This Isn't A Fucking Mystery Novel...

I just read this article on ZH stating that all market predictions are akin to astrology in their predictive value. Unfortunately, estimating the shelf life of this manufactured bubble we live in, is not a fucking mystery novel for the delight and entertainment of the Idiocracy. I suppose for those who slept through the other two monetary-inflated asset bubbles in just the past 13 years, and for those willing to lose everything this next time around, then this must all seem like just another academic parlour game...

Melt-up to Melt-down

It's axiomatic that in order for something to go down, it must first go up. On Wall Street it's known as "Mo In, Mo Out" - Momentum In, Equates to Momentum Out. Something we've seen with dozens of stocks and asset classes in the past decade. The Elliot Wave types have this as the mother of all "b" waves - a phony overthrow retracement meant to suck in as many fools as possible. Given the overwhelming supply of fools in this society, it can come as no surprise that the levitation-fest has lasted this long. Anyone who thinks this (below) is the least bit sustainable, is doing the solo wrap-around as exhibited in the prior post. 

The Most Cynical Society In Human History

Any society which blithely assumes that a high degree of greed, corruption, deception and mealfeasance is just "business as usual", will be totally surprise obliterated when it all leads to collapse...

BTFD: Do That To Me One More Time...

Global stock markets, commodities, precious metals, credit markets (municipal, junk, corporate), now real estate (below) and U.S. macro-economic data are all in downtrends.

U.S. stocks are at the precipice. Wall Street and the masses at large are still BTFD...

Global Dominoes Starting to Fall

Just waiting for Wall Street to shit a brick...(yes, again)...

Hindenburg Clusterfuck 4.0

The last time there were four Hindenburg Omens clustered together, was at the top in 2007...

Sale at Walmart

When Walmart peaked in 2008, the market crashed...

Careful What You Wish For

All the masses ever wanted was a Dow that would go straight up...So that's what they got.

Fool me three times, shame on me...

Over-Confident Buffoons Running Amok

Raw facts and data have never been more abundant or accessible. The usable information gained via the analysis of these raw facts and data, is likewise unprecedented in quantity and quality. Unfortunately, judgement, which is the interpretation of information, has never been worse...

The Hindenburg Express

I was tempted to go postal with an epic rant today, but there is nothing left to say. Blog-blasting the oblivious Idiocracy has left even me exhausted.  You can't convince people to believe something that they are unwilling or unable to accept, regardless of how obvious or true; which means that I've been pounding sand up my ass for four years straight. This overwhelmingly corrupt society has a first class rendezvous with destiny:

Subprime 2.0

It's not hard to spot the *new* "subprime" of this current monetary bubble cycle i.e. the epicenter for the next collapse. Aside from Japanese (Spanish, Italian, "insert country here") bonds, the most likely next candidate is junk (aka. high yield) bonds.

The Pump and Dump Gains Momentum

Global risk markets are breaking down, but complacency reigns on Wall Street...

Relentless Deflation

Those who still don't understand why Monetary Policy is no longer working, beyond (temporarily) inflating asset prices, are being constantly smacked in the face with the answer...

Hindenburg Omen 3.0: Major Cluster (Fuck)

The third one this cycle. The Hindenburg Omen portends a market crash, especially when seen in clusters

A Pointless Way of Life, Now Self-Destructing

"I used to get high on life, but pretty soon I built up a tolerance.  I used to seize the day, then I started seizing two days, three days, then I was a seizing a week, just to get the same buzz." - Arj Barker

Fat and Happy

Judging by my blog stats which are now trending down for the first time in 12 months, you would think that all of the world's economic problems have been solved. Complacency has a way of showing up when it can do the most damage.

Of course, the underlying economic problems - both here in the U.S. - and across most of the developed world, are moving in the wrong direction. The Central Bank Jedi Mind Trick of levitating the Dow Jones Industrial Average at all cost, has done its job of fooling the Idiocracy into believing that things are actually getting better instead of worse...

War on Terror II: Attack of the Drones (Now On Sale)

The Obamanator tried to bounce back from a week of bludgeoning by the Republicans over various second-term corruption fiascos, by telling the country that the "war on terror is over". Holy shit, you may as well have told the old folks home that dinner is at 7pm instead of 4:30. The Faux Newstards went insane. This black, communist, anti-christ is "projecting weakness" at the worst possible time.

Unfortunately, nothing projects weakness like seeing over-fed comfort-seekers talking about projecting weakness...

The High Cost of Faking It

All Ponzi schemes are premised on a grand lie. 

The globalized Ponzi scheme is based upon the biggest lie of all...

Cracks in the Facade

There were major dislocations under the surface of the markets this week.

As usual, the Idiocracy played hop scotch over the widening cracks in the pavement...

