuss this article at the Economics Table inside the Diner

 
"Vital public services like health care, education, transportation and communication should be free."

 

In the May 2d New Yorker, Siddhartha Mukherjee wrote an ode to his mother and aunt, identical twins, taking the opportunity to dig into the roles of nature and nurture in shaping our lives, Going a step farther, he brought in one of our favorite topics here, epigenetics, or the ability of the same DNA strand to issue different instructions depending on external stimuli.

Last year, in our discussion of quantum entanglement, we observed how little of what we call our own bodies is actually our own DNA. More than 95 percent belongs to our unique, personal, coevolving microbiome that not only helps us breathe, digest, and heal illness, but influences our patterns of thought and intentions.

Mukherjee chronicled the gross result of this conspiracy, describing how two brothers, separated by geographic and economic continents, might be brought to tears by the same Chopin nocturne, as if responding to some subtle, common chord struck by their genomes, or perhaps by their epigenomes, and how two sisters — separated long before the development of language — had invented the same word to describe the way they scrunched up their noses: “squidging.”

Mukherjee overlooked the closely entangled microbial web of alien presences, but we’d observe that although these twins may have placed distance and culture between themselves, they had been together long enough to have nearly identical microbiomes from gestation, birth and infancy.

Nucleosome crystal structure at 2.8 angstrom resolution showing a disk-like shape. DNA helices at edge, histones and free proteins in center. The worm-like structures are RNA messengers. reasonandscience.heavenforum.org

Mukherjee writes:

It is a testament to the unsettling beauty of the genome that it can make the real world stick. Hindu philosophers have long described the experience of “being” as a web—jaal. Genes form the threads of the web; the detritus that adheres to it transforms every web into a singular being. An organism’s individuality, then, is suspended between genome and epigenome. We call the miracle of this suspension “fate.” We call our responses to it “choice.” We call one such unique variant of one such organism a “self.”

In his visits with various scientists Mukherjee probed the complex connections of the histones that occupy the empty spaces within the double helix and seem to possess a mysterious power to trigger or silence gene expressions. What he seems to overlook is the role of non-human microbiological agents in making these sorts of choices for their hosts. Indeed, his description of a histone begs comparison to other life forms:

In 1996, Allis and his research group deepened this theory with a seminal discovery. “We became interested in the process of histone modification,” he said. “What is the signal that changes the structure of the histone so that DNA can be packed into such radically different states? We finally found a protein that makes a specific chemical change in the histone, possibly forcing the DNA coil to open. And when we studied the properties of this protein it became quite clear that it was also changing the activity of genes.” The coils of DNA seemed to open and close in response to histone modifications—inhaling, exhaling, inhaling, like life.

***

These protein systems, overlaying information on the genome, interacted with one another, reinforcing or attenuating their signals. Together, they generated the bewildering intricacy necessary for a cell to build a constellation of other cells out of the same genes, and for the cells to add “memories” to their genomes and transmit these memories to their progeny.

While we were pondering these things, bicycling through a Spring rainstorm one morning, we tuned our mobile cyberamphibian prosthesis to Michael Hudson’s interview on Extraenvironmentalist #91. Hudson described how debt deflation is imposing austerity on the U.S. and European economies, siphoning wealth and income to the financial center while impoverishing the periphery. Its the theme of his latest book, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.

Crossing two hot wires in our rain soaked brain, the comparison between economic theory and genetics wafted a blue smoke that trailed out from under our bike helmet.

The system itself — the DNA code — is monetary policy, trade rules, labor, capital assets and other components of what we call “the economy.” The histones are the central banks and the FED that set the policies epigenetically by turning switches on or off. The wild cards are those alien protein agents that seem to bring about changes in the histones. A century ago those might have included J. D. Rockefeller and J. P. Morgan. Then came Henry Wallace and Franklin D. Roosevelt. Today they would include Jaime Dimon (Morgan Chase), Lloyd Blankfein (Goldman Sachs), Christine Lagarde (IMF), and Prince Mohammed bin Salman bin Abdulaziz Al-Saud.

It is pretty clear from most indicators that since at least 2008, and likely much earlier, our economic DNA has been instructed to express a cancer. As Gail Tyerberg observes:

Both energy and debt have characteristics that are close to “magic” with respect to the growth of the economy. Economic growth can only take place when growing debt (or a very close substitute, such as company stock) is available to enable the use of energy products.

Back in the era of cheap energy less debt was required. In our era of expensive energy, gigantic and growing debt is required. But you can only build debt on itself up to the point where confidence in repayment by those who are owed the money falters. After that, watch out. No debt, no energy. No energy, no economy.

Greg Mannarino of Traders Choice says:

Let’s just look at the stock market… there’s no possible way at this time that these multiples can be justified with regard to what’s occurring here with the price action of the overall market… meanwhile, the market continues to rise. … Nothing is real. I can’t stress this enough… and we’re going to continue to see more fakery… and manipulation and twisting of this entire system… We now exist in an environment where the financial system as a whole has been flipped upside down just to make it function… and that’s very scary. … We’ve never seen anything like this in the history of the world… The Federal Reserve has never been in a situation like this… we are completely in uncharted territory where the world’s central banks have gone negative interest rates… it’s all an illusion to keep the stock market booming.

… Every single asset now… I don’t care what asset… you want to look at currency, debt, housing, metals, the stock market… pick an asset… there’s no price discovery mechanism behind it whatsoever… it’s all fake… it’s all being distorted. … The system is built upon on one premise and that is confidence that it will work… if that confidence is rattled the whole thing will implode… our policy makers are well aware of this… there is collusion between central banks and their respective governments… and it will not stop until it implodes… and what I mean by implode is, correct to fair value.”

It’s created a population boom… a population boom has risen in tandem with the debt. It’s incredible. So, when the debt bubble bursts we’re going to get a correction in population. It’s a mathematical certainty. Millions upon millions of people are going to die on a world-wide scale when the debt bubble bursts. And I’m saying when not if… … When resources become more and more scarce we’re going to see countries at war with each other. People will be scrambling… in a worst case scenario… doing everything that they can to survive… to provide for their family and for themselves. There’s no way out of it.”

Jason Heppenstall, who lives in Cornwall, England, writes in the 22billionenergyslaves blog:

Aside from the police and the shops closing, public toilets are closed virtually all of the time, and the Post Office too is soon to close down, having been privatised and now asset stripped. The council is being forced to raise its taxation rates by 4% this year to cover the shortfall caused by spiraling costs and diminished funding from central government. Clinics and charities are being squeezed out of existence and the local council tried (and failed) to privatise the town’s midsummer festival.

My wife works in the care sector. The stories I get to hear will make you never want to be dependent on the state in your old age. If you can’t rely on your kids to look after you in your dotage it might be wise to keep a bottle of whisky and a revolver in your bottom drawer. Or maybe you'd rather die of thirst lying in your own mess because the 19-year-old unqualified carer who works for minimum wage is too busy checking Facebook on her phone to hear you pressing the emergency button by the bed.

Former US Budget Czar David Stockman wrote this week:

Owing to the recency bias that dominates mainstream news and commentary, the massive expansion of the Fed’s balance sheet depicted above goes unnoted and unremarked, as if it were always part of the financial landscape. In fact, however, it is something radically new under the sun; it’s the footprint of a monetary fraud breathtaking in its magnitude.

***

In essence, during the last 15 years the Fed has gifted the US economy with a $4 trillion free lunch. Uncle Sam bought $4 trillion worth of weapons, highways, government salaries and contractual services but did not pay for them by extracting an equal amount of financing from taxes or tapping the private savings pool, and thereby “crowding out” other investments.
 

This is not Al Gore. It is Elon Musk, a beneficiary of govt largess

Instead, Uncle Sam “bridge financed” these expenditures on real goods and services by issuing US treasury bonds on a interim basis to clear his checking account. But these expenses were then permanently funded by fiat credits conjured from thin air by the Fed when it did the “takeout” financing. Central bank purchase of government bonds in this manner is otherwise and cosmetically known as “quantitative easing” (QE), but it’s fraud all the same.

In essence, Uncle Sam has gotten $4 trillion of “something for nothing” during the last 16 years, while the Washington politicians and policy apparatchiks were happy to pretend that the “independent” Fed was doing god’s work of catalyzing, coaxing and stimulating more jobs and growth out of the US economy.

What the Fed was actually doing was falsifying and inflating the price of financial assets. As Michael Hudson points out, the prime error is placing the financial sector in the same column as honest labor or capital contributions. Finance is actually a drain on those things. It is a withdrawal from productivity, not a contributor to GDP.

Stockman agrees:

But financial engineering does not add to GDP or increase primary spending; it results in the re-pricing of existing financial assets. That is, it gooses stock prices higher, makes executive stock options more valuable and confers endless windfalls on the fast money speculators who work the financial casinos.

Last month, Mario Draghi, the European Central Bank president, became the first central banker to take seriously the idea of helicopter money – the direct distribution of newly created money from the central bank to eurozone residents.
 

Germany’s leaders have reacted furiously and are now subjecting Draghi to nationalistic personal attacks. Less visibly, Italy has also led a quiet rebellion against the pre-Keynesian economics of the German government and the European commission. In EU councils and again at this month’s IMF meeting in Washington, DC, Pier Carlo Padoan, Italy’s finance minister, presented the case for fiscal stimulus more strongly and coherently than any other EU leader. More important, Padoan has started to implement fiscal stimulus by cutting taxes and maintaining public spending plans, in defiance of German and EU commission demands to tighten his budget. As a result, consumer and business confidence in Italy have rebounded to the highest level in 15 years, credit conditions have improved, and Italy is the only G7 country expected by the IMF to grow faster in 2016 than 2015 (albeit still at an inadequate 1% rate).

The Automatic Earth

With England jumping ship and Germany saying nicht to every reform proposal, the EU is headed for a disaster but Italy seems to be able to still think outside the box. To us this suggests the potential for alien-led histone modification in the DNA of modern finance.

Heppenstall says:

The irony of being called anti-European is that I am ardently pro-European. I’ve lived in four different EU countries, travelled all over and am married to an Italian Dane. Europe, to me, is the most diverse place in the world and has an amazing spread of history and culture. My ideal life would involve spending several months each year travelling around Europe in a camper van and getting to know it in an even more intimate manner. The EU is not Europe; it’s an abstract concept masking a faceless undemocratic organisation that funnels wealth from one place to another and keeps its modesty intact behind a fig leaf of supposed liberalism.

It doesn’t have to be that way. We could still have a Europe united around some core values other than money and power and capitalism. How about a Europe focused on an emerging eco-consciousness? Or what about remaking it as a loose cooperative of bioregions? Or perhaps, at the very least, we could all agree on a shared constitution founded on liberty, equality and fraternity. Former Greek finance minister Yanis Varoufakis has suggested something along those lines, setting up a pan-European umbrella group called DiEM25 that aims to shake things up ‘gently, compassionately but firmly.’ Perhaps there could be more debate about what kind of Europe would be better suited to weathering the coming financial, ecological and energy shocks without causing so much collateral damage to both itself and other nations.

Until that happens we’ll just have to stand back and watch the fireworks. Big institutions like the EU are like skyscrapers; they don’t come crashing down to the ground without taking out plenty of other nearby buildings and the EU is like the leaning tower of Pisa on steroids.  Big things are an artifact of the age of oil – the future is necessarily smaller and more local. The best course of action is to stop arguing over whether it is best to be stood on top of the creaking tower it or beside it, and simply get the hell out of the way before it goes over. 

Draghi’s Italy, it should be recalled, was the country whose Supreme Court last month ruled that Roman Ostriakov, a young homeless man who had bought a bag of breadsticks from a supermarket but had slipped a wurstel – a small sausage – and cheese into his pocket, had acted out of an immediate need by stealing a minimal amount of food, and therefore had not committed a crime. Carlo Rienzi, president of Codacons, an environmental and consumer rights group, told Il Mesaggero, “In recent years the economic crisis has increased dramatically the number of citizens, especially the elderly, forced to steal in supermarkets to be able to make ends meet.” La Stampa said that, for supreme court judges, the right to survive still trumped property rights, a fact that would be considered “blasphemy in America.”

Michael Hudson

Hudson is another epigenetic secret agent. He advocates a debt jubilee similar to what Truman pushed on Europe after World War II, creating the “German Economic Miracle.” In Hudson’s view, the quickest route to reform would be shifting from taxing honest labor to taxing unearned income and capital gains; from burdening the shrinking middle class to shrinking the rentier class. Vital public services like health care, education, transportation and communication should be free.

Ellen Brown, who has been beating the drum for public banks from her Web of Debt page and books, notes that the Bank of North Dakota, the nation’s only state-owned depository bank, was more profitable last year than J.P. Morgan Chase and Goldman Sachs, and that was after the fracked gas bubble burst. She urges local governments everywhere to bypass the Fed and the vulture banking system and create their own public banks.

Ellen Brown

North Dakota has led the way in demonstrating how a state can jump-start a flagging economy by keeping its revenues in its own state-owned bank, using them to generate credit for the state and its citizens, bypassing the tourniquet on the free flow of credit imposed by private out-of-state banks. California and other states could do the same. They could create jobs, restore home ownership, rebuild infrastructure and generally stimulate their economies, while generating hefty dividends for the state, without increasing debt levels or risking public funds – and without costing taxpayers a dime.

The ability of these foreign antagonists to infect the global economy with a new narrative is a relatively recent phenomenon. The false narrative embedded by Bretton Woods and the Chicago School are not that thoroughly ensconced that they can’t be evicted. There is no reason why the inane policies of economic astrologers could not be quickly reversed by protein protagonists with simple but compelling histological reforms, such as basing the future on a bioeconomy that sequesters carbon and runs on sunlight.

