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  • Scrambling to avoid the great evaporation

    The CBs have created enormous mountains of debt masquerading as money / wealth. The holders of this debt can see a mass-default looming. They are trying to exit the bubble before their debt instrument loses value. They have no faith in sovereign debt. They have little faith in corporate debt. They buy shares in companies even though earnings are miserable.
    "In June 2007, reported LTM earnings for the S&P 500 was posted at $85 per share. That would mean that earnings have grown at the tepid rate of 2.1% per annum for the last 10-years; and those are nominal dollars.

    Take out inflation and share buybacks and there’s essentially no gain at all on a peak-to-peak basis."
    "Under a regime of honest money and price discovery, the stock market discounts the future. There is no plausible future from here that’s worth 24 times S&P 500 value or 96 times the Russell 2000."
    "Margins on debt has again reached an all-time high of $550 billion. The chart below leaves little doubt as to what comes next. After the 2000 peak, margin debt collapsed by 50% as stocks were violently liquidated to meet margin calls. All this while in 2008 the shrinkage of margin debt was even larger – nearly 60%. This time, however, a similar shrinkage would cause a $325 billion decline in margin balances. That’s a lot of stocks on a fire sale."

    All this "wealth" is searching for protection from deflationary forces. In financial circles, there is NO mention of wage deflation. The working class has been struck down by wage deflation. The upper loop is shukin and jivin that productivity must be raised. They lament the loss of profit margins. They cry for more efficiency and "more competitive" wage structures. The non-producer class tries to stay insulated from the problems of the larger producer class.
    The wage base crashes and consumption crashes. Huge infusions of credit to unqualified borrowers is seen as the cure. The CBs print boatloads of "money" to compensate for falling wages and falling spending power.
    They admit that it doesn't work but, QE and ZIRP are the only tools they have.
    The CBs and the private banks are creating tons of pixelated "money". The upper loop of the economy doesn’t actually produce any tangible wealth so, it must take tangibles from the lower loop.
    The numbers look increasingly bad. Those with money are starting to look away from stocks. Currently, they are looking at cryptocurrencies. Everybody wants to avoid the 'great evaporation".
    Last edited by Danny B; 08-17-2017, 01:39 AM. Reason: spellling


    • The fallout from the battle between globalism and nationalism

      I spent a week in the north woods. When I come back, things have accelerated downward. I have to write on social systems because of their enormous effect on economic systems. Globalism is a socialist construct with a fascist control structure. The chosenites have always pushed socialism no matter how often it fails. Globalism is seen as the central control structure that they must create to control the world. Globalism, so far, has only benefited six States. It is already perceived as a failed system. This will be an important perception as the battles grow worse.
      Top Institutions and Economists Now Say Globalization Increases Inequality

      George Soros will probably get what he wants.

      I can't leave out Kunstler, Diminishing Returns - Kunstler

      The game plan has been around for a long time. 22 Key Goals Of Zionist Communism In America
      "Communist Goals (1963) Congressional Record--Appendix, pp. A34-A35 January 10, 1963

      Current Communist Goals EXTENSION OF REMARKS OF HON. A. S. HERLONG, JR. OF FLORIDA IN THE HOUSE OF REPRESENTATIVES Thursday, January 10, 1963 ."

      Charles Hugh Smith, oftwominds-Charles Hugh Smith: Are We Fiddling While Rome Burns?
      Structured criticality,


      • Armstrong and 2020

        Rogoff, "He is telling the central banks that the next recession they will have to resort to negative interest rates and they should prepare now. Despite the fact that negative rates have failed to work in Europe or Japan, seems to be nothing to really consider. So what after almost 10 years of failed policies at the European Central Bank, it will eventually work maybe in 12 or 13 years?"
        "The academics never get called into real world problems. They have zero experience. Government calls upon them because the politicians also have no experience."
        "These policies of negative interest rates have created a Pension Crisis on the horizon and wiped out so many states, provinces, cities, and municipalities. This policy is one-dimensional and only looks at demand and how to force people to spend."

        Here is a picture of Slick Willie and the bankers destroying Glass-Steagall.
        This was the one major step that got us to where we are today.
        "There is no appreciable risk management that comprehend cycles and each crisis is typically set in motion by the solutions applied to solve the previous crisis. This is the true over-arching issue that is never considered because those applying the solution lack any comprehension of the dynamics of the economy as a whole."
        "So while banks are “too big to fail” and “too big to jail”, government is not “too big to fail” since they depend upon people buying the debt which never ends"
        "but they are not exempt from revolution be it non-violent or violent as history proves"

        "Jennifer Lawrence is at least addressing the middle ground but nobody seems to listen. Trust me, then you will see serious violence in the streets during 2020. I would not go near any city hosting the Democrats or Republicans in 2020. I will tell you now – stay far away."
        "Mr. Armstrong; You said that this civil unrest will continue to escalate and that the left is attempting to just suspend government until 2020.":
        "This is why the violence will continue and escalate into some very bloody events going into 2020."