The Idiocracy Is Facing Extinction

History's dumbest society is facing annihilation. I just got back from taking my fifteen year old daughter to a soccer practice, all the way to the local University, because apparently the 500+ empty fields between us and the University were not suitable for a mere practice. One of three practices this week, book-ended by out-of-state weekend tournaments over six hours away. If you think I am an idiot for going along with this, you are correct, if you assume I had any say in it, then you must not be married. Now you know why I have a blog - because blogging and praying for meteor strikes are the only things keeping me from going full Unabomber and escaping to a cabin in Montana. This society - like its economic policies - has gone full retard...

The Largest Asset Crash in History

Parabolas and markets don't mix:

Supernova

You can tell I am somewhat superstitious and always looking for some arcane sign of the 'top'.

For example the S&P closing at 1666.

Or solar stocks going supernova...

Why Gold is The Canary In The Coal Mine

According to Pimco's El-Erian, gold is similar to Apple and Facebook - its valuation became stretched and disconnected with the underlying fundamentals and therefore its price could no longer be justified. This is a process he calls "stable disequilibrium".

In the real world, we call that "common sense"...

Born In The Bubble

The basis of Elliot Wave Theory is that social mood drives markets, therefore all other economic factors are second derivative. Meaning that when social mood reaches its maximum limits (manic or depressive), then the markets and economy will follow. The tangible manifestation of social mood therefore is in the stock market, which is the ultimate barometer of social optimism and pessimism. The wave counts that EWT uses to track the markets are intended to track the expansion, contraction and exhaustion of social mood.

That's all well and good, however, Central Banks and HFT bots didn't get the memo...

Humanity's Test: 666 - 1666

Well, humanity failed. 

After 2008, this society was confronted with the inherent depravity of the globalized ponzi scheme. However, instead of addressing those fundamental inequalities, this society, as usual chose instead to rebuild the temple of greed as quickly as possible and resume worshipping. At this juncture, those who have bought in to this phony market and this globalized ecological/human catastrophe (aka."the economy") --- have sold their souls.

Because as long as someone else's children were doing the dying, it was all good...

Asset Inflation v.s. Price Inflation

The only bet on the table right now, for anyone actually thinking about these things, is whether or not asset inflation which is going supernova, as I showed via the Nikkei, will continue long enough to lead to a generalized price inflation across the real economy i.e. what most people consider true "inflation"...

Aw Fuck, Not This Again !!!

"I thought the free bailout fixed all these problems..."

When the Idiocracy realizes that they got conned yet again, the masses will claim that - no one told them a) Wall Street was still corrupt  b) HFT bots run the markets c) politicians are stooges and  d) Central Banks printing money to be used for leveraged speculation, is a bad idea. Who would know these things? But unfortunately, this morally bankrupt society has a well practiced habit of giving a free pass to its greatest criminals i.e. those at the top of the overall Ponzi scheme. Obama is now on his second term and still hasn't lifted a finger to reform Wall Street for what happened in 2008. So only a moron assumes anything there has changed. Likewise, when it was discovered that the premise for the Iraq war - Weapons of Mass Destruction - was fabricated, the Idiocracy yawned and re-elected George W. Bush... 

Moral Collapse to Market Collapse

I was holding off from posting, because nothing ever changes: Same old, same old - markets levitating daily due to Central Bank interventions, while the Idiocracy at large looks the other way - desperate to believe that printing money can substitute for fixing the real economy.

It's frustrating living in a superficial fantasy bubble devoid of all reality, to be sure. But considering that this society has no problem bankrupting its own grandchildren merely to maintain phony appearances, then no amount of financial chicanery is beyond its reach...

Love Thy Neighbour Or Perish - Decisions, Decisions...

The measure of a real man (or woman) is what he does for others, not what he does for himself. 

Comfort seeking - the order of the day - is the domain of children and refugees...

Ponzi Collapse - In Real Time...

Ponzi schemes collapse from the bottom up. Of course those at the bottom of the globalized ponzi scheme never realized any of its benefits. After the events of 2008, however, global thought dealers realized they could save either the billionaires or the middle class. So they chose to save the billionaires. The policies since that time - fiscal, regulatory and monetary have achieved that ends. The middle class has become increasingly marginalized while the wealth of the global plutocrats reaches ever-greater proportions. The U.S. debt alone has risen by $7 trillion since 2007, and yet all of the gain from that profligacy accrued to the billionaire class. The globalized ponzi scheme is collapsing in real time and claiming more victims with each passing day...

Upside Down Market

This market is upside down in more ways than one. Primarily because there are buyers at higher levels and sellers at lower levels. Higher levels are bringing out buyers due to performance chasing, momentum strategies, (low) volatility driven algos, HFT momentum ignition, short-covering, small investors watching CNBS wanting a 'Dow 15,000' hat of their own, and of course the ever-present Central Bank liquidity bid...

