Tuesday, April 30, 2013

What Will Happen When - Reality Comes Home...

Central Banksters and HFT Bots obviously don't have emotions, so they have kindly sponsored the greatest vacation from reality in human history. Unfortunately, the rest of humanity is still prone to fear, so when reality returns - and it always does - the "outcome" will not be controllable by either Central Banks nor HFT bots...

Monday, April 29, 2013

Coming In For A Landing

The Baby Boomers are on the final approach to retirement and they don't want anyone to do anything, that might derail that event. But unfortunately they smoked a few too many "doobies" back in the '70s, so we have to wait for them to remember that they sold the runway...

Sunday, April 28, 2013

Wall Street's Manchurian Candidate

History will neither forgive nor forget Obama for not reforming Wall Street. 
It's the only thing he had to do...

Saturday, April 27, 2013

This Time Won't Be Different

Comfort-seeking apologists for this latest credit bubble who have deluded themselves into believing that "this" is reality, are overwhelmingly desperate to assume that things will turn out different this time, so they tell us that there is no sign of "froth" in the markets. As always, they just have to open their eyes...

Ground and Pound On Global Ponzi Capitalism

Paul Farrell went all in against Ponzi Capitalism. Then Shedlock went after Farrell - essentially telling us that "true" capitalism works great, but government is the root of all evil.

So now, I will rebut Mike Shedlock...

Friday, April 26, 2013

The Poverty Express - Makes All Stops

A wake up call to all of the sanctimonious hypocrites who constantly remind us of atrocities from bygone eras - and yet, turn a blind eye to, and otherwise profit from the extreme degrading poverty that is spreading rampantly on a global basis...

First they came for the African children, but I
did not speak out -
Because I am not an African child

Then they came for the Asian sweatshop workers but I 
did not speak out - 
Because I am not a sweatshop worker

Then they came for the blue collar workers, but I 
did not speak out - 
Because I am not a blue collar worker

Then they came for the union workers, but I
did not speak out - 
Because I am not a union worker

Then they finally got around to the Faux News Neocons
and the Limousine Liberal hypocrites -
Who met their own creation face to face -
...even history couldn't care.

BTFD - Bring Your Own Underwear...

[Updated April 26th, 2013]
You wouldn't know it by the headlines, but market internals are extremely weak right now. The real question on the table now isn't whether or not the market will drop, but where will it stop...

Thursday, April 25, 2013

Skynet Will Terminate The Markets

Stepping back, everyone is asking how this blogger (me) can be so certain that global markets will crash. How can a "Black Swan" event of that magnitude be predicted with certainty?

My response is - the HFT bots are already destroying Wall Street, so it's only a matter of time before they take down the entire market...

Economic Euthanasia

Historians will package this entire era of Central Bank monetizations under the heading of 'economic euthanasia'. Bizarrely, even as the underlying economic fundamentals steadily deteriorate, it feels as though the status quo can be maintained indefinitely. One would never know that Central Banks have to step in daily to support the markets, to keep them levitated. Meanwhile, this artificially generated feeling of economic stability gives the policy-makers the cover to do the only thing they are capable of doing to fix the real economy i.e. nothing...

Mass Confusion

The Financial media are out there again sowing mass confusion over the risks of owning bonds v.s. stocks. I have been steadfast that owning short-term Treasuries is the (relatively) safest haven. Which they have been through thick and thin...

Wednesday, April 24, 2013

The Status Quo is the Path to Anarchy

When anarchy breaks out on the other side of the next inevitable financial meltdown, our thought dealers will be loathe to realize that they sowed the seeds of their own destruction.

As long as someone else's children were doing the suffering, the status quo was fine by them. By willfully ignoring the ongoing economic pain felt at the bottom of the pyramid and now up through the middle, our self-nominated "elites" are creating an inevitable path to anarchy...

Monday, April 22, 2013

Predictions Are For Fools

Some would say that blogs like this one that try to predict the future are merely parlour games for fools. Generally speaking, I don't attempt to predict the future. At most, I attempt a guess at what policies will come into being on the other side of the economic "reset". The rest of what I do here does not involve prediction of what will happen, it's merely a description of what already has happened. The real fools of this age are those who believe that the status quo is the least bit sustainable. Because to believe in the status quo requires the prediction that a set of events will occur that have never before occurred in human history:

Sunday, April 21, 2013

Fake It, 'Til You Break It

The most realistic part of the movie, "The Matrix", is when the guy who has been living outside of the Matrix, cuts a deal with the computers to plug him back in. He would rather live as a mindless human battery in a phony, denatured fantasy than to face a gritty reality. Unbeknownst to the overwhelming majority of today, we too live in a computer generated fantasy of our own - one sponsored by Central Banks and managed by HFT bots. Like the guy in the Matrix, today's average yuppy has no ability to face life in reality.  Keeping up with the (Dow) Jones' has exacted a heavy toll on the Prozac set...