Next week: Epiconomics 102: The Sunlight Economy 

President Trump

Il Duncegc2reddit-logoOff the keyboard of Albert Bates

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on Peak Surfer on January 31, 2016

PeakSurfer

Discuss this article at the Geopolitics Table inside the Diner

"From here this presidency sure looks like an unqualified success."

 

  It has been more than a year now since The Donald moved into 1600 Pennsylvania Avenue and he continues to be thwarted at every turn by that do-nothing Congress and the Democrat Party.

We all had expected that by now the Asian countries that have dumped their goods here and almost bankrupted our country by causing our trade deficit would have felt the bite of tough new rules, but the Trans Pacific Partnership tied Donald's hands on that one.

Mexico still won’t keep its illegals — the source for Americans’ drugs — on their side of the border. NAFTA prevented the border closing there. It wouldn't even take those Mexican tractor-trailers off our roads, and who knows how many of them are filled with illegals being dropped off in Ohio and Pennsylvania? Still, we are pouring concrete for a bigger wall all the time, whether Mexico pays for it or not. They should because they created this problem, but so far Donald has not gotten a single peso from the ingrates.

And, of course, the Muslims have always been fighting us when they are not too busy squirmishing between themselves. The Donald's executive order closed all our borders to refugees from Syria, Libya, Egypt, and Afghanistan; countries populated by still more ingrates who are unwilling to pay for the wars that we started on their behalf. And wouldn't you know? That is now going to the Supreme Court, challenged by the Democrat Party as unconstitutional. As if the President of the United States, as Commander in Chief, doesn't have the power to keep all the riffraff out. That wishy washy Supreme Court is not conservative enough! The Donald will get his chance to change that, soon, with real right-winging, bitter-clinging, proud clingers of our guns, our God, and our religion, and our Constitution.

Solving our trade deficit wasn't as simple as ending the supply of cheap Chinese stuff. Donald got around Congress and the TPP by calling that retailer CEO summit at the White House. But it still comes in from places protected by those bad trade deals negotiated by idiot presidents who didn't know the first thing about the art of the deal. Now the Chinese stuff goes to Australia and gets rebranded before the container ships take it to WalMart. That is why the prices we pay didn't change much, so I guess we can be grateful. The Chinese and Koreans should be too, but are they? No way.

When the Donald sent the marines to grab Iraq’s oilfields last month there was a big uproar at the UN but what could they do, the toothless liberals? Donald just vetoed any Security Council resolution they passed. Now we control a significant supply of the world’s oil and can set prices where we like, and not just where the Saudis want them, in the basement. We all have to put up with higher prices at the pump now, but rising crude prices have stopped the slump in fracked gas futures and got us back on the path to the energy independence that made America strong.

If the Saudis gripe about that, Donald says he is ready to send a bunch of oil sheiks to his reopened Guantanamo just to let them know who's in charge. Sure, he hasn't gotten rid of ISIS yet, but give him time. He will get their oil too, and you can take that to the bank. The marines are just settling into Iraq now. Syria is a quick hop.

Donald's poll numbers are quite good, and it is long past the honeymoon stage. People are calling him the Second Great Communicator. Doubters have to eat crow. Our military is stronger than ever, and we are respected again, whether foreigners like it or not.

We will know soon whether that do-nothing Congress passes the President's energy plan and American builders can get started on those 100 new nuclear plants. That will be a real shot in the arm for the economy, as well as making energy cheap again. People say the President is a climate denier, but those new nukes will do more to stop climate change than anything Obama did in Paris. Put a trillion dollars into nuclear power, like we will, and your other countries can be energy independent too, you UN people.

People criticize the President for ordering the National Football League to move the Super Bowl to New Jersey, but now that more than a third of the teams have relocated to California, it seems only reasonable that the East Coast should get its share of the action. Some of the best football we've ever seen was played in snow.

When the Donald took office the economy was in shambles. Stocks were getting schlonged. Oil, coal, and car companies were talking bankruptcy and wanting bailouts. The Donald doesn't do bailouts. How about that?

The Donald met with all the banks and cut them checks. He refinanced the country. Remember: this is a guy who knows what it is to go bankrupt and still wind up with high-rise penthouses and golf courses. That's exactly what he did for America. Who cares what the dollar is now worth in Timbuktu? We will soon have legal casinos in every city and every state, and they won't be run by Indians, either.

We are still only a year into this presidency, but from here it sure looks like an unqualified success. We guess that's only to be expected when you buy the best.
 

“I’m Donald Trump and I endorse this message” — Trump for President 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SPECIAL REPORT: STOCK CRASH! IT’S ON LIKE DONKEY KONG!

crash-graph-300x186gc2reddit-logoOff the keyboard, microphone and video editor of RE

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on the Doomstead Diner on January 18, 2016

Discuss this Rant at the Diner TV Table inside the Diner

Audio Only:

Download the mp3 from Diner Soundcloud

 

 

 

 

 

 

 

 

Events are moving so fast now that I need to disrupt my regularly scheduled Collapse Rants for a SPECIAL BULLETIN.

It's ON LIKE DONKEY KONG now!

http://millennialmainframer.com/wp-content/uploads/blogger/-ONcYawQtDdg/Ucnz70N-uMI/AAAAAAAAZKs/S90PMYtSbAA/s1600/donkeykonganimated.gif

Global markets are in complete turmoil and the bottom is nowhere in sight. Oil prices have collapsed below the $30 handle to around $28 on the futures market this morning. The Saudi market is now in uber-bear territory, off 50% from its peak.

Will the PPT be able to step up to the plate today and halt the PANIC RUN? What rabbit can they pull out of the Hat this time?

http://4.bp.blogspot.com/-Pcy7QK99Skc/U1CP4yRr2JI/AAAAAAAALI4/jGTMiXjDqjA/s1600/bullwinkle_bear.png

What TBTF entity will be the first to Cry Uncle and roll over and die?

It's a full on clusterfuck to start the week here, and the cracks in the dyke are getting bigger pretty fast.

Fasten your seatbelts Diners, because it looks like the Titanic has hit the Iceberg.

http://media2.onsugar.com/files/2014/04/11/918/n/1922507/0e53c8d697360b88_96518519.xxxlarge_2x.jpg

 

 

 

 

The Stock Markets Of The 10 Largest Global Economies Are All Crashing

crash-graph-300x186gc2smOff the keyboard of Michael Snyder

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on the Economic Collapse on September 24, 2015

Globe Interconnectedness

Discuss this article at the Economics Table inside the Diner

You would think that the simultaneous crashing of all of the largest stock markets around the world would be very big news.  But so far the mainstream media in the United States is treating it like it isn’t really a big deal.  Over the last sixty days, we have witnessed the most significant global stock market decline since the fall of 2008, and yet most people still seem to think that this is just a temporary “bump in the road” and that the bull market will soon resume.  Hopefully they are right.  When the Dow Jones Industrial Average plummeted 777 points on September 29th, 2008 everyone freaked out and rightly so.  But a stock market crash doesn’t have to be limited to a single day.  Since the peak of the market earlier this year, the Dow is down almost three times as much as that 777 point crash back in 2008.  Over the last sixty days, we have seen the 8th largest single day stock market crash in U.S. history on a point basis and the 10th largest single day stock market crash in U.S. history on a point basis.  You would think that this would be enough to wake people up, but most Americans still don’t seem very alarmed.  And of course what has happened to U.S. stocks so far is quite mild compared to what has been going on in the rest of the world.

Right now, stock market wealth is being wiped out all over the planet, and none of the largest global economies have been exempt from this.  The following is a summary of what we have seen in recent days…

#1 The United States – The Dow Jones Industrial Average is down more than 2000 points since the peak of the market.  Last month we saw stocks decline by more than 500 points on consecutive trading days for the first time ever, and there has not been this much turmoil in U.S. markets since the fall of 2008.

#2 China – The Shanghai Composite Index has plummeted nearly 40 percent since hitting a peak earlier this year.  The Chinese economy is steadily slowing down, and we just learned that China’s manufacturing index has hit a 78 month low.

#3 Japan – The Nikkei has experienced extremely violent moves recently, and it is now down more than 3000 points from the peak that was hit earlier in 2015.  The Japanese economy and the Japanese financial system are both basket cases at this point, and it isn’t going to take much to push Japan into a full-blown financial collapse.

#4 Germany – Almost one-fourth of the value of German stocks has already been wiped out, and this crash threatens to get much worse.  The Volkswagen emissions scandal is making headlines all over the globe, and don’t forget to watch for massive trouble at Germany’s biggest bank.

#5 The United Kingdom – British stocks are down about 16 percent from the peak of the market, and the UK economy is definitely on shaky ground.

#6 France – French stocks have declined nearly 18 percent, and it has become exceedingly apparent that France is on the exact same path that Greece has already gone down.

#7 Brazil – Brazil is the epicenter of the South American financial crisis of 2015.  Stocks in Brazil have plunged more than 12,000 points since the peak, and the nation has already officially entered a new recession.

#8 Italy – Watch Italy.  Italian stocks are already down 15 percent, and look for the Italian economy to make very big headlines in the months ahead.

#9 India – Stocks in India have now dropped close to 4000 points, and analysts are deeply concerned about this major exporting nation as global trade continues to contract.

#10 Russia – Even though the price of oil has crashed, Russia is actually doing better than almost everyone else on this list.  Russian stocks have fallen by about 10 percent so far, and if the price of oil stays this low the Russian financial system will continue to suffer.

What we are witnessing now is the continuation of a cycle of financial downturns that has happened every seven years.  The following is a summary of how this cycle has played out over the past 50 years

  • It started in 1966 with a 20 percent stock market crash.
  • Seven years later, the market lost another 45 percent (1973-74).
  • Seven years later was the beginning of the “hard recession” (1980).
  • Seven years later was the Black Monday crash of 1987.
  • Seven years later was the bond market crash of 1994.
  • Seven years later was 9/11 and the 2001 tech bubble collapse.
  • Seven years later was the 2008 global financial collapse.
  • 2015: What’s next?

A lot of people were expecting something “big” to happen on September 14th and were disappointed when nothing happened.

But the truth is that it has never been about looking at any one particular day.  Over the past sixty days we have seen absolutely extraordinary things happen all over the planet, and yet some people are not even paying attention because they did not meet their preconceived notions of how events should play out.

And this is just the beginning.  We haven’t even gotten to the great derivatives crisis that is coming yet.  All of these things are going to take time to fully unfold.

A lot of people that write about “economic collapse” talk about it like it will be some type of “event” that will happen on a day or a week and then we will recover.

Well, that is not what it is going to be like.

You need to be ready to endure a very, very long crisis.  The suffering that is coming to this nation is beyond what most of us could even imagine.

Even now we are seeing early signs of it.  For instance, the mayor of Los Angeles says that the growth of homelessness in his city has gotten so bad that it is now “an emergency”

On Tuesday, Los Angeles officials announced the city’s homelessness problem has become an emergency, and proposed allotting $100 million to help shelter the city’s massive and growing indigent population.

LA Mayor Eric Garcetti also issued a directive on Monday evening for the city to free up $13 million to help house the estimated 26,000 people who are living on the city’s streets.

According to the Los Angeles Homeless Services Authority, the number of encampments and people living in vehicles has increased by 85% over the last two years alone.

And in recent years we have seen poverty absolutely explode all over the nation.  The “bread lines” of the Great Depression have been replaced with EBT cards, and there is a possibility that a government shutdown in October could “suspend or delay food stamp payments”

A government shutdown Oct. 1 could immediately suspend or delay food stamp payments to some of the 46 million Americans who receive the food aid.

The Agriculture Department said Tuesday that it will stop providing benefits at the beginning of October if Congress does not pass legislation to keep government agencies open.

“If Congress does not act to avert a lapse in appropriations, then USDA will not have the funding necessary for SNAP benefits in October and will be forced to stop providing benefits within the first several days of October,” said Catherine Cochran, a spokeswoman for USDA. “Once that occurs, families won’t be able to use these benefits at grocery stores to buy the food their families need.”

In the U.S. alone, there are tens of millions of people that could not survive without the help of the federal government, and more people are falling out of the middle class every single day.

Our economy is already falling apart all around us, and now another great financial crisis has begun.

When will the “nothing is happening” crowd finally wake up?

Hopefully it will be before they are sitting out on the street begging for spare change to feed their family.

The Crash of 2015: It’s Here

Off the keyboard of Thomas Lewis

Follow us on Twitter @doomstead666

Friend us on Facebook

 

panic

A CNBC anchor after trying to explain hedging against the volatility of stocks indexed to the Volatility Index. The end is near now.


Published on the Daily Impact on August 31, 2015

Visit the New Diner News Page for Daily Updates from around the Collapse Blogosphere


Screw it, I’m calling it. I’ve been watching the so-called “markets” of China, the United States and a couple dozen other countries fall off a cliff, get up, stagger upward, fall off another cliff, and repeat. I’ve been listening to the chattering class say over and over again, this is normal, seen this before, everybody buy the dip. I’ve been watching the zombie oil-fracking revolution in this country go into spasms, jerking a few feet forward, a few feet back, gasping for breath, while the cheerleaders agree: perfectly normal, blood pressure okay, reflexes good, lend them more money. This is not normal, it is not okay, it is the Crash of 2015.

We will not likely agree on this until we stop using wildly different languages with which to discuss it. First of all, to refer to these things as “stock markets,” as if they were places where equities were bought and sold based on the soundness and prospects of the companies listed, is akin to putting your faith in the tooth fairy and Santa Claus.