        • Debt ceiling and infighting

          Everybody has written about the fast approaching debt-ceiling battle. As it gets closer, there is more focus and hints.
          "Trump tweeted what appears to be a warning that the debt-ceiling process is setting up for failure, saying he had requested that Mitch McConnell and Paul Ryan tie the debt ceiling legislation into the V.A. Bill (which passed), adding that they did not do it, and as a result we "now have a big deal "

          "Trump now admits will be a debt-ceiling "mess" has begun, as has the scapegoating, and in Trump's view the blame will, or should, ultimately fall on Congressional Republican leadership in the face of McConnell and Ryan. While it is unlikely that Trump's latest escalation will accelerate a compromise, it virtually guarantees that the feud between the republican controlled Congress and the President will escalate further, effectively making either a debt-ceiling or government shutdown crisis increasingly likely. "
          Trump Warns Of Debt Ceiling "Mess"; Blames McConnell, Ryan | Zero Hedge

          "Goldman’s crew in the current White House – Gary Cohn, Steve Mnuchin, Dina Powell and Jared Kushner – are likely to bring about the final destruction of the Trump presidency. The cast of characters will eventually trigger a thundering collapse in the markets which will finally crush Goldman Sachs and its posse of gamblers and crony capitalist.

          In the coming battles over crucial economic issues surrounding the debt ceiling, tax reform and healthcare, Trump will be getting the worst advice imaginable. The Donald will be pushed into attempting to make “bipartisan” deals that will blow the tenuous GOP majorities to smithereens"
          "Right after Labor Day the destructive game plan of the Goldman Regency will show up in battles over a “clean” debt ceiling. "
          " The Freedom Caucus and the vast majority of conservative leaning congressional Republicans will jump ship.

          Washington is heading for weeks of fraught indecision, backroom maneuvering and contentious political in-fighting that will scare the Wall Street casino that it is stuck in complacency.

          The fact is that the market is breaking down beneath the shrinking number of Big Cap stocks and levitating averages. This has all set-up a severe downside shock within the coming weeks."
          "But the RUT (Russell) is now 6.5% below its July 25 high of 1450, and, more importantly, has now plunged below its 200 displaced moving average"
          "The robo-machines and day-traders have not simply been voting for Trump and an incipient economic and profits boom. What they’ve been doing is chasing the index up a nearly 30% incline between early November 2016 and the July 25 peak"
          "Now they are now stranded in the nosebleed section of the outfield bleachers."
          "It is only a matter of time before Wall Street gamblers discover they are home alone on the earnings front. All this while gridlock in Washington will intensify suddenly and dramatically. The Treasury’s cash balance is now down to $82 billion, and at its current $2 billion burn rate per calendar day it will be gone by the end of September."
          "This means that Congress will have just days to reach a compromise on the debt ceiling when it returns from recess. But this will not be the Congress of September 2008 that rolled-over to pass the bailout TARP bill at the insistence of Secretary Paulson. This time Goldman’s bag-man will be told “no dice.”

          After all, the Dems now have a President to hound from office and the Freedom Caucus will not again be intimidated by Wall Street into obeisance. Expect a full throated war between Washington, Wall Street and the establishment that is attempting to overturn the 2016 election"
          David Stockman On America's Goldman Sachs Regency | Zero Hedge
          SO, the markets have rolled over about 6% even with all the cash infusions from the plunge protection team.

          The inner cities will be the battlefield, America's Inner Cities Are In Chaos... Just Look At Baltimore & Chicago | Zero Hedge
          Baltimore is a case study where nobody takes responsibility and, nobody gets an education.
          "In grades three through eight, 41 percent of students passed the English test, while only a third passed the math assessment. "
          Less than half of Maryland students pass English, math assessments - Baltimore Sun
          The liberals seem to think that;if you throw enough money at ANY problem, that will fix it.


          • Who gets the blame?,,,CB buying the entire economy

            Trump is no dummy and, everybody is jockeying for position so they won't be blamed for a shutdown of GOV.
            "For the first time in over 100 years, the DOW gained 4,000 points over the course of 200 working days. That’s 4,000 points since Trump was elected, so it’s easy to draw a connection between the stock market’s dizzying new heights and Trump’s ascent to the White House.