Ship of Fools: All Aboard, Aye

No sooner had I penned my piece indicating that the Dow (Jones Industrial Average) is the ultimate barometer of social mood, than we see this, from Barrons:

Fund managers have already tied the rope around their neck, so now we have to see if they will go bungy jumping off the bridge. Sentiment-wise there couldn't be a better set-up for a panic collapse than this one - a phony, liquidity driven market supported merely by fund manager hopium...

Saturday, April 20, 2013

The Temple of Greed is Already Collapsing

These are the last days of Extend and Pretend and its farce spectacle. It's a policy that only ever appealed to feeble minded buffoons and their numerous acolytes. For anyone who doesn't mind a bit of crunch in their peanut butter, this vacation from reality has been one mind numbing rat race to nowhere...

Friday, April 19, 2013

Anarchy as Spectacle - Online Education...

When the Goths, Vandals, Huns and other assorted "barbarians" besieged the Roman Empire, the elite of the time knew that as the frontiers of the empire crumbled, they needed to keep the masses at large distracted to prevent internal unrest. So they created the coliseum games aka. "spectacle"...

Monday, April 15, 2013

Hindenburg Omen

American Idolatry

Full credit to all of the fake people with their fake ideas and fake believers, for getting us this far. None of this would have been possible without enough people believing in nothing and questioning nothing. Those who trusted their investment advisors over Occupy Wall Street, still haven't learned about "conflict of interest". That lesson and its steep fee are pending personal delivery...

A Bit of the Old Ground and Pound

What is happening to gold right now foretells the future for stocks. For years - since the bottom in 2009 - apologists for the status quo have been saying that low volume is not an issue, merely because it hasn't been so far. However, volume equals liquidity and lack of liquidity is a big reason why gold can't find a bottom...

Friday, April 12, 2013

Rome Is Burning - just the dying warm glow...

"Your corruption smells of destruction"


Bitcoin was supposed to be the digital alternative to the dollar. Like everything else in the Idiocracy, it went straight up and straight down:

Thursday, April 11, 2013


No - Not me, of course...

But hedge funds can't take this kind of pain. After massively underperforming last year and again in the first quarter of this year, they have no choice but to buy the market unhedged or find a new job. The goal of this robo market is to make hedging and risk management impossible...Which is a necessary and sufficient condition for generating an underwear staining panic during the inevitable sell-off...

Wednesday, April 10, 2013

Let Them Eat Cake

Global clerics put out another cash call this week to guilt developed countries into meeting their .7% of GDP commitment to the Millenium Development Goals (MDG) - which was made way back in 1970 and reaffirmed in 2000. Of course, these goals are all intended to improve the lives of people living in poorer nations. Unfortunately, the "wealthy" countries can only afford .31% of GNI - which is what they have delivered so far. Because we are too busy still spending 45 times that amount, digging out from 2008.  Above I present the costs in accumulated debt incurred by OECD nations since 2008.

This is a morally void society that plunders its grandchildren to pay off Wall Street's gambling debts, but can't come up with 1 cent on the dollar to help the poorest people on the planet - people who subsidize our bloated lifestyle. 

Meanwhile, there is no exit strategy for these deficits which are the only thing keeping the economies afloat, so they will continue until one by one the developed nations succumb to bankruptcy. A process that will go slowly at first and then all at once...

History's Longest (and most expensive) Vacation From Reality

The S&P 500 - Wall Street's primary benchmark, finally joined the Dow at a new all time (closing and intraday) high today. All it took was $6 trillion of OECD debt and $9 trillion of central bank monetizations. The truly pathetic fact of course is that the S&P is now only 2% above the peak it reached in March of 2000. However, the Idiocracy at large is willing to ignore all risk, all costs, all warning signs, as long as they can pretend that retirement and mall shopping can continue as normal...

The past 40 years of ponzi-style globalization was the longest vacation from reality in human history. It was fueled by computers, central banks, mass outsourcing, derivatives and greed - all of which were relatively recent inventions (except greed). Of course, the resulting historically unprecedented excesses culminated in the 2008 meltdown which would have put an end to the entire scheme. However, policy-makers saved the day by extending the vacation another four years. Basically we are now in a vacation within a vacation - from reality. This extension of course is costing orders of magnitude more per day than the original multi-decade boondoggle. And the bill has not yet come due; but when it does, the vacation will end and reality will come back with an uncontrolled vengeance. Granted, there are many who have lived the good life for so long they don't think it can end. Or at minimum, they think it's a fool's errand to try to predict when it will end. Suffice to say, the same imbalances and leveraged risks that led to 2008, are back again - because they never went away. So the real fool's errand is believing this can all continue, when everyone knows it can't...