Life (And Death) In A Stagnant Society

Our thought dealers are running the global economy like it's an old age home - no one gets any better, and no one leaves through the front door.

Well, as long as they had a good run, that's what matters...

Just Another Greater Fool's Market

Conflict of Interest

One of the most disastrous side effects of the mass commercialization of society is that the concept of "conflict of interest" has been totally obliterated. Any society that wants to survive long-term and otherwise not end in a massive collapse would do well to realize that turning a blind eye to conflicts of interest is a flashing red indicator of rampant corruption...

The Case Against Deflation (Hint: Buy Gold Early and Often)

The Seeds of Destruction

When you visualize Wizard of Oz-like global central banksters now trying to keep $200 trillion of global capital assets levitated, merely by using incremental bond buying programs, you realize just how ludicrous the globalized ponzi scheme has become. Worst of all, they have given corrupt governments a free pass to do nothing to fix the real economy...

"Aw fuck - not this again !!!"

Trending Now: Everything, Except What Matters...

It's all so sadly pathetic and predictable. As long as the Dow is making new highs, the Idiocracy at large never questions the status quo...

All Great Powers are Destroyed from Within

This latest earnings season starkly illustrates once again why "Supply Side Economics" (aka. Reaganomics) is a self-cannibalizing conspiracy of dunces. The fact that so many conservatives still venerate Reagan shows just how morally and intellectually bankrupt the conservative movement is at this point in time. These people are destroying their own country, yet they are too dunced to realize it. History will not pull any punches on these greed addled morons...

This Time Won't Be Different 2.0

Last week, I said that those who were telling us that there were no signs of "froth" in the markets were closing their eyes to all signs of a new bubble. Let's check in on the lovelies to see what happened in the last week...

They Don't Ring A Bell At The Top

Life Inside The Bubble

[Updated: May 14th, 2013]

This is the third and last monetary stimulus fueled bubble. Unlike the last two credit bubbles, this time, no one can point to any ubiquitous signs of  "excess".  That's because the prevailing consumption-oriented lifestyle is the excess - our presumed way of life is the final bubble. To believe in the status quo is to assume that we can borrow from Third World wage slaves indefinitely. The unmistakable indicator of unsustainability is that each bubble has required a vastly greater amount of monetary stimulus than the previous one - which only drives asset speculation rather than sustainable economic growth. The majority can't see the bubble, because they are living in it...

You Can't Fool All The People Every Time

It doesn't seem that long ago that everyone was worried about the big end of year "event". Fortunately, the Fed eased monetary policy massively to placate the markets. And of course when December 31st rolled around and the world didn't end and the economy didn't fall off a cliff as expected,  January came and stocks took off...

Thinking the Unimaginable

I just showed a Twitter post from Pimpco saying that there are two scenarios on the table - bad and worse...

The Needle And The Damage Done

The Fed just signalled that it will keep mainlining monetary heroin into the dying junky some people euphemistically call the "economy" -  until such time as it bounds back to vigorous health - or dies of a heart attack, whichever comes first...

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...

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...

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...

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...

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...

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...

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...

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:

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...

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...

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"...

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...

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

"Your corruption smells of destruction"

Bitcoined

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

Capitulation

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...

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...

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...

The Richest Man In Babylon

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...

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...

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:

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...

Icarus

U.S.K - United States of Kleptocracy

Kleptocracy, alternatively cleptocracy or kleptarchy, (from Greek: κλέπτης - 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...

Atlas Shrugged, Indeed

For those who are blind-sided by what comes next, it's only because they are fully bought in to the status quo and otherwise can't fathom that it could all end at a moment's notice.

They never stop to question whether or not the hundreds of millions of sweatshop factory slaves who keep the globalized Ponzi functioning, will continue to show up for work on time...

What Greed Wants

Everything. 
Careful what you wish for...

Silent Rage

The most bewildering aspect of this age of overwhelming greed is the fact that the people at the top have no fear or trepidation about deriding the people at the bottom of the socioeconomic ladder. I just read this article describing the latest report from the Fraser Institute based in Vancouver. It's a right-wing/libertarian think-tank. The article raises the alarm that fewer and fewer Canadians are paying taxes - a trend that is similar to what they say is occurring in the U.S. Maybe they didn't get the memo, but this was one of the issues that caused Mitt Romney to lose the election, mostly because it's complete and unadulterated bullshit...

Just Another Wall Street Greedfest

The sole goal of Monetary Policy these past four years was to levitate asset markets until the real economy resumed organic growth. Of course, due to the number of jobs shed after 2008, that was never going to happen. Here we are, four years later, still applying record amounts of fiscal and monetary stimulus, while the vacuous morons in leadership scratch their heads as to why there are no jobs...