These places are casinos filled with gambling addicts using other people’s money to bet, not on the future of a stock but on the popularity of a stock among the greater fools on whom the gambler must unload the shares of Consolidated Aggregators he just bought on the dip. In this casino, trading in shares themselves is like playing the slot machines, there in the lobby of the casino for the amusement of the little people risking their quarters. The real games are played in private rooms with derivatives, futures, hedges, credit default swaps, junk bonds. The master of the universe are even gambling on the outcomes of corporate lawsuits (and for what reason, do we suppose, has that practice alone drawn the disapproving attention of the drones of Washington?). They are buying hedges against the volatility of securities indexed to the volatility of the market. If you can think about that one for more than 30 seconds without your head exploding, your mellowness index is in the stratosphere. Increasingly the gambling is being done by machines, programmed by the Masters to detect the circumstances under which they are to blow up the world.  

The commerce of the world, like the Gulf Stream in the Atlantic Ocean, is slowing down, bestowing unimaginable collateral damage as its does so. The prices of all industrial commodities (not just oil) have tanked, taking down the economies and currencies of the countries who depend for their existence on the exploitation of their natural resources. The volume of stuff being shipped from pace to place has withered. Both commerce and the Gulf Stream are losing the sources of their energy: in the case of the Gulf Stream, it’s temperature differential; in the case of trade, it’s money in the hands of the middle class, being spent on consumer goods.

Money, not credit. The Masters like to pretend they are the same thing but they are not. To issue consumers more credit cards, or more mortgage refi’s, is not the same thing as providing them with a living wage. To inject more money into the equity of banks and corporations, as the central banks have been doing for decades, does not, it turns out, create a tide of well being that lifts all boats. It’s like feeding the cow at the wrong end. No matter how much nutritious food you ram in, it’s just not going to help.

They have got away with this madness — the Masters, the Pundits, the Shills and the Gamblers — largely because decent people cannot believe anyone could possibly be crazy enough to do what they seem to be doing. Decent people tend not to remember the Housing Bubble Crash, the Dot-Com Crash, the Savings and Loan Crash, the Enron Crash, etc. etc.

Even if they’re gambling, surely it’s still true that the house never loses? Yes, that’s still true. As long as there are customers in the house. Look around. The customers are cashing in their chips and leaving China, the emerging markets, the junk-bond markets and the US markets as fast as they can without actually yelling “fire” and trampling each other.

Believe it. They are crazy, and this is the Crash of 2015.

It is not the Crash of the Industrial Age, not yet, although that, too, is ongoing. We will probably emerge from the Crash of 2015 onto the littered, downward slope of depression toward the ultimate collapse, still it seems several uncomfortable years in the future.  But we will have cause to remember the Crash of 2015.


Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

The Crash of 2015: On Track, Behind Schedule

Off the keyboard of Thomas Lewis

Follow us on Twitter @doomstead666

Friend us on Facebook

As demonstrated in Paris in 1895, what matters is not whether the train wreck was on time. What matters is that it’s a wreck. (Wikipedia Photo)

Published on the Daily Impact on June 22, 2015

Visit the New Diner News Page for Daily Updates from around the Collapse Blogosphere


The dominoes are toppling, just as we have been expecting for nearly a year now, but slower than we thought. The fact-resistant strain of humans (Thank you, Borowitz Report) now in charge of the world are trying to use vast amounts of money to counteract gravity, and, counterintuitively, succeeded in slowing the dominoes’ fall. But not for long.

To review our expectations of last summer: the hideous decline rate of fracking wells (of up to 90% in three years) was forcing frackers to borrow huge amounts of money to put up large numbers of new wells at a breakneck pace in order to preserve the illusion (it was always an illusion) of a revolution in American oil leading to prosperity and “energy independence.” On average, it cost the frackers over $4 to get $1 of revenue in the door during the first quarter of this year. A year ago, with oil commanding $100 a barrel, they were still spending $2. As the old joke goes, the only way to make any money when you’re losing on every transaction is to make up for it with volume. But since most of the money spent was capital expenditure — i.e. new wells — their operating statements showed profits and nobody looked at the balance sheets.

We ran this scenario on our abacus and concluded that these guys were going to go broke. And that when they did, not only would U.S. oil production resume its long slide toward zero, begun in 1970, but they would blow up the junk-bond market, almost certainly the bond market, and probably the stock market. These expectations were in place before the price of oil tanked last fall, and set the expectations in concrete.

Now, let’s review the state of play:

Are they broke? Pretty much. As Bloomberg reports (“The Shale Industry Could be Swallowed by its Own Debt”), S&P has so far this year lowered the outlook or downgraded the credit of almost half the exploration and production companies it rates. Amazingly, despite the awful numbers, lenders have continued to pour money into the zombie companies (See “Oil Money: Too Dumb to Fail”) as they struggle to keep pumping so they can turn over their debt so they can keep pumping. Remember the old advice — when you find yourself in a hole, stop drilling? They don’t.

Has the junk-bond market fallen apart yet? Looks like it. “Investors” experiencing sudden attacks of vertigo pulled $5.5 billion out of the junk bond market in the two weeks ending June 17, and $3.6 billion so far this year out of the funds based on high-risk “leveraged” loans.

Is the regular bond market in danger? Oh, yeah. According to Bank of America Merrill Lynch, last week “High grade credit funds suffered their biggest outflow this year, and double the previous week.” Some of this was no doubt related to the hair-on-fire volatility of the European and Asian bond markets during the last month or so, but not all of it.

Is oil fracking production declining? Yes, indeed. According to the U.S. Energy Information Administration, fracking output declined last month, by more this month, and will continue falling off at least through the end of the year. (It’s really a forever thing, but they can’t bring themselves to say it.) [See “It’s Official: The Shale-Oil Boom is Over”]. Worldwide, 150,000 jobs in oil and gas production have vaporized, with the U.S. having the “fastest and steepest decline.”

Is the stock market in trouble? Deeply. On Thursday, the Nasdaq tech-stock index reached its highest number in history, but only the uninformed, the inexperienced and the truly, deviously evil are celebrating it. It’s like having a party because grandma, at 99, just recorded her highest temperature ever. Stocks are hideously over-valued, highly leveraged, and insanely volatile — all sure signs of impending crash. Every day now, you can find some Master of the Universe talking of the need to have at hand a bag of “physical cash” in preparation for what they are referring to as a “systemic event.”

How much more clearly, and with how much more authority, could we possibly be told to brace for impact?


Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

Bullshit in the China Shop

logopodcastOff the microphone of RE

Follow us on Twitter @doomstead666
Friend us on Facebook

Aired on the Doomstead Diner on March 28, 2015

bull_china

Discuss this Rant at the Podcast Table inside the Diner

http://jeffreyhill.typepad.com/.a/6a00d8341d417153ef0120a790a439970b-pi

Snippet:

…As the monetary system shows ever more signs of instability every day, there are still plenty of “China Bulls” out there, although these days they seem to be more of the Geopolitical persuasion than the Economic one. Today’s China Bulls are folks like Pepe Escobar, Dmitry Orlov and The Saker, and they talk about/promote the idea there will be a great new Eurasian Empire formed up by integration of the Chinese and Ruskie economies along a “New Silk Road and mega projects like a High Speed Rail line between Beijing and Moscow will be built.

These folks appear to be a bit behind the curve though, because while they are talking about mega investments in another form of technological futures, the OLD BEARS like Jim Rogers are RUNNING FOR THE HILLS! Capital can’t fly fast enough out from the hills of emerging economies, and this isn’t just the Ruskies and Chinese, but the Brazilians, Indians, Pakistanis, South Koreans…etc, NONE of these places are too popular anymore for getting lots of Funny Money support. How can you tell? Simple, just look at the FOREX market, every last one of these currencies is depreciating in value, in many cases rther rapidly nearly at the scale of hyperinflation. There are some dimwits still chasing yield in these markets, but anyone with any CFS knows it’s time to GTFO of Dodge!…

For the rest, LISTEN TO THE RANT!!!

http://politicsny.net/images/20130122_bull_in_a_china_shop.jpg

The Crash of 2015: The End of the Beginning

From the keyboard of Thomas Lewis
Like us on Facebook
Follow us on Twitter @Doomstead666

Coming soon to an economy near you: a two-train wreck.

Coming soon to an economy near you: a two-train wreck.

First published at The Daily Impact  March 11, 2015

The setup continues of the double train wreck that will decimate the U.S. economy this year; the switches have been thrown to prevent either train from leaving the track, and the engines are accelerating. It doesn’t take much perspective, now, to see both trains, closing fast.

[Note: The Crash of 2015 is not expected to be the collapse of the global industrial economy, which will take a little longer.  Just another lurch downward of the shatteredTitanic, further unsettling those passengers who do not believe in icebergs.]

The end of the first quarter of 2014 will mark the end of the beginning of this disaster. Train Number One, the fracking oil industry, has only enough fuel on board to go a few more miles — it’s accelerating nevertheless, to impress its passengers — but that’s okay because impact will occur just before the engine quits. Train Number Two, the stock market, which for years has been speeding along the edge of a cliff, burning seemingly endless supplies of cheap money, has nowhere to go but down.

For Train Number One, fracking, the beginning of the beginning was last year’s plunge in crude oil prices. That led to massive and spreading layoffs, a stark decline in the number of rigs fracking for oil, but no reduction in  production. The reason: every producer in the fracking patch is up to its eyeballs in debt because each of these 10-million-dollar wells is only good for a couple of years of good production.

So what has March brought us from the patch, as the trains roll on?

How are things going on Train Number Two, the stock market? For a full, hair-igniting analysis read David Stockman’s essay, “Six Years Of Bull Market Bull.” Have the Pepto Bismol handy.

Suffice it to say here in summary that price-earning ratios remain swollen and inflamed, volatility remains violent, and leveraging is still malevolent. Or to put it in non-technical terms: the overwhelming majority of real businesses and real people are suffering and losing ground, while the stock market and the government estimates of “growth” magically levitate into the ether. This is what goeth before a fall.

Thus endeth the beginning. The middle of the end starts April one, when banks review the value of the assets on which they have given credit, and when all kinds of bonds and interest payments will be due.

Hear the rails humming? The trains are coming.

 

***

 

Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

 

 

Most People Cannot Even Imagine That An Economic Collapse Is Coming

Off the keyboard of Michael Snyder

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Economic Collapse on November 2, 2014

dole-street_2387656b

Discuss this article at the Economics Table inside the Diner

Thinking - Public DomainThe idea that the United States is on the brink of a horrifying economic crash is absolutely inconceivable to most Americans.  After all, the economy has been relatively stable for quite a few years and the stock market continues to surge to new heights.  On Friday, the Dow and the S&P 500 both closed at brand new all-time record highs.  For the year, the S&P 500 is now up 9 percent and the Nasdaq is now up close to 11 percent.  And American consumers are getting ready to spend more than 600 billion dollars this Christmas season.  That is an amount of money that is larger than the entire economy of Sweden.  So how in the world can anyone be talking about economic collapse?  Yes, many will concede, we had a few bumps in the road back in 2008 but things have pretty much gotten back to normal since then.  Why be concerned about economic collapse when there is so much stability all around us?

Unfortunately, this brief period of stability that we have been enjoying is just an illusion.

The fundamental problems that caused the financial crisis of 2008 have not been fixed.  In fact, most of our long-term economic problems have gotten even worse.

But most Americans have such short attention spans these days.  In a world where we are accustomed to getting everything instantly, news cycles only last for 48 hours and 2008 might as well be an eternity ago.

In the United States today, our entire economic system is based on debt.

Without debt, very little economic activity happens.  We need mortgages to buy our homes, we need auto loans to buy our vehicles and we need our credit cards to do our shopping during the holiday season.

So where does all of that debt come from?

It comes from the banks.

In particular, the “too big to fail banks” are the heart of this debt-based system.

Do you have a mortgage, an auto loan or a credit card from one of these “too big to fail” institutions?  A very large percentage of the people that will read this article do.

And a lot of people might not like to hear this, but without those banks we essentially do not have an economy.

When Lehman Brothers collapsed in 2008, it almost resulted in the meltdown of our entire system.  The stock market collapsed and we experienced an absolutely wicked credit crunch.

Unfortunately, that was just a small preview of what is coming.

Even though a few prominent “experts” such as New York Times columnist Paul Krugman have declared that the “too big to fail” problem is “over”, the truth is that it is now a bigger crisis than ever before.

Compared to five years ago, the four largest banks in the country are now almost 40 percent larger.  The following numbers come from a recent article in the Los Angeles Times

Just before the financial crisis hit, Wells Fargo & Co. had $609 billion in assets. Now it has $1.4 trillion. Bank of America Corp. had $1.7 trillion in assets. That’s up to $2.1 trillion.

And the assets of JPMorgan Chase & Co., the nation’s biggest bank, have ballooned to $2.4 trillion from $1.8 trillion.

At the same time that those banks have been getting bigger, 1,400 smaller banks have completely disappeared from the banking industry.

That means that we are now more dependent on these gigantic banks than ever.

At this point, the five largest banks account for 42 percent of all loans in the United States, and the six largest banks account for 67 percent of all assets in our financial system.

If someone came along and zapped those banks out of existence, our economy would totally collapse overnight.

So the health of this handful of immensely powerful banking institutions is absolutely critical to our economy.

Unfortunately, these banks have become deeply addicted to gambling.

Have you ever known people that allowed their lives to be destroyed by addictions that they could never shake?

Well, that is what is happening to these banks.  They have transformed Wall Street into the largest casino in the history of the world.  Most of the time, their bets pay off and they make lots of money.

But as we saw back in 2008, when they miscalculate things can fall apart very rapidly.