Tuesday, April 9, 2013

Do That To Me One More Time

[Updated: April 11, 2013]
The streak has continued through Wednesday. Tuesday's reading was the second lowest in six years (Below are the lowest three P/C occurrences since 2006):

Previously, I had shown that the index put/call ratios were extremely low in the past 6 months. Over the past six years, combined, index put/call ratios were only below "1" fifteen percent of the time. In fact, instances of the ratio below "1" were once considered outliers. In the past three weeks there has only been one day when the ratio was above "1". Indicating speculators are now using index options to increase market exposure rather than to hedge. 

Meanwhile, IBD tells us that there have been no less than 6 distribution days on the S&P and Nasdaq since early March, meaning that institutions are selling hard into this rally. Volume is rising on down days and falling on up days. They know that earnings will be bad and earning outlooks will be worse...

Saturday, April 6, 2013

The Days of Rage Are Approaching

ZH just published 21 key poverty statistics for the United States. 57% of American children live in a household that is economically marginalized. They live on the bread crumbs falling off the table. When the bubble bursts, that number will only grow exponentially given that most Americans are no more than one or two pay checks away from bankruptcy. The United States is at risk of devolving from a nation, into a failed historical experiment. Of course, should that occur, the resulting crater would subsume much of the rest of the planet as well.

Those who profess an undying faith in laissez-faire capitalism, should have kept their monster under control. Instead they let if off its leash to rampage across the planet. As long as someone else's children were the ones dying, the apologists never seemed to mind. Well, now the monster has come home hungry.  These Ayn Rand worshippers are now going to be silenced by their own self-cannibalizing creation...

Friday, April 5, 2013

More Brown Swans Flocking

Brown Swan Event: 
A highly predictable, in fact inevitable, risk event that everyone knows could happen, but conveniently assumes won't happen in their lifetime...[The full definition here]. In other words it's just another form of self-delusion that allows Baby Boomers to fool themselves into thinking that they are conveniently shifting risks on to the next generation. The same way they start wars that they don't have to fight, despite being the generation that invented burning of Draft cards. To wit, all recent Presidents have had no military experience despite involving the U.S. in the most protracted conflicts in U.S. history. It's a Milton Bradley defense strategy invented by Neocon dunces, none of whom themselves have any military background. The Military Industrial Complex of course is a major component of the U.S. Kleptocracy. I don't know how these Generals in the Pentagon looks themselves in the mirror knowing they have bankrupted their own country. Osama Bin Laden never dreamed that 9/11 would cause so much self-inflicted damage. History will speak of how one man inadvertently felled an entire global empire, by radicalizing Faux News and its comfort-seeking audience who saw terrorists on every street corner; and in every Home Depot, where after 9/11, I was stalked by a guy who apparently thought I was a terrorist buying a garden hose (yes, I am off-white).

Where was I...

Thursday, April 4, 2013

Land of the Setting Sun

It's sad and pathetic what is happening to Japan, but it's a cautionary tale for any aging society that would rather repeat the same failed policies for twenty years straight than to face reality.

Last night (and again tonight), the Nikkei went parabolic, gaining 4% when the Bank of Japan revealed its latest "shock and awe" monetary easing campaign. Monetary easing hasn't worked for the past 20 years, but I am sure it will fix the economy any day now...

Refuting Krugman & Company - w/Third Grade Logic

David Stockman's rant was good, but it was too long and convoluted to capture the attention of the Idiocracy, which has the attention span of a coked up flea.

Below in about one page, I will easily refute the assertions of Paul Krugman and the myriad other thought dealers of our time who have convinced the Idiocracy that the status quo is indefinitely sustainable:

Wednesday, April 3, 2013

Ignore All Risk - And Live the Lie...

Let's see, the U.S. market (.SPX) is at the same level it reached in 2000 and 2007 when it topped. More importantly, the technical risk indicators, are lined up the same way (chart below)...

Europe's sovereign debt crisis - like the subprime housing crisis of 2008, is by no means resolved...

Geopolitical risks are as high as ever, with North Korea just now fully approving a U.S. nuclear attack, and having pulled out of Kaesong - i.e. both likely preludes to an invasion on the South. What better way to keep the U.S. out of the conflict, than to pre-announce a tactical nuclear counter-strike...

So aside from higher risk, what is the only other real difference between now and 2008?
Self-appointed thought dealers from Wall Street to Washington, are brainwashing us constantly to ignore all risk...

Tuesday, April 2, 2013


U.S.K - United States of Kleptocracy

Kleptocracy, alternatively cleptocracy or kleptarchy, (from Greekκλέπτης - kleptēs, "thief"[1] and κράτος - kratos, "power, rule",[2] hence "rule by thieves") is a form of political and government corruption where the government exists to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population, often without pretense of honest service...