Fools And Their Money Are Soon Parted

This Cyprus bailout with attendant deposit confiscation for certain depositors appears to be stirring an awakening across the slumbering masses. I am basing that observation merely upon anecdotal evidence at this early juncture. Some here in the U.S. have pointed out that zero percent interest rates for four years straight has been its own form of confiscation, by favouring borrowers over savers. I have made the same point. However, the other major risk arising from zero percent interest rates, is not just underfunded pensions, it's the fact that it has turned many savers into speculators...

Waiting For Minsky

In the past two years the entire global financial system has been in turn held hostage by Spain, Greece and now Cyprus. Soon a Seven-Eleven going tits up will require ECB intervention:

The Globalization Virus

Globalization was on the verge of collapsing in 2008 when world leaders stepped in and rescued it from the dumpster of history. In their infinite wisdom in order to save it, they used the exact same policies that led to the 2008 collapse  - namely,  debt accumulation sponsored by easy Central Bank policy - and they amplified those policies 10 fold. That’s how all problems get "solved" in the Idiocracy.

Regardless, globalization has already failed the majority on this planet and it’s failing more and more people with each and every passing day. Granted, the ever-dwindling number of apologists for this catastrophe happen to be the loudest gas bags in society, so they are still able to drown out the simmering rage of the silent majority. However, like all viruses, the relentless globalization virus can’t be controlled, so it must burn itself out.  Which means that the host will have to die first...

Fool Me Three Times, Shame On Me...

The ECB just gave Cyprus until Monday to agree to the terms of the Eurozone bank bailout plan or face a liquidity "cutoff". Bank depositors are queuing up at ATMs around the country...

Neither side can be seen to capitulate, but nor can they risk a full fledged bank run. Once again, the world economy held at the brink by banks that profited from risky loans that should have never been made in the first place. None of these banking buffoons learned a fucking thing from 2008. What more proof do we need? Meanwhile, the Eurocrats in charge of resolving this fiasco have no clue as to the overall level of macro risk that has been piling up while they were away at Davos...

The Only Chart That Matters

Zero percent interest rates and perpetual money printing makes the dollar a favourite funding currency for the global carry trades. Which means that if the dollar rises, the carry trades need to be reversed - quickly - before something breaks. What's the dollar doing? Rising (below). Which gets back to the theme "Nothing Matters Until It Matters". So far, this is just one more risk being ignored, however, when the dollar hits escape velocity, underwear will once again be stained on Wall Street...

Extend and Pretend: The High Cost of Delusion

I admit to being somewhat inconsistent on reporting the ongoing costs of "Extend and Pretend". I am referring of course to all of the costs incurred since the 2008 bailout to keep this shit show levitated. Sometimes I only count the U.S. costs, other times I add in the trillions printed by other global central banks. That said, at least I make the attempt. The conventional wisdom at large is that the 2008 bailout is a thing of the past. This delusion, that somehow 2008 was an isolated event, systematically ignores the key costs and risks that have grown unchecked in the meantime...

Nothing Matters Until it Matters

[Updated: March 19th, 2013]
Global Confidence Hanging By a Thread
The Cyprus bank holiday is now extended until Thursday while Eurocrats figure out how to pull their head out of their own ass. Meanwhile, we are told that the "damage" is done, because this entire fiasco impairs global confidence in "deposit insurance". Apparently, Cyprus is the only thing standing between us and our trust in the global banking system. Suffice to say that if the fate of the global financial system now hinges upon the whims of a country smaller than a million people whose island is a safe haven for Russian mob money, then the globalized Ponzi is already fucked company. All we are doing now is waiting for Wall Street and the Idiocracy to shit its pants again - and then take notice. Even as I write, the Cypriot Parliament rejected the Eurozone's bank bailout offer, so they are not exhibiting what one would describe as a constructive approach. Last year, around this time, the fate of the world economic system hinged on the troubles of Greece, a nation of 11 million people. At this rate, soon a single bounced check at a payday loan store will collapse the global economy...

Done Like Dinner

It's over. Just a matter of waiting for Wall Street to get its nose out of Bernankenstein's ass.

The signs of overwhelming social decay are ubiquitous, however the Idiocracy slept through history class and therefore can't recognize the point of recognition...

Sudden Death. Overtime.

The divergence between the market and the VIX (options fear gauge), has never been wider, as Wall Street remains heads down in the Central Bank feed bag and Main Street remains head shoved up its own ass. What could go wrong?  

Market Masturbation

U.S. Markets Are Partying Alone At New All Time Highs...