The bets that I am most concerned about are known as “derivatives“.  In essence, they are bets about what will or will not happen in the future.  The big banks use very sophisticated algorithms that are supposed to help them be on the winning side of these bets the vast majority of the time, but these algorithms are not perfect.  The reason these algorithms are not perfect is because they are based on assumptions, and those assumptions come from people.  They might be really smart people, but they are still just people.

If things stay fairly stable like they have the past few years, the algorithms tend to work very well.

But if there is a “black swan event” such as a major stock market crash, a collapse of European or Asian banks, a historic shift in interest rates, an Ebola pandemic, a horrific natural disaster or a massive EMP blast is unleashed by the sun, everything can be suddenly thrown out of balance.

Acrobat Nik Wallenda has been making headlines all over the world for crossing vast distances on a high-wire without a safety net.  Well, that is essentially what our “too big to fail” banks are doing every single day.  With each passing year, these banks have become even more reckless, and so far there have not been any serious consequences.

But without a doubt, someday there will be.

What would you say about a bookie that took $200,000 in bets but that only had $10,000 to cover those bets?

You would certainly call that bookie a fool.

But that is what our big banks are doing.

Right now, JPMorgan Chase has more than 67 trillion dollars in exposure to derivatives but it only has 2.5 trillion dollars in assets.

Right now, Citibank has nearly 60 trillion dollars in exposure to derivatives but it only has 1.9 trillion dollars in assets.

Right now, Goldman Sachs has more than 54 trillion dollars in exposure to derivatives but it has less than a trillion dollars in assets.

Right now, Bank of America has more than 54 trillion dollars in exposure to derivatives but it only has 2.2 trillion dollars in assets.

Right now, Morgan Stanley has more than 44 trillion dollars in exposure to derivatives but it has less than a trillion dollars in assets.

Most people have absolutely no idea how incredibly vulnerable our financial system really is.

The truth is that these “too big to fail” banks could collapse at any time.

And when they fail, our economy will fail too.

So let us hope and pray that this brief period of false stability lasts for as long as possible.

Because when it ends, all hell is going to break loose.

Monetary Heroin Cold Turkey

Off the keyboard of Michael Snyder

Follow us on Facebook
Follow us on Twitter @Doomstead666

Published on Economic Collapse on October 29, 2014

helicopterben

Discuss this article at the Economics Table inside the Diner

From This Day Forward, We Will Watch How The Stock Market Performs Without The Fed’s Monetary Heroin

Money - Public DomainMark this day on your calendars.  The Dow is at 16974, the S&P 500 is at 1982 and the NASDAQ is at 4549.  From this day forward, we will be looking to see how the stock market performs without the monetary heroin that the Federal Reserve has been providing to it.  Since November 2008, the Fed has created about 3.5 trillion dollars and pumped it into the financial system.  An excellent chart illustrating this in graphic format can be found right here.  Pretty much everyone agrees that this has been a tremendous boon for the financial markets.  As you will see below, even former Fed chairman Alan Greenspan says that quantitative easing was “a terrific success” as far as boosting stock prices.  But he also says that QE has not been very helpful to the real economy at all.  In essence, the entire quantitative easing program was a massive 3.5 trillion dollar gift to Wall Street.  If that sounds unfair to you, that is because it is unfair.

So why is the Federal Reserve finally ending quantitative easing?

Well, officially the Fed says that it is because there has been so much improvement in the labor market

The Fed’s language, however, did suggest that they were getting more comfortable with the economy’s improvement. It cited “solid job gains,” citing a “substantial improvement in the outlook for the labor market,” as well as pointing out that “underutilization” of labor resources is “gradually diminishing.”

But that is not true at all.

The percentage of Americans that are working right now is about the same as it was during the depths of the last recession.  Just check out this chart…

Employment Population Ratio 2014

So there has been no “employment recovery” to speak of at all.

And as I wrote about yesterday, the percentage of Americans that are homeowners has been steadily falling throughout the quantitative easing era…

Homeownership Rate 2014

So let’s put the lie that quantitative easing helped the “real economy” to rest.  It did no such thing.

Instead, what QE did do was massively inflate stock prices.

The following is an excerpt from a Wall Street Journal report about a speech that former Fed chairman Alan Greenspan made to the Council on Foreign Relations on Wednesday

Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases.

He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.

Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.”

Moving forward, what did Greenspan tell the members of the Council on Foreign Relations that they should do with their money?

This might surprise you…

Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.

Wow.

It almost sounds like Greenspan has been reading the Economic Collapse Blog.

Since November 2008, every time there has been an interruption in the Fed’s quantitative easing program, the stock market has gone down substantially.

Will that happen again this time?

Well, the market is certainly primed for it.  We are repeating so many of the very same patterns that we saw just prior to the last two financial crashes.

For example, there have been three dramatic peaks in margin debt in the last twenty years.

One of those peaks came early in the year 2000 just before the dotcom bubble burst.

The second of those peaks came in the middle of 2007 just before the subprime mortgage meltdown happened.

And the third of those peaks happened earlier this year.

You can view  a chart that shows these peaks very clearly right here.

The Federal Reserve appears to be confident that the stock market will be okay without the monetary heroin that it has been supplying.

We shall see.

But it should be deeply troubling to all Americans that this unelected, unaccountable body of central bankers has far more power over our economy than anyone else does.  During election season, our politicians get up and give speeches about what they will “do for the economy”, but the truth is that they are essentially powerless compared to the immense power that the Federal Reserve wields.  Just a few choice words from Janet Yellen can cause the financial markets to rise or fall dramatically.  The same cannot be said of any U.S. Senator.

We are told that monetary policy is “too important” to be exposed to politics.

We are told that the independence of the Federal Reserve is “sacred” and must never be interfered with.

I say that is a bunch of nonsense.

No organization should have the power to print up trillions of dollars out of thin air and give it to their friends.

The Federal Reserve is completely and totally out of control, and Congress needs to start exerting power over it.

The first step is to get in there and do a comprehensive audit of the Fed’s books.  This is something that U.S. Senator Ted Cruz called for in a recent editorial for USA Today

Americans are seeing near-zero interest rates on their savings accounts while median incomes are falling, and millions of people are facing higher gas prices, food prices, electricity prices, health insurance prices. Enough is enough, the Federal Reserve needs to open its books — Americans deserve a sound and stable dollar.

Whether you agree with Ted Cruz on other issues or not, this is one issue that all Americans should be able to agree on.

If you study any of our major economic problems, usually you will find that the Federal Reserve is at the heart of that problem.

So if we ever hope to solve the issues that are plaguing our economy, the Fed is going to need to be dealt with.

Hopefully the American people will start to send more representatives to Washington D.C. that understand this.

Ebola Double Feature

Off the keyboard of Michael Snyder

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Economic Collapse on 10/15/2014 & 10/17/2014

plague

Discuss these articles at the Medicine & Health Table inside the Diner

 

If A Few Ebola Cases Can Make The Stock Market Crash This Much, What Would A Full-Blown Pandemic Mean?

Stock Market Crash Ebola - Public DomainIs Ebola going to cause another of the massive October stock market crashes that Wall Street is famous for?  At one point on Wednesday, the Dow was down a staggering 460 points.  It ultimately closed down just 173 points, but this was the fifth day in a row that the Dow has declined.  And of course Ebola is one of the primary things that is being blamed for this stunning stock market drop.  Since September 19th, we have seen the S&P 500 fall about 7 percent and the Nasdaq fall nearly 10 percent.  The VIX (the most important measure of volatility on Wall Street) shot up an astounding 22 percent on Wednesday.  So many of the ominous signs for the markets that I wrote about on Tuesday are now even worse.  If a handful of Ebola cases in the United States can cause this much panic in the financial world, what would a full-blown pandemic look like?

Of course Ebola is not the only reason why stocks are declining.  Just look at what is happening over in Europe.  The European Stoxx 600 index is already down a whopping 11.4 percent from the high that it hit just 18 days ago.  That is officially considered to be “correction” territory.

And Greece experienced a full-blown stock market collapse on Wednesday

As if the world didn’t have enough to be worried about (ISIS, Ebola, slowing China, Ukraine, slowing Germany, Fed tightening, etc.) now look what’s back: Greece. And in a big way.

The stock market is down over 9% on Wednesday, which is about as big as crashes come.

And the banks are getting absolutely smashed.

In general, markets tend to fall faster than they rise.

When there is a sudden downturn, the price action can be violent.  And just like we saw back in 2008, financial stocks are leading the way.  Just check out what happened to some of the biggest banks in America before the final bell sounded…

Volume leader Bank of America, down 5%, Citigroup, off 5.5%, and JP Morgan, down 4.6%, were particularly hard hit.

And thanks to Ebola fears, airline stocks plummeted as well

Airline stocks were roiled by the prospects of curtailed travel due to the spreading Ebola virus. United Continental fell 4% and American Airlines was off 4.3%. Among tech stocks, Intel lost 3.3%. Apple fell 1.7% and Microsoft slipped 2.3%.

An increasing number of voices are concerned that we could be on the verge of a repeat of what happened back in 2008.

For example, Professor Steve Keen, the head of Economics, History & Politics at Kingston University in London, wrote the following in a piece for CNN entitled “Brace yourself for another financial crash“…

My acceleration indicator has been flagging that the stock market was due for a fall since mid-2013.

It’s a tribute to the power of the Fed’s Quantitative Easing that the market continued to defy the gravity of decelerating debt for so long. QE was really a program to inflate asset prices since, as my colleague Michael Hudson puts it, “the Fed’s helicopter money fell on Wall Street, not Main Street”.

But with QE being unwound, the stock market is now back under the control of the not so tender mercies of excessive private debt.

So welcome to the New Crisis — same as the Old Crisis. The roller coaster ride is likely to continue.

Others are even more pessimistic.  For example, just check out what Daniel Ameduri of Future Money Trends recently told his readers

“If it drops below 15,000 points I would suggest people start buying food and ammo, because this depression is about to turn nasty.”

However, keep in mind that not that much has really changed from a month or two ago.

Yes, we now have had three confirmed cases of Ebola in the United States, but this could be just the beginning.

At first, the fear of Ebola will be worse than the disease.

But if a worst-case scenario does develop in the United States where hundreds of thousands of people are getting the virus, the fear such a pandemic will create will be off the charts.

In the midst of a full-blown Ebola pandemic, we wouldn’t just be talking about a 10 percent, 20 percent or 30 percent stock market decline.

Rather, we would be talking about the greatest stock market collapse in the history of stock market collapses.  In essence, there would not be much of a market at all at that point.

And if Ebola does start spreading wildly in this country, we would have a credit crunch that would make 2008 look like a Sunday picnic.

During times of extraordinary fear, financial institutions do not want to lend money to each other or to consumers.  But our economy is entirely based on debt.  If credit were to stop flowing, we would essentially not have an economy.

That is why we need to pray that this Ebola crisis stops here.  But thanks to the incompetence of Barack Obama and the CDC, there has been a series of very grave errors in trying to contain this disease.  This display of incompetence would be absolutely hilarious if we weren’t talking about a disease that could potentially kill millions of us.

Let us hope for the best, but let us also prepare for the worst.  That means stocking up on the food and supplies that you will need to stay isolated for an extended period of time.  As we have seen so many times in the past, basic essentials fly off of store shelves during any type of an emergency.  During an extended Ebola pandemic, those essentials would be in very short supply and prices on the basics would absolutely skyrocket.  Those that have taken the time to get prepared now will be way ahead of the game.

And if there were dozens or hundreds of people in your community that were contagious, you would definitely not want to go to a grocery store or anywhere else where large numbers of people circulate.

The key during any major pandemic is to keep yourself and your family isolated from the virus.  This is basic common sense, but it is something that Barack Obama does not seem to understand.  As I write this, he still has not done anything to restrict air travel between the United States and West Africa.  Hopefully this very foolish decision will not result in scores of dead Americans.

 

Ebola Travel Ban Now!

Ebola Travel Ban - Public DomainIs Barack Obama completely insane?  By not instituting an immediate ban on all non-essential travel between the United States and West Africa, he is putting the lives of more than 300 million Americans at risk.  Anyone with a shred of common sense knows that you keep more people from getting sick by keeping the sick people away from the healthy people.  Because the Ebola outbreaks in Liberia, Guinea and Sierra Leone are raging out of control, it is extremely difficult to tell who is carrying Ebola and who is not carrying Ebola.  Therefore we need to keep everyone from those countries away until those outbreaks subside.  If Barack Obama had established an Ebola travel ban a month or two ago like he should have done, Thomas Eric Duncan would never have entered the United States, and we would not have two Texas nurses infected with the virus.  But because Barack Obama did not do his job, now we have a new Ebola scare popping up somewhere in the country almost hourly.  If this outbreak eventually evolves into a full-blown pandemic, we will know who to blame.

Will an Ebola travel ban work?

It has worked in Africa.  Even as the outbreaks in Liberia, Guinea and Sierra Leone have spread like wildfire, the nations immediately bordering them are doing just fine.  And there is one primary reason why this is the case…

Ivory Coast, Guinea-Bissau and Senegal, all of which share borders with at least one of the three most affected countries, have closed those borders.

At this point, nearly 30 countries have instituted an Ebola travel ban.

So why won’t Obama do it?

This is clearly what the American people want.  For example, one recent survey asked the following question…

Should the government allow people who have recently been in any of the countries in western Africa where there is a major Ebola outbreak to enter the United States?

Only 23 percent of respondents said yes to that question.

We aren’t talking about the flu or the measles or some other disease that we are accustomed to dealing with.

We are talking about a brutally efficient killer that could kill millions of us if it were to spread widely inside the United States.

Sadly, at this point Barack Obama and the CDC are dead set against a travel ban, and there are “experts” popping up all over the mainstream media explaining to us why an Ebola travel ban would be a bad idea.

They say that a travel ban would provide a “false sense of security”.

Of course they never mention that travel bans are working quite well in Africa.

They say that a travel ban would make the Ebola outbreaks worse by keeping people from going over there to help.

But very few people are suggesting that essential medical personnel should be banned from traveling.  So that argument makes no sense whatsoever.

They say that travelers would just find another way into this country, and that it is better for us to be able to screen them when they come through the airports.

What are they going to do?  Swim over here from West Africa?

If we ban all sea and air travel from those nations, the only way that they would be able to come in would be through the Canadian or Mexican borders.  And if Obama had secured those borders like he should have done by now, we wouldn’t have a problem.

Some “experts” are even suggesting that a travel ban would be “racist”.

Really?

What about all of the other African nations that have instituted Ebola travel bans?

Are they “racist” too?

Right now, the dead bodies of Ebola victims are decaying in the streets over in West Africa.  Ebola corpses are being dumped into rivers and are being eaten by animals.  Grave diggers can’t keep up with the number of bodies being delivered to them.  The Liberian government estimates that it will soon need more than 84,000 additional body bags as the death toll climbs at an exponential rate.

We don’t want that coming here.

But thanks to Obama, most Americans now believe that we will see a major Ebola outbreak in the United States during the coming year…

According to a Wednesday poll by the Harvard School of Public Health, 52 percent of Americans surveyed said they believe the country will experience a large outbreak in the coming year, while 38 percent said they believed they or a family member would be infected.

In a previous article, I blamed the current state of affairs on Obama’s incompetence.

But to be honest, I was giving him the benefit of the doubt.

The truth is that Obama being incompetent is the best case scenario.

There is also a possibility that Donald Trump has raised.  We could actually be looking at a situation where there is something wrong with his mental health

Thursday on NewsMax TV’s “The Steve Malzberg Show,” real estate mogul Donald Trump called into question President Barack Obama mental health for refusing enact a travel ban on commercial flights from West African nations suffering with the Ebola outbreak.

When Malzberg asked if Trump, who had tweeted that the president was “psycho” for not stopping the flights, stands by questioning Obama’s mental health, Trump doubled down saying, “There is something wrong, and nobody knows what it is, but there is something wrong. There are so many bad decision. Can anybody be that incompetent? There is something wrong.”

Others have suggested that Obama may even be doing this on purpose.

Whatever his motivation is, the truth is that he is endangering all of us and our families.

Meanwhile, the CDC also richly deserves all of the criticism that it is currently getting.

This is an agency that is absolutely showered with money.  It gets more than $6,000,000,000 a year, and it is supposed to be preparing our health care system for events such as this.

And without a doubt, the money is in their budget

This lack of response is despite having these line items in its budget (2012 numbers):

  • Quarantine (non-add) $25,866,000
  • Healthcare-Associated Infections – PPHF (non-add) $11,750,000
  • Workplace Wellness – PPHF $10,000,000
  • Surveillance, Epidemiology, and PH Informatics $262,129,000
  • Personal Protective Technology $16,791,000
  • State and Local Preparedness and Response Capability $657,418,000
  • Public Health and Social Services Emergency Fund Transfer (non-add) $30,000,000

How much of these funds were used to monitor, consult, advice the nurses in Dallas who were treating a man with deadly Ebola? $0.00

“Incompetent” is far too kind a word to describe the performance of the CDC so far.

But of course this is just par for the course for federal agencies these days.  This has become so glaringly obvious that even CNBC is talking about it…

The CDC is just the latest in a line of federal agencies viewed as bumbling and incompetent. First it was the botched rollout of Obamacare by the Department of Health and Human Services and the IRS seemingly targeting conservative groups for extra scrutiny. More recently, the Secret Service came under heavy criticism for allowing a knife-wielding intruder to burst in and run wild inside the White House, among other appalling lapses.

The CDC now is under heavy scrutiny for not moving more swiftly to ensure that Ebola patient Thomas Eric Duncan did not spread the disease to American nurses and for apparently unclear direction to one of those nurses, Amber Joy Vinson, about whether she could fly after treating Duncan.

As political pressure has mounted, Obama has finally made a “big move” to get a grip on this crisis.

He has appointed an “Ebola czar” to oversee the federal response to Ebola.

His name is Ron Klain, and he is a Democratic political hack best known for his work during the “hanging chads” episode of the 2000 presidential election.

The White House says that they were not looking for an expert on Ebola.

Mission accomplished.

The “Ebola czar” heading up the response to what could be the greatest health crisis in U.S. history does not know anything about the virus.

Let us hope that this Ebola outbreak fizzles out somehow and that by some miracle no more Ebola victims travel to the United States.

Because it has become exceedingly clear that our government is not equipped to deal with something like this.

Matt Drudge recently sent out a tweet warning that we need to be ready to “self-quarantine” if necessary.

I think that is very good advice.  Obviously the government is not going to be able to protect us if Ebola starts spreading like wildfire.

The only people that you are going to be able to depend on are yourself, your family and your close friends.

I encourage all of you to get prepared while we still have time.

Germany & Japan Hit the Skids

Off the keyboard of Michael Snyder

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Economic Collapse on October 8, 2014

Pigs on the Wing in Japan & Germany

Pigs on the Wing in Japan & Germany

Discuss this article at the Economics Table inside the Diner

Serious Financial Trouble Is Erupting In Germany And Japan

Stock Market Collapse - Public DomainThere are some who believe that the next great financial crash will not begin in the United States.  Instead, they are convinced that a financial crisis that begins in Europe or in Japan (or both) will end up spreading across the globe and take down the U.S. too.  Time will tell if they are ultimately correct, but even now there are signs that financial trouble is already starting to erupt in both Germany and Japan.  German stocks have declined 10 percent since July, and that puts them in “correction” territory.  In Japan, the economy is a total mess right now.  According to figures that were just released, Japanese GDP contracted at a 7.1 percent annualized rate during the second quarter and private consumption contracted at a 19 percent annualized rate.  Could a financial collapse in either of those nations be the catalyst that sets off financial dominoes all over the planet?

This week, the worst German industrial production figure since 2009 rattled global financial markets.  Germany is supposed to be the economic “rock” of Europe, but at this point that “rock” is starting to show cracks.

And certainly the civil war in Ukraine and the growing Ebola crisis are not helping things either.  German investors are becoming increasingly jittery, and as I mentioned above the German stock market has already declined 10 percent since July

German stocks, weighed down by the economic fallout spawned by the Ukraine-Russia crisis and the eurzone’s weak economy, are now down more than 10% from their July peak and officially in correction territory.

The DAX, Germany’s benchmark stock index, has succumbed to recent data points that show the German economy has ground to a halt, hurt in large part by the economic sanctions levied at its major trading partner, Russia, by the U.S. and European Union as a way to get Moscow to butt out of Ukraine’s affairs. The economic slowdown in the rest of the debt-hobbled eurozone has also hurt the German economy, considered the economic locomotive of Europe.

In trading today, the DAX fell as low as 8960.43, which put it down 10.7% from its July 3 closing high of 10,029.43 and off nearly 11% from its June 20 intraday peak of 10,050.98.

And when you look at some of the biggest corporate names in Germany, things look even more dramatic.

Just check out some of these numbers

The hardest hit sectors have been retailers, industrials and leisure stocks with sports clothing giant Adidas down 37.7pc for the year, airline Lufthansa down 27pc, car group Volkswagen sliding 23.6pc and Deutchse Bank falling 20.2pc so far this year.

Meanwhile, things in Japan appear to be going from bad to worse.

The government of Japan is more than a quadrillion yen in debt, and it has been furiously printing money and debasing the yen in a desperate attempt to get the Japanese economy going again.

Unfortunately for them, it is simply not working.  The revised economic numbers for the second quarter were absolutely disastrous.  The following comes from a Japanese news source

On an annualized basis, the GDP contraction was 7.1 percent, compared with 6.8 percent in the preliminary estimate. That makes it the worst performance since early 2009, at the height of the global financial crisis.

The blow from the first stage of the sales tax hike in April extended into this quarter, with retail sales and household spending falling in July. The administration signaled last week that it is prepared to boost stimulus to help weather a second stage of the levy scheduled for October 2015.

Corporate capital investment dropped 5.1 percent from the previous quarter, more than double the initial estimate of 2.5 percent.

Private consumption was meanwhile revised to a 5.1 percent drop from the initial reading of 5 percent, meaning it sank 19 percent on an annualized basis from the previous quarter, rather than the initial estimate of 18.7 percent, Monday’s report said.

For the moment, things are looking pretty good in the United States.

But as I have written about so many times, our financial markets are perfectly primed for a fall.

Other experts see things the same way.  Just consider what John Hussman wrote recently…

As I did in 2000 and 2007, I feel obligated to state an expectation that only seems like a bizarre assertion because the financial memory is just as short as the popular understanding of valuation is superficial: I view the stock market as likely to lose more than half of its value from its recent high to its ultimate low in this market cycle.

At present, however, market conditions couple valuations that are more than double pre-bubble norms (on historically reliable measures) with clear deterioration in market internals and our measures of trend uniformity. None of these factors provide support for the market here. In my view, speculators are dancing without a floor.

And it isn’t just stocks that could potentially be on the verge of a massive decline.  The bond market is also experiencing an unprecedented bubble right now.  And when that bubble bursts, the carnage will be unbelievable.  This has become so obvious that even CNBC is talking about it…

Picture this: The bond market gets spooked by a sudden interest rate scare, sending a throng of buyers streaming toward the exits, only to find a dearth of buyers on the other side.

As a result, liquidity evaporates, yields soar, and the U.S. finds itself smack in the middle of another debt crisis no one saw coming.

It’s a scenario that TABB Group fixed income head Anthony J. Perrotta believes is not all that far-fetched, considering the market had what could be considered a sneak preview in May 2013. That was the “taper tantrum,” which saw yields spike and stocks sell off after then-Federal Reserve Chairman Ben Bernanke made remarks that the market construed as indicating rates would rise sooner than expected.

If the strength of our financial markets reflected overall strength in the U.S. economy there would not be nearly as much cause for concern.

But at this point our financial markets have become completely and totally divorced from economic reality.

The truth is that our economic fundamentals continue to decay.  In fact, the IMF says that China now has the largest economy on the planet on a purchasing power basis.  The era of American economic dominance is ending.  It is just that the financial markets have not gotten the memo yet.

Hopefully we still have at least a few more months before stock markets all over the world start crashing.  But remember, we are entering the seventh year of the seven year cycle of economic crashes that so many people are talking about these days.  And we are definitely primed for a global financial collapse.

Sadly, most people did not see the crash of 2008 coming, and most people will not see the next one coming either.

Your Recovery Without Drugs

Off the keyboard of Jim Quinn

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Burning Platform on August 18, 2014

brain-drugs

Discuss this article at the Economics Table inside the Diner

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

Thomas Jefferson

Does this chart portray an economic recovery in any way? Wages have been stagnant since the START of the supposed recovery in 2010. Real median household income, even using the highly understated CPI, is on a glide path to oblivion. You just need to observe with your own two eyes the number of Space Available signs in front of office buildings, strip centers and malls across America to realize we have further to fall. Low paying, part-time burger flipping jobs aren’t going to revive this debt saturated economic system. But at least the .1% are enjoying their Federal Reserve created high. Fiat is a powerful drug when administered in large doses to addicts on Wall Street.

The S&P 500 has risen from 666 in March of 2009 to 1,972 today. That is a 196% increase in a little over five years. During this same time, real household income has fallen by 7%. There have been a few million jobs added, while 11 million people have left the labor market. According to Robert Shiller’s CAPE ratio, the stock market valuation has only been higher, three times in history – 1929, 1999, and 2007. He seems flabbergasted by why valuations are so high. Sometimes really smart people can act really dumb.

The Federal Reserve balance sheet was $900 billion before the 2008 financial crisis. Today it stands at $4.4 trillion. The Fed has increased their balance sheet by 220% since the March 2009 market lows. Do you think there is any correlation between the Fed puppets printing $2.4 trillion and handing it to their Wall Street puppeteers, who used their high frequency trading supercomputers and ability to rig the markets so they never lose, and the third stock bubble in the last 13 years? It’s so self evident that only an Ivy League economist or CNBC anchor wouldn’t be able to see it.

sp500fedbal

 

Let’s look at the amazing stock market recovery without Federal Reserve heroine pumped into the veins of Wall Street banker addicts. If you divide the S&P 500 Index by the size of the Federal reserve balance sheet, you see the true purpose of QE1, QE2, and QE3. It wasn’t to save Main Street. It was to save Wall Street. Without the Federal Reserve funneling fiat to the .1% banking cabal and creating inflation in energy, food, and other basic necessities for the 99.9%, there is no stock market recovery. The recovery has occurred in Manhattan and the Hamptons. It’s been non-existent for the vast majority of people in this country. The wealth effect and trickle down theory have been disproved in spades. The only thing trickling down on the former middle class from the Fed is warm and yellow.

sp500fedbalratio

The entire stock market advance has been created on record low trading volumes and record high levels of monetary manipulation. Even though the Federal Reserve has driven senior citizens further into poverty with 0% interest rates, those with common sense have refused to be lured back into the lion’s den. They have parked record levels of fiat in no interest bank and money market accounts. They are tired of being muppets led to slaughter.

Quantitative easing was supposed to force little old ladies into the stock market and consumers to spend their debased dollars before they lost more value. The spending would revive the dormant economy just as the Keynesian text books promised. It didn’t happen. The peasants haven’t cooperated. Quantitative easing and ZIRP sapped the life from the middle class as their wages have stagnated and their living expenses have skyrocketed. Mission Accomplished by the Fed. Of course, the CNBC bimbos and shills would declare this $10.8 trillion to be money on the sidelines ready to boost the stock market ever higher. I love that storyline. It never grows old.