The Dow of course gets all of the headlines since it has now eclipsed its 2007 all time high. The S&P 500 is a few points away from its all time high from that same year. So U.S. bulls are once again getting themselves all lubed up. Unfortunately, the rest of the world never joined the party, so this is all just one more big con job for the Idiocratic masses. As we see, most other world markets are nowhere near their all time highs...

Redemption (Song)

All I Ever Have...

Plausible Deniability: Opiate of the Masses

There is a fine line between objectivity and lack of judgement. I don't even attempt to walk that line. As a blogger who scorns the general lack of objectivity in the financial press, I am a hypocrite, because I am not the least bit objective. I consider this blog as a public service announcement from someone who has no vested financial interest in the direction of the market. Do I bet on the market, sure. But I can bet any way I want. I don't make money by telling other people what they should with theirs...

Yet Another Extinct Species: Realists

Today we learned that the Investor's Intelligence Survey shows the number of bears at a two year low. Central Banks have systematically hunted bears into extinction, even as macro risks have grown continuously in the background. It took three months of near straight up action, but now even the most reluctant money managers are finally capitulating. So don't be surprised that everyone is cheerleading the markets at this juncture, because there are few prognosticators who are not bought in...

Red line below is bearish percentage...

[Source: schaeffersresearch.com]

The Only Inflation is in Pure Bullshit

Nine out of ten financial pundits today are still worried about inflation.  They assume that the money supply will grow indefinitely until it leads to out-of-control hyperinflation. They ignore the fact that their own greed-addled brethren already outsourced the middle class and that all of the additional money is made available only to speculators to inflate asset prices. None of it makes its way into the real economy. You would think that after four years of zero interest rates, they would have figured that out by now, which only reveals the callous and fatal depth of their disconnect from economic reality...

Assumptions

All societies live and die by their assumptions. This one will be no different. The default assumption of this current Ponzi economic model is that the human population can continue growing and wasting egregious amounts of natural resources, with no dire consequence to the human race. Unfortunately, below we see just the latest overwhelming proof that this is wishful thinking of the highest order. So while I am sickened to realize the extent to which the human race has desecrated this planet, I console myself with knowing that the consumption-oriented lifestyle driving this dramatic increase in pollution (including carbon), is itself premised upon false and unsustainable assumptions...

Greed and Kapitalism

Why is it that when the market was at its low after Lehman in March 2009, no one wanted to own stocks. Yet, now four years later, no one can think of a reason not to own them, even though today's rumour was that North Korea is now preparing for war with the South...The Dow was up 67 points on the news - yet another all time high (yes, we also got news of fewer jobs outsourced this month than last month...). 

Pure blinding greed, that's all. Nothing more, nothing less. So if people are not acting particularly rationally at this juncture, we have to take into account the fact that they are guzzling the Kool-Aid by the barrel full...

Vertical Takeoff and "Landing"

People reading this blog think "this guy writes the same fucking thing every day!".  That's right - global policy-makers propagate the same asinine policies every day, and then I point out how ludicrous they are, every day. The beatings will continue until morale improves...

Just today we learned that North Korea threatened the U.S. with a pre-emptive nuclear attack. The Dow reached a new all time high on the news...

Something Wicked This Way Comes

No surprise, Obama's election, re-election, the "economy", and latent calls for gun control are all factors that have been a boon for "militia" group recruitment. Some take exception with the criteria by which these "clubs" are branded as militias. That's not the point, the point is that there is a clear rallying cry for these groups to galvanize around, and unless the definition of a "militia" has changed in the meantime, the current set of circumstances is having a major impact on affiliation i.e. a 10x increase since 2008. Apparently when Bush was in power, the militia-inclined deemed their country to be safe, even though they were being sold into slavery the entire time...(I don't know where they got that picture of Freddy Krueger with an M1 carbine).  Full article here...

Lord of the Flies

This society is Lord of the Flies writ large. The adults left the building a long time ago and their infantile descendants have taken over the planet. We need not wonder why the developed nations turned their backs on the abject poor in the rest of the world, when they don't even take care of their own...

The Silence of the Lambs

Yesterday we learned that there are more billionaires than ever - 10x as many as 1987. The gap between the ultra-wealthy and working poor has never been wider in the U.S. The "Atlas-like" CEOs of Ayn Rand lore take home a mere 244 times what the average American makes in a year - by far the biggest CEO pay gap in U.S. history. And today, not coincidentally, the Dow just hit a new all time high, eclipsing its last peak from 2007. All it took was $9 trillion in global Central Bank dopium, and $7 trillion in U.S. debt, to get the market back to a level that it first attained six years ago. As ZH points out, in the meantime a near doubling in the number of people on foodstamps, an 80% increase in the national debt, 5 million fewer jobs, none of which apparently matters when the Dow is at new highs..

Peak Greed

Robbed By a Bank
No surprise, following the hold-up of the middle class known as the bailout of 2008, subsequently, the middle class has become ever-more marginalized by the very same people they bailed out; meanwhile, the wealth of the ultra-rich has never been higher. Just today we learned that the number of global billionaires hit a new all time high...

The Band Played On...

Everything we are told now is pure propaganda, strictly to maintain appearances. The geriatric set have a death grip on the U.S. political system and the last thing they want is change. They are fully aware that the ship is keeled over and heading for the bottom, but they have convinced themselves that since they are on the upper decks, that the water line won't get to them, in their lifetime...

Bernankenstein's Boomerang

Don't Try Buy This At Home...
The mother of all ultra-bearish rising wedges, with an overthrow above the top trendline to get the bulls lathered up. As we see, the market is keenly aware of that upper trend line which it tested earlier this week. If you read the linked description of a rising wedge, this one meets all of the listed criteria. The most wicked aspect of a rising wedge, is that it gives the appearance of an uptrend, even though the upper trend line is not keeping pace with the lower trend line, requiring bulls to defend the same price levels over and over again, exhausting buying power on the way up, as evidenced by the declining volume. Compare the rally from 2003-2007 to this one. That one was a smooth uptrend with relatively little overlap between uptrend segments. This rally by contrast has been a lurching affair, as the market junky halted periodically to vomit all over itself, waiting for its next hit of monetary dopium. The HFT bots will see to it that Bernankenstein gets his boomerang back sooner than expected...

Wilshire 5000 (U.S.) Total Market Index

Extreme Event Risk

The amount of complacency at this juncture, is staggering. The Idiocracy at large have literally been stewed in their own juices. Whereas the "fiscal cliff" debacle just 8 weeks ago was cause for non-stop angst and hand wringing, including a week long market sell-off leading up to the event, today, the fiscal "sequester" went into effect, which includes an automatic reduction in U.S. government spending equating to apparently .6% of the economy. Yet, it was completely ignored even though fourth quarter GDP growth was a mere .1% (recently revised from negative .1%). And on top of the sequester cuts, the impact of the recent tax increases resulting from the fiscal cliff clusterfuck-o-rama have yet to be factored into GDP...

A Jedi Mind Trick For The Idiocracy

Central Bank Programs and American Idol Merely Conceal the Burgeoning Collapse...
Central Banks across the developed world have been attempting to use monetary liquidity to prevent the inevitable convergence of our standard of living with that of the Third World. Of course it's a futile task and suffice to say, that adjustment would have already taken place after 2008 if they hadn't intervened to prop up asset markets. Unfortunately, once the developed nations took the easy path of trading with countries that have no labour or environmental standards, the (downward) convergence in standards of living became inevitable. It didn't help that the developing nations suppressed their own currencies and otherwise recycled their profits back into developed world debt in order to sustain their competitive advantage, however artificially. All that strategy did was to temporarily subsidize our lifestyle gap while our nations' debt balances accumulated steadily. Of course, this strategy of using Central Banks to levitate the financial assets, even as workers and consumers fell ever further behind the solvency curve was a fool's errand of the highest order. It had no chance of ever fundamentally rebuilding the economy, much less generating inflation. All the money flowed straight into the stock market.

At this juncture it's important to see past all of these Central Bank interventions that are merely sound and fury signifying nothing. When viewed in the context of the long-term trend in wages and core inflation, it's overwhelmingly clear that Central Banks lost the real battle a long time ago...

Keeping Up With the Dow Jones's

EWI pointed out last night that the Dow made a new multi-year high of 14,100 yesterday - the highest level going back to 2007, albeit still slightly under that year's high of 14,200. The high was unconfirmed by all of the other major U.S. indexes. Apparently, at the last major top in 2011, the same situation occurred - the Dow was the last index to top out. So, to recap the current set-up, the Nasdaq outperformed through last September, then the Russell 2000 small cap took over and outperformed until last week, now the Dow is leading...This article said the exact same thing yesterday, that large cap dividend paying stocks (i.e. the safest) are now outperforming the rest of the market. Which means only one thing - that all other asset classes are exhausted, so investors are clinging to the least risky risk asset left - dividend stocks...

"Greedometer" flashing red (7900 out of 8000)

Meanwhile, from a guy named "Jeff Seymour" who has been studying all of the various factors that lead to market crashes, his "Greedometer" is flashing red. His factors are: the Vix, the economic leading indicators (WLI), insider selling, profit margins, # of selling climaxes (new highs/reversals), advisor sentiment, margin debt, and the put/call ratio. The maximum possible reading is 8000 and the index is currently at 7900 - the same level it hit in 2007. The bottom line is that contrary to CNBS and all of the other infotaintment spewers, there is no new bull market underway, just a new market for bullshit...Full story here.