The MSM, government and Wall Street continue to flog the story about a housing recovery. It’s been nothing but a confidence game based upon the Fed’s easy money and the Wall Street scheme to buy up foreclosed properties with the Fed’s money. The scheme was to artificially boost home prices by restricting home supply through foreclosure manipulation, in order to allow the insolvent Wall Street banks to get out from under their billions in toxic mortgage loans.

Shockingly, the Case Shiller home price index has soared by 25% since 2012 despite first time home buyers being virtually non-existent and mortgage applications plunging to 14 year lows. How could that be? Don’t people need mortgages to buy houses? Isn’t real demand necessary to drive prices higher? Not when Uncle Ben and Madam Yellen are in charge of the printing press. Housing bubble 2.0 has arrived. I wonder if the Federal Reserve balance sheet increase of 50% since 2012 has anything to do with the new housing bubble.

It seems a similar result is obtained when dividing the Case Shiller Index by the size of the Fed’s balance sheet. The real housing market for real people is worse than it was in 2009. The national home price increase has been centered in the usual speculative markets, aided and abetted by the Fed’s easy money, managed by the Wall Street hedge funds, and exacerbated by the late arriving flippers who will be left holding the bag again. The Fed/ Wall Street scheme has priced young people out of the market and has failed to ignite the desired Keynesian impact. Investors/flippers account for 34% of all home sales. Foreigners with no knowledge of value metrics account for 30% of all home sales. The lesson of history is that most people don’t learn the lessons of history. The 2nd housing bubble in seven years is seeking a pin.

If ever you needed proof of the confidence game in its full glory, the chart below from Zero Hedge says it all. Mortgage rates have been falling for the past year, home builders have been reporting soaring confidence about the future, and the National Association of Realtors keeps predicting a surge in home buying any minute now. One small problem. Mortgage applications are in free fall, new home sales are at 1991 levels, and existing home sales are falling. Home prices have peaked and are beginning to roll over. The Wall Street hedgies are all looking to exit stage left. Young people are saddled with over a trillion of government issued student loan debt and millions of older subprime borrowers have been lured into more auto loan debt. Home sales will be stagnant for the next decade.

 

Quantitative easing will cease come October, unless Yellen and Wall Street can create a new “crisis” to cure with more money printing. By every valuation measure used over the last 100 years, stocks are overvalued by at least 50%. By historical measures, home prices are overvalued by at least 30%. Ten year Treasuries are yielding 2.4%, while true inflation is north of 5%. With real interest rates deep in negative territory, the bond market is even more overvalued than stocks or houses. These simultaneous bubbles have been created by the Federal Reserve in a desperate attempt to keep this debt laden ship afloat. Their solution to a ship listing from too much debt was to load it down with trillions more in debt. The ship is taking on water rapidly.

We had a choice. We could have bitten the bullet in 2008 and accepted the consequences of decades of decadence, frivolity, materialism, delusion and debt accumulation. A steep sharp depression which would have purged the system of debt and punishment of those who created the disaster would have ensued. The masses would have suffered, but the rich and powerful bankers would have suffered the most. Today, the economy would be revived, saving and investing would be generating needed capital for expansion, and banks would be doing what they are supposed to do – lending money to businesses and individuals. Instead, the Wall Street bankers won the battle and continue to pillage and loot the national wealth while impoverishing the masses.

The arrogance, hubris and contempt for morality displayed by the ruling class is breathtaking to behold. They think they are untouchable and impervious to norms followed by the rest of society. They may have won the opening battle, but will lose the war. Discontent among the masses grows by the day. The critical thinking citizens are growing restless and angry. They are beginning to grasp the true enemy. The system has been captured by a few malevolent men. When the stock, bond and housing bubbles all implode simultaneously, all hell will break loose in this country. It will make Ferguson, Missouri look like a walk in the park. I wonder if the occupants of the Eccles building in Washington DC will get out alive.

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.”Henry Ford

Charts provided by Confounded Interest

La La Land

Off the microphone of RE

Follow us on Twitter @doomstead666
Friend us on Facebook

Aired on the Doomstead Diner on August 5, 2014

logopodcast

Discuss this Rant at the Podcast Table inside the Diner

A Potpourri review of Global Catastrophes including Ebola Virus, NATO-Russia Financial Warfare, Argentinian Default and California Drought

https://lh4.ggpht.com/eTTeRJFNvM2jEs2LLK5726WmQmtaU5_7InMJYvJLs3xew5MvJuwWcxeNj4pkG6N6lnw=h900 http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140801_drought.jpg

https://socioecohistory.files.wordpress.com/2014/04/russia_wants_war_look_how_closely_they_put_country_to_our_military_bases.jpg http://legalinsurrection.com/wp-content/uploads/2014/07/Kirchner.jpg

Snippet:

…Well, we didn’t have to wait too long to see some of the Financial Repercussions and Blowback from the multitude of Finance Problems now ongoing across a few theaters. The markets got hit hard going into the close of last week.

As mentioned in the last rant, there was the further sanctions and fines levied on Vlad the Impaler, to the tune of $51B. Then the Argentinian Default, valued out at somewhere around $25B in Funny Money. Then the Espirito Santo Bankruptcy and Italian Goobermint confiscation of Nomura assets, and to top it all off POTUS Telepromptus Obama-sama got sued by CONgress.

Following this, we get Newz that the Ebola Virus is spreading faster than it can be contained, according to the head of the WHO and the Drought in California is so catastrophically bad that BEER production is threatened. I can’t think of any more powerful indicator that COLLAPSE has ARRIVED here in the FSoA!…

http://treasure.diylol.com/uploads/post/image/471289/resized_the-most-interesting-man-in-the-world-meme-generator-i-have-only-one-fear-running-out-of-beer-64301a.jpg

For the rest, LISTEN TO THE RANT!!!

Also, don’t miss the highest ranked Rant to date, ANTI-DOLLAR!

——————-

Up on the Diner today as Feature also, a Photo Blog from Ecological Design and Permaculture Expert Lucid Dreams, from SUN Headquarters in South Carolina

EVIDENCE OF THE BAMBOO MONSTER

http://sun4living.com/wp-content/uploads/2014/08/IMG_9111.jpg

http://sun4living.com/wp-content/uploads/2014/08/IMG_9026.jpg

This will give you a welcome respite from the Doom & Gloom, as we continue to build our SUN Project for Sustaining Universal Needs on the Doomstead Diner & on SUN.

RE

Dense Fog Turns into Toxic Smog

Off the keyboard of Jim Quinn

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Burning Platform on December 31, 2013

Discuss this article at the Kitchen Sink inside the Diner

 

In mid-January of this year I wrote my annual prediction article for 2013 – Apparitions in the Fog. It is again time to assess my inability to predict the future any better than a dart throwing monkey. As usual, sticking to facts was a mistake in a world fueled by misinformation, propaganda, delusion and wishful thinking. I was far too pessimistic about the near term implications of debt, civic decay and global disorder. Those in power have successfully held off the unavoidable collapse which will be brought about by their ravenous unbridled greed, and blatant disregard for the rule of law, the U.S. Constitution and rights and liberties of the American people. The day to day minutia, pointless drivel of our techno-narcissistic selfie showbiz society, and artificially created issues (gay marriage, Zimmerman-Martin, Baby North West, Duck Dynasty) designed to distract the public from thinking, are worthless trivialities in the broad landscape of human history.

The course of human history is determined by recurring cyclical themes based upon human frailties that have been perpetual through centuries of antiquity. The immense day to day noise of an inter-connected techno-world awash in inconsequentialities and manipulated by men of evil intent is designed to divert the attention of the masses from the criminal activities of those in power. It has always been so. There have always been arrogant, ambitious, greedy, power hungry, deceitful men, willing to take advantage of a fearful, lazy, ignorant, selfish, easily manipulated populace. The rhythms of history are unaffected by predictions of “experts” who are paid to spin yarns in order to sustain the status quo. There is no avoiding the consequences of actions taken and not taken over the last eighty years. We are in the midst of a twenty year period of Crisis that was launched in September 2008 with the worldwide financial collapse, created by the Federal Reserve, their Wall Street owners, their bought off Washington politicians, and their media and academic propaganda machines.

I still stand by the final paragraph of my 2013 missive, and despite the fact the establishment has been able to fend off the final collapse of their man made credit boom for longer than I anticipated, they have only insured a far worse outcome when the bubble bursts:

“So now I’m on the record for 2013 and I can be scorned and ridiculed for being such a pessimist when December rolls around and our Ponzi scheme economy hasn’t collapsed. There is no disputing the facts. The economic situation is deteriorating for the average American, the mood of the country is darkening, and the world is awash in debt and turmoil. Every country is attempting to print their way to renewed prosperity. No one wins a race to the bottom. The oligarchs have chosen a path of currency debasement, propping up insolvent banks, propaganda and impoverishing the masses as their preferred course. They attempt to keep the masses distracted with political theater, gun control vitriol, reality TV and iGadgets. What can be said about a society where 10% of the population follows Justin Bieber and Lady Gaga on Twitter and where 50% think the National Debt is a monument in Washington D.C. The country is controlled by evil sycophants, intellectually dishonest toadies and blood sucking leeches. Their lies and deception have held sway for the last four years, but they have only delayed the final collapse of a boom brought about by credit expansion. They will not reverse course and believe their intellectual superiority will allow them to retain their control after the collapse.”

The core elements of this Crisis have been visible since Strauss & Howe wrote The Fourth Turning in 1997. All the major events that transpire during this Crisis will be driven by one or more of these core elements – Debt, Civic Decay, and Global Disorder.

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe

My 2013 predictions were framed by these core elements. After re-reading my article for the first time in eleven months I’ve concluded it is lucky I don’t charge for investment predictions. Many of my prognostications were in the ballpark, but I have continually underestimated the ability of central bankers and their Wall Street co-conspirators to use the $2.8 billion per day of QE to artificially elevate the stock market to bubble level proportions once again. If I wasn’t such a trusting soul, I might conclude the .1% financial elite, who run this country, created QEternity to benefit themselves, their .1% corporate CEO accomplices and the corrupt government apparatchiks who shield their flagrant criminality from the righteous hand of justice.

Even a highly educated Ivy League economist might grasp the fact that Ben Bernanke’s QEternity and ZIRP, sold to the unsuspecting masses as desperate measures during a crisis that could have brought the system down, have been kept in place for five years as a means to drive stock prices and home prices higher. The emergency was over by 2010, according to government reported data. The current monetary policy of the Federal Reserve would have been viewed as outrageous, reckless, and incomprehensible in 2007. It is truly a credit to the ruling elite and their media propaganda arm that they have been able to convince a majority of Americans their brazen felonious disregard for the wellbeing of the 99% is necessary to sustain the .1% way of life. Those palaces in the Hamptons aren’t going to pay for themselves without those $100 billion of annual bonuses.

Do you think the 170% increase in the S&P 500 has been accidently correlated with the quadrupling of the Federal Reserve balance sheet or has Bernanke just done the bidding of his puppet masters? Considering the .1% billionaire clique owns the vast majority of stock in this corporate fascist paradise, is it really a surprise the trickle down canard would be the solution of choice from these sociopathic scoundrels? Of course QE and ZIRP have impacted the 80% who own virtually no stocks in a slightly different manner. Do you think the 100% increase in gasoline prices since 2009 was caused by Bernanke’s QEternity?

Do you think the 8% decline in real median household income since 2008 was caused by Bernanke’s QE and ZIRP policies?

Click to View

Do you think the $10.8 trillion stolen from grandmothers and risk adverse savers was caused by Bernanke’s ZIRP?

Was the $860 billion increase in real GDP (5.8% over five years) worth the $8 trillion increase in the National Debt and $3 trillion increase in the Federal Reserve balance sheet? Was it moral, courageous and honorable of the Wall Street plantation owners to syphon the remaining wealth of the dying middle class peasants and leaving the millennial generation and future generations bound in chains of unfunded debt to the tune of $200 trillion?

My assessment regarding unpredictable events lurking in the fog was borne out by what happened that NO ONE predicted, including: the first resignation of a pope in six hundred years, the military coup of a democratically elected president of Egypt – supported by the democratically elected U.S. president, the rise of an alternative currency – bitcoin, the bankruptcy of one of the largest cities in the U.S. – Detroit, a minor terrorist attack in Boston that freaked out the entire country and revealed the Nazi-like un-Constitutional tactics that will be used by the police state as this Crisis deepens, and revelations by a brilliant young patriot named Edward Snowden proving that the U.S. has been turned into an Orwellian surveillance state as every electronic communication of every American is being monitored and recorded. The Democrats and Republicans played their parts in this theater of the absurd. They proved to be two faces of the same Party as neither faction questions the droning of innocent people around the globe, mass spying on citizens, Wall Street criminality, trillion dollar deficits, a rogue Federal Reserve, or out of control unsustainable government spending.

My predictions for 2013 were divided into the three categories driving this Fourth Turning CrisisDebt, Civic Decay, and Global Disorder. Let’s assess my inaccuracy.

Debt

  • The debt ceiling will be raised as the toothless Republican Party vows to cut spending next time. The political hacks will create a 3,000 page document of triggers and create a committee to study the issue, with actual measures that slow the growth of annual spending by .000005% starting in 2017.

The government shutdown reality TV show proved to be the usual Washington D.C. kabuki theater. They gave a shutdown and no one noticed. It had zero impact on the economy. More people came to the realization that government does nothing except spend our money and push us around. The debt ceiling was raised, the sequester faux “cuts” were reversed and $20 billion of spending will be cut sometime in the distant future. Washington snakes are entirely predictable. I nailed this prediction.