Maximum Greed: History Will Not Be Impressed

Today Sheila Bair, a Republican and former chairwoman of the FDIC, penned her own albeit meek diatribe against crony capitalism (below). Upon reading it, I was left with only one question that apologists for "the system" that allowed greed to be taken to its full self-cannnibalizing extent, will be held to account for on the other side of this fiasco i.e. was this inevitable? Was it inevitable that the American middle class would be eventually marginalized into oblivion to the point of being derided as "socialist" for accepting food stamps to feed their children? Because if it wasn't inevitable, then the beneficiaries of this catastrophe need to cough up their ill gotten gains from pursuing the rent seeking "activities" that led the U.S. to this  economic dead end. If it was on the other hand inevitable, then capitalism itself has a lot to explain, as to whether any sane nation would want to pursue this model. And suffice to say, it would be a hell of a lot easier for the Lost Boys of the Idiocracy to defend their deluded fantasy that the country's economic malaise is due to the laziness at the bottom, if it wasn't for the fact that corporate profits as a % of GDP are at a 70 year high and wages as a % of GDP are at a 70 year low, and there is a distribution of wealth that would make John D. Rockefeller blush. Of all the "unsustainable" aspects of this Ponzi model, nothing is more unsustainable than these historically enormous profit margins, something Wall Street is going to learn the hard way. And I've heard some dunces on the right call food stamps a social program. Allow me to clarify - a social program gives people the comfort of knowing that their country is looking out for them. Food stamps by contrast, are merely tokens to keep the heavily armed and increasingly enraged masses at bay long enough for the wealthy to make alternative living arrangements...

The Last Pump and Dump

Heavy Distribution - A Net Month's Worth of Selling Already...
Whatever conviction the market lacked on the upside, it is already more than making up for on the downside. Look at the lower volume pane where four up days with volumes below 100 million, including Feb. 12th's insanely low 65 million, have now been offset by four down days with volumes above 150 million, culminating in today's 245 million. As of today, total down volume exceeds total up volume on a daily cumulative basis going back to January 22nd - despite a ratio of 14:10 up versus down days. So even though it has only been four days since the market made a six year high going back to 2007, we've already seen a month's worth of selling camouflaged by the fact that the market rose more on its up days than it fell on its down days despite volume being higher on the down days. That's what professional traders politely refer to as "distribution" aka. institutional investors unloading large amounts of stock onto small investors after a big run-up...

Ceteris Non Paribus: Everything Is Not Equal...

Ceteris Paribus: Latin for "all else being equal". What it really means, in the context of an economics lesson, is that there are millions of variables, but ignore all of them except for these two... At that point, any independent thinker hunkers down for an hour lecture consisting of being showered with assumptions-based bullshit. Likewise, when our esteemed econo-leaders such as Paul Krugman speak with certainty about uncertain things, any amount of humility would require them to admit that there are an unknown number of factors that affect the global economy...

Living Large In the Third World

No developed country has greater concentration of income and wealth and yet constantly derides its working class as moochers and "takers", as the U.S. I can tell you how it works in the other developed countries, because I've lived in a few - no overfed RomneyBot at the top would dare disparage the working class and be fully intact by the end of the day much less run for office. People know who does the dirty work in the real economy. The days when the vulture capitalists can milk the U.S. middle class with impunity, are coming to an end...

http://en.wikipedia.org/wiki/Gini_coefficient

Buried Alive By The Globalized Ponzi

While we wait for this lurching clusterfuck, euphemistically called the "globalized economy", to collapse in on itself like a cheap tent, below I recapped the central themes of this blog. When the Idiocracy catapults itself into the brick wall known as reality yet again, my days of blogging will be over. Soon, even the Captains of the Idiocracy will be forced to acknowledge the overwhelming disaster they have created, at which point the only place they will be safe will be Antarctica...

A Village of Idiots

As we would expect at this juncture, the self-nominated "best and brightest" are providing great spectacle with their war of words and infotainment, all while the real risks simmer in the background, wholly unnoticed by the Idiocracy and the mental midgets running the U.S. and global economy. The latest diversion from reality, is a feud between Paul Krugman and Joe Scarborough that started when Krugman stated on "Morning Joe" that the Social Security\Medicare crisis should be ignored until the day the programs collapse around 2025. Brilliant !  Milk the system for all it's worth and then bury the grandchildren under a mountain of debt ! How did we get so lucky to have this kind of thought leadership?

The New Wall Street: Lipstick on a Pig...

I spent the evening in the local mega-bookstore. In additional to learning about every other subject under the sun, I searched high and low for any confirmation that the global economy was in the least bit of jeopardy. I found scant evidence that there is the least bit to be concerned about. Apparently, everything that wasn't done after 2008, is still working out just fine. Oh right, until I came across this article in The Atlantic informing us that Wall Street is doing the exact same things, only under a different name...