  • The National Debt will increase by $1.25 trillion and debt to GDP will reach 106% by the end of the fiscal year.

The National Debt increased by ONLY $964 billion in the last fiscal year, even though the government stopped counting in May. The temporary sequester cuts, the expiration of the 2% payroll tax cut, the fake Fannie & Freddie paybacks to the U.S. Treasury based upon mark to fantasy accounting, and the automatic expiration of stimulus spending combined to keep the real deficit from reaching $1 trillion for the fifth straight year. Debt to GDP was 104%, before our beloved government drones decided to “adjust” GDP upwards by $500 billion based upon a new and improved formula, like Tide detergent. I missed this prediction by a smidgeon.

  • The Federal Reserve balance sheet will reach $4 trillion by the end of the year.

The Federal Reserve balance sheet stands at $4.075 trillion today. Ben is very predictable, and of course “transparent”. This was an easy one.

  • Consumer debt will reach $2.9 trillion as the Feds accelerate student loans and Ally Financial, along with the other Too Big To Control Wall Street banks, keep pumping out subprime auto loans. By mid-year reported losses on student loans will soar and auto loan delinquencies will show an upturn. This will force a slowdown in consumer debt issuance, exacerbating the recession that started in 2012.

Consumer debt outstanding currently stands at $3.076 trillion despite the fact that credit card debt has been virtually flat. The Federal government has continued to dole out billions in loans to University of Phoenix wannabes and to the subprime urban entitlement armies who deserve to drive an Escalade despite having no job, no assets and a sub 650 credit score, through government owned Ally Financial. It helps drive business when you don’t care about being repaid. Student loan delinquency rates are at an all-time high, as there are no jobs for graduates with tens of thousands in debt. Auto loan delinquencies have begun to rise despite the fact we are supposedly in a strongly recovering economy. The slowdown in debt issuance has not happened, as the Federal government is in complete control of the non-revolving loan segment. My prediction has proven to be accurate.

  • The Bakken oil miracle will prove to be nothing more than Wall Street shysters selling a storyline. Daily output will stall at 750,000 barrels per day and the dreams of imminent energy independence will be annihilated by reality, again. The price of oil will average $105 per barrel, as global tensions restrict supply.

Bakken production has reached 867,000 barrels per day as more and more wells have been drilled to offset the steep depletion rates of the existing wells. The average price per barrel has been $104, despite the frantic propaganda campaign about imminent American energy independence. Tell that to the average Joe filling their tank and paying the highest December gas price in history. My prediction was too pessimistic, but the Bakken miracle will be revealed as an over-hyped Wall Street scam in 2014.

  • The home price increases generated through inventory manipulation in 2012 will peter out as 2013 progresses. The market has been flooded by investors. There is very little real demand for new homes. Young households with heavy student loan debt and low paying jobs will continue to rent, since the oligarchs refused to let prices fall to a level that would spur real demand. Mortgage delinquencies will rise as job growth remains stagnant, leading to an increase in foreclosures. Rent prices will flatten as apartment construction and investors flood the market with supply.

Existing home sales peaked in the middle of 2013 and have been in decline as mortgage rates have jumped from 3.25% to 4.5% since February. New home sales remain stagnant, near record low levels. The median sales price for existing home sales peaked at $214,000 in June and has fallen for five consecutive months by a total of 8%. First time home buyers account for a record low of 28% of purchases, while investors account for a record high level of purchasers. Mortgage delinquencies fell for most of the year, but the chickens are beginning to come home to roost as delinquent mortgage loans rose from 6.28% in October to 6.45% in November. Rent increases slowed to below 3% as Blackrock and the other Wall Street shysters flood the market with their foreclosure rental properties. My housing prediction was accurate.

 

  • The disconnect between the stock market and the housing and employment markets will be rectified when the MSM can no longer deny the recession that began in 2012 and will deepen in the first part of 2013. While housing prices languish 30% below their peak levels of 2006, the stock market has prematurely ejaculated back to pre-crisis levels. Declining corporate profits, stagnant consumer spending, and increasing debt defaults will finally result in a 20% decline in the stock market, with a chance for losses greater than 30% if Japan or the EU begin to crumble.

And now we get to the prediction that makes me happy I don’t charge people for investment advice. Facts don’t matter in world of QE for the psychopathic titans of Wall Street and misery for the indebted peasants of Main Street. The government data drones, Ivy League educated Wall Street economists, and the obedient corporate media propaganda apparatus declare that GDP has grown by 2% over the last four quarters and we are not in a recession. If you believe their bogus inflation calculation then just ignore the collapsing retail sales, stagnant real wages, and rising gap between the uber-rich and the rest of us. Using a true measure of inflation reveals an economy in recession since 2004. Whose version matches the reality on the ground?

 

Corporate profits have leveled off at record highs as mark to fantasy accounting fraud, condoned and encouraged by the Federal Reserve, along with loan loss reserve depletion and $5 billion of risk free profits from parking deposits at the Fed have created a one-time peak. The record level of negative earnings warnings is the proverbial bell ringing at the top.

negative earnings

I only missed my stock market prediction by 50%, as the 30% rise was somewhat better than my 20% decline prediction. Bernanke’s QEternity, Wall Street’s high frequency trading supercomputers, record levels of margin debt, a dash of delusion, and a helping of clueless dupes have taken the stock market to another bubble high. My prediction makes me look like an idiot today. I’m OK with that, since I know facts and reality always prevail in the long-run. As John Hussman sagely points out, today’s idiot will be tomorrow’s beacon of truth:

“The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak. There’s no calling the top, and most of the signals that have been most historically useful for that purpose have been blazing red since late-2011. My impression remains that the downside risks for the market have been deferred, not eliminated, and that they will be worse for the wait.”

  • Japan is still a bug in search of a windshield. With a debt to GDP ratio of 230%, a population dying off, energy dependence escalating, trade surplus decreasing, an already failed Prime Minister vowing to increase inflation, and rising tensions with China, Japan is a primary candidate to be the first domino to fall in the game of debt chicken. A 2% increase in interest rates would destroy the Japanese economic system.

Abenomics has done nothing for the average Japanese citizen, but it has done wonders for the ruling class who own all the stocks. Abe has implemented monetary policies that make Bernanke get a hard on. Japanese economic growth remains mired at 1.1%, wages remain stagnant, and their debt to GDP ratio remains above 230%, but at least he has driven their currency down 20% versus the USD and crushed the common person with 9% energy inflation. None of this matters, because the .1% have benefitted from a 56% increase in the Japanese stock market. My prediction was wrong. The windshield is further down the road, but it is approaching at 100 mph.

  • The EU has temporarily delayed the endgame for their failed experiment. Economic conditions in Greece, Spain and Italy worsen by the day with unemployment reaching dangerous revolutionary levels. Pretending countries will pay each other with newly created debt will not solve a debt crisis. They don’t have a liquidity problem. They have a solvency problem. The only people who have been saved by the actions taken so far are bankers and politicians. I believe the crisis will reignite, with interest rates spiking in Spain, Italy and France. The Germans will get fed up with the rest of Europe and the EU will begin to disintegrate.

This was another complete miss on my part. Economic conditions have not improved in Europe. Unemployment remains at record levels. EU GDP is barely above 0%. Debt levels continue to rise. Central bank bond buying has propped up this teetering edifice of ineptitude and interest rates in Spain, Italy and France have fallen to ridiculously low levels of 4%, considering they are completely insolvent with no possibility for escape. The disintegration of the EU will have to wait for another day.

Civic Decay

  • Progressive’s attempt to distract the masses from our worsening economic situation with their assault on the 2nd Amendment will fail. Congress will pass no new restrictions on gun ownership and 2013 will see the highest level of gun sales in history.

Obama and his gun grabbing sycophants attempted to use the Newtown massacre as the lever to overturn the 2nd Amendment. The liberal media went into full shriek mode, but the citizens again prevailed and no Federal legislation restricting the 2nd Amendment passed. Gun sales in 2013 will set an all-time record. With the Orwellian surveillance state growing by the day, arming yourself is the rational thing to do. I nailed this prediction.

  • The deepening recession, higher taxes on small businesses and middle class, along with Obamacare mandates will lead to rising unemployment and rising anger with the failed economic policies of the last four years. Protests and rallies will begin to burgeon.

The little people are experiencing a recession. The little people bore the brunt of the 2% payroll tax increase. The little people are bearing the burden of the Obamacare insurance premium increases. The number of employed Americans has increased by 1 million in the last year, a whole .4% of the working age population. The number of Americans who have willingly left the labor force in the last year because their lives are so fulfilled totaled 2.5 million, leaving the labor participation rate at a 35 year low. The anger among the former middle class is simmering below the surface, as Bernanke’s policies further impoverish the multitudes. Mass protests have not materialized but the Washington Navy yard shooting, dental hygenist murdered by DC police for ramming a White House barrier, and self- immolation of veteran John Constantino on the National Mall were all individual acts of desperation against the establishment.

  • The number of people on food stamps will reach 50 million and the number of people on SSDI will reach 11 million. Jamie Dimon, Lloyd Blankfein, and Jeff Immelt will compensate themselves to the tune of $100 million. CNBC will proclaim an economic recovery based on these facts.

The number of people on food stamps appears to have peaked just below 48 million, as the expiration of stimulus spending will probably keep the program from reaching 50 million. As of November there were 10.98 million people in the SSDI program. The top eight Wall Street banks have set aside a modest $91 billion for 2013 bonuses. The cost of providing food stamps for 48 million Americans totaled $76 billion. CNBC is thrilled with the record level of bonuses for the noble Wall Street capitalists, while scorning the lazy laid-off middle class workers whose jobs were shipped to China by the corporations whose profits are at all-time highs and stock price soars. Isn’t crony capitalism grand?

  • The drought will continue in 2013 resulting in higher food prices, ethanol prices, and shipping costs, as transporting goods on the Mississippi River will become further restricted. The misery index for the average American family will reach new highs.

The drought conditions in the U.S. Midwest have been relieved. Ethanol prices have been flat. Beef prices have risen by 10% since May due to the drought impact from 2012, but overall food price increases have been moderate. The misery index (unemployment rate + inflation rate) has supposedly fallen, based on government manipulated data. I whiffed on this prediction.

  • There will be assassination attempts on political and business leaders as retribution for their actions during and after the financial crisis.

There have been no assassination attempts on those responsible for our downward financial spiral. The anger has been turned inward as suicides have increased by 30% due to the unbearable economic circumstances brought on by the illegal financial machinations of the Wall Street criminal banks. Obama and Dick Cheney must be thrilled that more military personnel died by suicide in 2013 than on the battlefield. Mission Accomplished. The retribution dealt to bankers and politicians will come after the next collapse. For now, my prediction was premature.

  • The revelation of more fraud in the financial sector will result in an outcry from the public for justice. Prosecutions will be pursued by State’s attorney generals, as Holder has been captured by Wall Street.

Holder and the U.S. government remain fully captured by Wall Street. The states have proven to be toothless in their efforts to enforce the law against Wall Street. The continuing revelations of Wall Street fraud and billions in fines paid by JP Morgan and the other Too Big To Trust banks have been glossed over by the captured mainstream media. As long as EBT cards, Visas and Mastercards continue to function, there will be no outrage from the techno-narcissistic, debt addicted, math challenged, wilfully ignorant masses. Another wishful thinking wrong prediction on my part.

  • The deepening pension crisis in the states will lead to more state worker layoffs and more confrontation between governors attempting to balance budgets and government worker unions. There will be more municipal bankruptcies.

Using a still optimistic discount rate of 5%, the unfunded pension liability of states and municipalities totals $3 trillion. The taxpayers don’t have enough cheese left for the government rats to steal. The crisis deepens by the second. State and municipal budgets require larger pension payments every year. The tax base is stagnant or declining. States must balance their budgets. They will continue to cut existing workers to pay the legacy costs until they all experience their Detroit moment. With the Detroit bankruptcy, I’ll take credit for getting this prediction right.

  • The gun issue will further enflame talk of state secession. The red state/blue state divide will grow ever wider. The MSM will aggravate the divisions with vitriolic propaganda.

With the revelations of Federal government spying, military training exercises in cities across the country, the blatant disregard for the 4th Amendment during the shutdown of Boston, and un-Constitutional mandates of Obamacare, there has been a tremendous increase in chatter about secession. A google search gets over 200,000 hits in the last year. The divide between red states and blue states has never been wider.

  • The government will accelerate their surveillance efforts and renew their attempt to monitor, control, and censor the internet. This will result in increased cyber-attacks on government and corporate computer networks in retaliation.

If anything I dramatically underestimated the lengths to which the United States government would go in their illegal surveillance of the American people and foreign leaders. Edward Snowden exposed the grandest government criminal conspiracy in history as the world found out the NSA, with the full knowledge of the president and Congress, has been conspiring with major communications and internet companies to monitor and record every electronic communication on earth, in clear violation of the 4th Amendment. Government apparatchiks like James Clapper have blatantly lied to Congress about their spying activities. The lawlessness with which the government is now operating has led to anarchist computer hackers conducting cyber-attacks on government and corporate networks. The recent hacking of the Target credit card system will have devastating implications to their already waning business. I’ll take credit for an accurate prediction on this one.

Global Disorder 

  • With new leadership in Japan and China, neither will want to lose face, so early in their new terms. Neither side will back down in their ongoing conflict over islands in the East China Sea. China will shoot down a Japanese aircraft and trade between the countries will halt, leading to further downturns in both of their economies.

The Japanese/Chinese dispute over the Diaoyu/Senkaku islands has blown hot and cold throughout the year. In the past month the vitriol has grown intense. China has scrambled fighter jets over the disputed islands. The recent visit of Abe to a World War II shrine honoring war criminals has enraged the Chinese. Trade between the countries has declined. An aircraft has not been shot down, but an American warship almost collided with a Chinese warship near the islands, since our empire must stick their nose into every worldwide dispute. We are one miscalculation away from a shooting war. It hasn’t happened yet, so my prediction was wrong.

  • Worker protests over slave labor conditions in Chinese factories will increase as food price increases hit home on peasants that spend 70% of their pay for food. The new regime will crackdown with brutal measures, but the protests will grow increasingly violent. The economic data showing growth will be discredited by what is happening on the ground. China will come in for a real hard landing. Maybe they can hide the billions of bad debt in some of their vacant cities.

The number of worker protests over low pay and working conditions in China doubled over the previous year, but censorship of reporting has kept these facts under wraps. In a dictatorship, the crackdown on these protests goes unreported. The fraudulent economic data issued by the government has been proven false by independent analysts. The Chinese stock market has fallen 14%, reflecting the true economic situation. The Chinese property bubble is in the process of popping. China will never officially report a hard landing. China is the most corrupt nation on earth and is rotting from the inside, like their vacant malls and cities. China’s economy is like an Asiana Airlines Boeing 777 coming in for a landing at SF International.

  • Violence and turmoil in Greece will spread to Spain during the early part of the year, with protests and anger spreading to Italy and France later in the year. The EU public relations campaign, built on sandcastles of debt in the sky and false promises of corrupt politicians, will falter by mid-year. Interest rates will begin to spike and the endgame will commence. Greece will depart the EU, with Spain not far behind. The unraveling of debt will plunge all of Europe into depression.

Violent protests flared in Greece and Spain throughout the year. They did not spread to Italy and France. The central bankers and the puppet politicians have been able to contain the EU’s debt insolvency through the issuance of more debt. What a great plan. The grand finale has been delayed into 2014. Greece remains on life support and still in the EU. The EU remains in recession, but the depression has been postponed for the time being. This prediction was a dud.

  • Iran will grow increasingly desperate as hyperinflation caused by U.S. economic sanctions provokes the leadership to lash out at its neighbors and unleash cyber-attacks on Saudi Arabian oil facilities and U.S. corporations. Israel will use the rising tensions as the impetus to finally attack Iranian nuclear facilities. The U.S. will support the attack and Iran will launch missiles at Saudi Arabia and Israel in retaliation. The price of oil will spike above $125 per barrel, further deepening the worldwide recession.

Iran was experiencing hyperinflationary conditions early in the year, but since the election of the new president the economy has stabilized. Iran has conducted cyber-attacks against Saudi Arabian gas companies and the U.S. Navy during 2013. Israel and Saudi Arabia have failed in their efforts to lure Iran into a shooting war. Obama has opened dialogue with the new president to the chagrin of Israel. War has been put off and the negative economic impacts of surging oil prices have been forestalled. I missed on this prediction.

  • Syrian President Assad will be ousted and executed by rebels. Syria will fall under the control of Islamic rebels, who will not be friendly to the United States or Israel. Russia will stir up discontent in retaliation for the ouster of their ally.

Assad has proven to be much tougher than anyone expected. The trumped up charges of gassing rebel forces, created by the Saudis who want a gas pipeline through Syria, was not enough to convince the American people to allow our president to invade another sovereign country. Putin and Russia won this battle. America’s stature in the eyes of the world was reduced further. America continues to support Al Qaeda rebels in Syria, while fighting them in Afghanistan. The hypocrisy is palpable. Another miss.

  • Egypt and Libya will increasingly become Islamic states and will further descend into civil war.

The first democratically elected president of Egypt, Mohammed Morsi, was overthrown in a military coup as the country has descended into a civil war between the military forces and Islamic forces. It should be noted that the U.S. supported the overthrow of a democratically elected leader. Libya is a failed state with Islamic factions vying for power and on the verge of a 2nd civil war. Oil production has collapsed. I’ll take credit for an accurate prediction on this one.

  • The further depletion of the Cantarell oil field will destroy the Mexican economy as it becomes a net energy importer. The drug violence will increase and more illegal immigrants will pour into the U.S. The U.S. will station military troops along the border.

Mexican oil production fell for the ninth consecutive year in 2013. It has fallen 25% since 2004 to the lowest level since 1995. Energy exports still slightly outweigh imports, but the trend is irreversible. Mexico is under siege by the drug cartels. The violence increases by the day. After declining from 2007 through 2009, illegal immigration from Mexico has been on the rise. Troops have not been stationed on the border as Obama and his liberal army encourages illegal immigration in their desire for an increase in Democratic voters. This prediction was mostly correct.

  • Cyber-attacks by China and Iran on government and corporate computer networks will grow increasingly frequent. One or more of these attacks will threaten nuclear power plants, our electrical grid, or the Pentagon.

China and Iran have been utilizing cyber-attacks on the U.S. military and government agencies as a response to NSA spying and U.S. sabotaging of Iranian nuclear facilities. Experts are issuing warnings regarding the susceptibility of U.S. nuclear facilities to cyber-attack. If a serious breach has occurred, the U.S. government wouldn’t be publicizing it. Again, this prediction was accurate.

I achieved about a 50% accuracy rate on my 2013 predictions. These minor distractions are meaningless in the broad spectrum of history and the inevitability of the current Fourth Turning sweeping away the existing social order in a whirlwind of chaos, violence, financial collapse and ultimately a decisive war. The exact timing and exact events which will precipitate the demise of the establishment are unknowable with any precision, but there is no escape from the inexorable march of history. While most people get lost in the minutia of day to day existence and supposed Ivy League thought leaders are consumed with their own reputations and wealth, apparent stability will morph into terrifying volatility in an instant. The normalcy bias being practiced by an entire country will be shattered in a reality storm of consequences. The Crisis will continue to be driven by the ever growing debt levels, civic decay caused by government overreach, and global disorder driven by resource shortages and religious zealotry. The ultimate outcome is unpredictable, but the choices we make will matter. History is about to fling us towards a vast chaos.

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

Knarf plays the Doomer Blues

https://image.freepik.com/free-icon/musical-notes-symbols_318-29778.jpg

Support the Diner

Search the Diner

Surveys & Podcasts

NEW SURVEY

Renewable Energy

VISIT AND FOLLOW US ON DINER SOUNDCLOUD

" As a daily reader of all of the doomsday blogs, e.g. the Diner, Nature Bats Last, Zerohedge, Scribbler, etc… I must say that I most look forward to your “off the microphone” rants. Your analysis, insights, and conclusions are always logical, well supported, and clearly articulated – a trifecta not frequently achieved."- Joe D

Archives

Global Diners

View Full Diner Stats

Global Population Stats

Enter a Country Name for full Population & Demographic Statistics

Lake Mead Watch

http://si.wsj.net/public/resources/images/NA-BX686_LakeMe_G_20130816175615.jpg

loading

Inside the Diner

Quote from: azozeo on Today at 11:35:09 AMQuote from: RE on Today at 10:39:04 AMQuote from: azozeo on Today at 10:26:38 AM[quote author=RE link=topic=6033.m...

For over 700 days, a mysterious spacecraft has been orbiting the Earth, and yet no one other than the U.S. Air Force knows why.So what exactly is going on here? First, some background from IFL Science:[url=https://www.ancient-code.com/a-spacecraft-h...

September 18th, 2019by Richard PatersonGuest Writer for Wake Up WorldDo you remember how carefree and alive you felt a kid? How you would leap out of bed every morning, brimming with excitement for the day ahead?You were joyful for no reason and y...

Truly one of the great lost civilizations of the earth is the Inca Empire of the Andes Mountains of Peru. At its most powerful and illustrious during the 14th and 15th centuries, the Inca Empire at one point stretched over a vast area encompassing par...

Update 4: It’s over: after a torrid 30 minutes in which the NY Fed first announced a repo operation, then announced the repo was canceled due to technical difficulties, then mysterious the difficulties went away just minutes later, at precisely 10:10a...

Knarf’s Knewz

LUXEMBOURG (Reuters) - The European Union’s order [...]

As the 2018 harvest approached, North Dakota farme [...]

Diner Newz Feeds

  • Surly
  • Agelbert
  • Knarf
  • Golden Oxen
  • Frostbite Falls

Doomstead Diner Daily September 17The Diner Daily [...]

Fracking boom tied to methane spike in Earth’s atm [...]

Russia hacked the FBI to prevent the bureau from b [...]

Quote from: Surly1 on September 16, 2019, 06:08:09 [...]

Retail Apocalypse: 2019 Store Closures Already Sur [...]

Quote from: UnhingedBecauseLucid on March 18, 2019 [...]

CleanTechnicaSupport CleanTechnica’s work via dona [...]

QuoteThe FACT that the current incredibly STUPID e [...]

LUXEMBOURG (Reuters) - The European Union’s order [...]

As the 2018 harvest approached, North Dakota farme [...]

Scientists have unlocked the power of gold atoms b [...]

Quote from: azozeo on August 14, 2019, 10:41:33 AM [...]

Wisconsin Bill Would Remove Barrier to Using Gold, [...]

Under extreme conditions, gold rearranges its atom [...]

The cost of gold futures on the Comex exchange inc [...]

Quote from: K-Dog on September 15, 2019, 08:08:32 [...]

Good interview.  You sounded smart. [...]

A little Political Bickering is a small price to p [...]

Alternate Perspectives

  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

Shaking the August Stick By Cognitive Dissonance     Sometime towards the end of the third or fourth [...]

Empire in Decline - Propaganda and the American Myth By Cognitive Dissonance     “Oh, what a tangled [...]

Meanderings By Cognitive Dissonance     Tis the Season Silly season is upon us. And I, for one, welc [...]

The Brainwashing of a Nation by Daniel Greenfield via Sultan Knish blog Image by ElisaRiva from Pixa [...]

A Window Into Our World By Cognitive Dissonance   Every year during the early spring awakening I qui [...]

Event Update For 2019-09-15http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-09-14http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-09-13http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-09-12http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-09-11http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

With fusion energy perpetually 20 years away we now also perpetually have [fill in the blank] years [...]

My mea culpa for having inadvertently neglected FF2F for so long, and an update on the upcoming post [...]

NYC plans to undertake the swindle of the civilisation by suing the companies that have enabled it t [...]

MbS, the personification of the age-old pre-revolutionary scenario in which an expiring regime attem [...]

Daily Doom Photo

man-watching-tv

Sustainability

  • Peak Surfer
  • SUN
  • Transition Voice

The Trickster's Tale"Everyone has some wisdom, but no one has all of it." Come gather 'round my children [...]

Nothing Again - Naomi Klein Renews Her Climate Prescription"By now we should all be well aware by now of the havoc being caused by climate change." I [...]

Leaves of Seagrass"Seawater is the circulatory system of Gaia"In 1855, Walt Whitman penned the free verse, “ [...]

Treeplanting Olympics"Withdrawing 700 gigatons of carbon from the atmosphere could be accomplished by as early as mi [...]

The Dark Cloud"Skynet needs to send a terminator back to 1984 and take out Mark Zuckerberg’s mom before he ca [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

What extinction crisis? Believe it or not, there are still climate science deniers out there. And th [...]

My new book, Abolish Oil Now, will talk about why the climate movement has failed and what we can do [...]

A new climate protest movement out of the UK has taken Europe by storm and made governments sit down [...]

The success of Apollo 11 flipped the American public from skeptics to fans. The climate movement nee [...]

Today's movement to abolish fossil fuels can learn from two different paths that the British an [...]

Top Commentariats

  • Our Finite World
  • Economic Undertow

Art Berman is saying he sources are saying the attack was an inside job. https://twitter.com/aeberma [...]

That is an interesting viewpoint. I haven't heard it before. [...]

Right--he did the same thing with North Korea. People are onto him. [...]

Sounds like a problem that could have been solved by a few hundred people directing traffic... [...]

The main barrier to selling your old diamonds is not De Beers, but the fact that the predominantly O [...]

Hi Steve. I recently found what I believe is a little gem, and I'm quite confident you'd a [...]

The Federal Reserve is thinking about capping yields? I don't know how long TPTB can keep this [...]

As some one who has spent years trying to figure out what the limits to growth are. let me say that [...]

Peak oil definitely happened for gods sake. Just because it isn't mad max right now is no indic [...]

@Volvo - KMO says he made some life choices he regrets. Not sure what they were. And I don't th [...]

RE Economics

Going Cashless

Off the keyboard of RE Follow us on Twitter @doomstead666...

Simplifying the Final Countdown

Off the keyboard of RE Follow us on Twitter @doomstead666...

Bond Market Collapse and the Banning of Cash

Off the microphone of RE Follow us on Twitter @doomstead666...

Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

Off the Keyboard of RE Follow us on Twitter @doomstead666...

Kurrency Kollapse: To Print or Not To Print?

Off the microphone of RE Follow us on Twitter @doomstead666...

SWISSIE CAPITULATION!

Off the microphone of RE Follow us on Twitter @doomstead666...

Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

Off the keyboard of RE Follow us on Twitter @doomstead666...

Merry Doomy Christmas

Off the keyboard of RE Follow us on Twitter @doomstead666...

Peak Customers: The Final Liquidation Sale

Off the keyboard of RE Follow us on Twitter @doomstead666...

Collapse Fiction

Useful Links

Technical Journals

The Antarctic Centennial Oscillation (ACO) is a paleoclimate temperature cycle that originates in th [...]

The building environment parameterization scheme (BEP) is a built-in “urban physics” sch [...]