Peak Irresponsibility

I'm reading some pretty fucked up and mostly mutually conflicting global disaster "theories" these days. The wheels of motion are spinning so fast across their multitude of axes, that everyone and their dog who isn't fixated on American Idol is now grasping for theories as to how, why and when this entire shit show is going to come flying apart...

Europe Leading The Way Down (Again)

Macro Economic Collapse

Of course my over-arching premise is one of inevitable economic collapse - now occurring in real-time, albeit entirely ignored by the lamestream media and policy-makers; a collapse merely delayed and obscured by HFT bots using cheap leverage supplied by Central Banks attempting to levitate global asset markets with a valuation north of $200 trillion, indefinitely. Just yesterday, Walmart, grand purveyor of cheap junk, indicated that monthly sales for February are off to the worst start since "2006". They blamed the shortfall on the payroll tax increase which reduced pay by $15 per week for a worker making $40k/year. Suffice to say that if the solvency of the economy can be impacted by a $15 pay reduction, then this system is not what we might call systemically resilient. We used to say that the average American was one paycheck away from bankruptcy, now it appears they are one work hour away...

Volume Collapse

Recently, I showed several posts indicating that as we would expect in a dying bull market, stock market volumes are dwindling to nothing as real buyers are pushed out of the market due to 1) over-valuation 2) recurring short squeezes 3) depleted capital, as mutual fund cash balances reach multi-year lows.

Portends Market Collapse...

Pampered Fucking Pricks

This society is overrun by pampered, entitled fucking pricks. So much so, that we have all just gotten used to dealing with them. Every day we come into contact with these over demanding assholes, yet we just put up with it, because apparently societal order would collapse if we didn't have an entrenched hierarchy, no matter how phony or superficial. This is one of the most egregious aspects of any Ponzi Scheme - the fact that it pushes the worst people to the very top, facilitated by their sociopathic ability to control, manipulate and otherwise do whatever it takes to fuck everyone else over on their way up the ladder...

We've Seen This Movie Before, We Know How It Ends...

I just read a technically oriented financial pundit who was asked if this was a triple top. She quickly dismissed the idea, on the basis that such a formation would imply a next move that would take the S&P 500 below the 666 low of March 2009. In other words, it could be, but since such an event is unthinkable, it can't be...that's the thought process of the Idiocracy in a nutshell at this juncture.

Even on this very long-term chart, the latest spike to a high is vertically ludicrous. And for Macleans (Canada's version of Time magazine) to tell us this week that now is a great time to buy stocks, is beyond insane. We see how well buying at these levels worked out the last two times. In fact I lost a chunk of change of my own atop that first spike back in 2000. All I thought afterwards, was what a fucking chump. How did I not see that coming. Of course the signs of unsustainable excess at that time were lined up the same as they are now. So the real question on the table at this juncture, for the "buy now"/new bull market dunces - who is going to stump the next $8 trillion of combined fiscal and monetary stimulus that it took to levitate global markets this far?

Only At The Top

And from my home country, no less. This will be the gift that keeps on giving for the dunces who wrote this timely story...

h/t: Elliot Wave International (STU: Feb. 13, 2013)

Congestive Market Failure

[Updated February 12th, 2013]

Recently I showed that stock market volumes have fallen in half since 2008. Seventy percent of the remaining volume is now accounted for by HFT Bots churning on millisecond boundaries. Now, just in the past couple of days, volumes on the most actively traded market ETFs (SPY, QQQ), have fallen in half again, relative to their 90 day moving averages.  Yesterday, I showed that SPY volume was lower (on an hourly basis) than Christmas Eve which was a half day of trading. Today's volume was even lower at 64 million, which is 57% lower than Dec. 24th volume, on an hourly basis. 

Contrast these collapsing volumes with the daily pollyanna bullshit being spewed by the lamestream business media. Conviction, in market terms, is measured by volume, and by that objective standard this Central Bank levitated market has a quarter of the conviction towards this bogus economy as it did at the prior top in 2007. In what will be history's largest pump and dump, these prices we see now on ludicrously low and manipulated volumes are merely an illusion. These will not be the prices obtained by motivated sellers all trying to get out the same door at the same time as HFT Bots conveniently decide they don't want to be on the other side of the market anymore...

SPY (S&P 500 ETF, Volumes):

Fool's Gold

The arguments to own gold right now are so intuitively obvious that one feels a fool not to own it. In past history, there has never been a case where "money printing" didn't eventually lead to runaway inflation.

Unfortunately, for the gold thesis, we don't have an economy based on cash, we have an economy based on debt...