            But Trump’s supporters shouldn’t really celebrate that, because there’s no way that this can last. It’s been pointed out many times before that Trump is being set up for the inevitable crash of our economy."
            "The elites simply can’t wait to pull the plug on the many financial bubbles that are haunting our economy. If they do it now, they’ll walk away with a lot of money while Trump is left with all the blame"
            "Of course, a financial crash won’t look so bad for Trump if it comes out of nowhere. What the elites really need is a financial crash that can be easily pinned on the President, and it appears that they may finally have it."

            "You may recall that Trump recently said that he will veto the next spending bill that’s due in September, if the Senate and Congress don’t include funding for his border wall. He basically threatened to cause a government shutdown if the Democrats don’t cooperate with him."
            "But if he causes a government shut down in the process, it could trigger the next financial crisis, and lead to the demise of his presidency. And the people who turned out economy into a casino will walk away without receiving any blame."
            This Is How Trump Is Going To Be Blamed For The Next Financial Crash | Zero Hedge
            if he takes the credit for the highs, he will be blaming the deep state/Republcans/Democrats/etc for standing in his way when the collapse comes. He can say it all would have stayed good if only they had not got in his way
            Trump just needs to start saying, "If they don't pass this spending bill, They are going to crash the markets, its horrible people, horrible.".
            Trump's his own worst enemy. If he had any balls he would have pointed out what a charade the markets are and given himself some cover before they collapse again
            He knows the game that's being played and won't let them be the only ones crafting the narrative. This is why he is still doing rallies also. He is building a militia, an army of sorts. But most won't be called to take up arms, they will be called to other things when the time comes, and many will answer. Some of you all still don't get it, this isn't even really about Pres Trump, it's something much bigger.

            No. Sometimes Timing is everything.
            Wait until it happens, and then blame the (((Fed))).
            The Public support for ending the Fed will be at its peak then.
            "Markets won't crash because of the Federal Reserve buying stocks and bonds!!
            August 24, 2015 the Fed outed their covert stock buying program and went on a stock buying binge and reversed a -500 point drop in just 15 minutes!! Who else is powerful enough to do that ??"
            This is a whole nother issue.

            " Without any recession or crisis, major central banks are purchasing more than $200 billion a month in government and private debt, led by the ECB and the Bank of Japan.
            The Federal Reserve owns more than 14% of the US total public debt.
            The ECB and BOJ balance sheets exceed 35% and 70% of their GDP.
            The Bank of Japan is now a top 10 shareholder in 90% of the Nikkei.
            The ECB owns 9.2% of the European corporate bond market and more than 10% of the main European countries’ total sovereign debt.
            The Bank of England owns between 25% and 30% of the UK’s sovereign debt."
            " As such, productivity growth collapses, real wages fall and purchasing power of currencies fall, driving the real cost of living up and debt to grow more than real GDP. That is why, as we have shown in previous articles, total debt has soared to 325% of GDP "

            "The central bank can “print” all the money it wants and the government benefits from it, but the ones that suffer financial repression are the rest. By generating subsequent financial crises through loose monetary policies and always being the main beneficiary of the boom, and the bust, the public sector comes out from these crises more powerful and more indebted"
            "No wonder that government spending to GDP is now almost 40% in the OECD and rising, the tax burden is at all-time highs and public debt soars.

            Monetization is a perfect system to nationalize the economy passing all the risks of excess spending and imbalances to taxpayers. And it always ends badly. Because two plus two does not equal twenty-two. As we tax the productive to perpetuate and subsidize the unproductive, the impact on purchasing power and wealth destruction is exponential."

            We are in a whole new world where the State tries to buy up the economy to keep it from crashing. Stay tuned !


            • CBs buy everything to avert meteor storm

              When the economy withered away for lack of wages, the CBs jumped in and bought everything in sight.
              "Recently, the Official Monetary and Financial Institutions Forum think-tank revealed that global central banks have speculated with $29 trillion (£23 trillion) in global markets, including stock markets."
              "I may have been absent that day but since when were central banks given discretion to trade and speculate to such an extreme?"
              "the Federal Reserve doesn’t look in good shape either. The toxic assets it has bought remain under wraps and it has helped to create a false financial environment. Its 0% interest rate policy has flooded the planet. Cheap dollars have funded bad investments"
              The wet-ink money never flowed into wages. If 70% of the economy is the consumer-economy AND consumption has crashed, the money flowed into mal-investment.
              "Too big to fail, jail, bail or prosecute is simply too big to exist. Unregulated, systemic banking fraud, a lack of enforcement and failure to properly manage counterparty risk will soon cause the next collapse. "
              "relatively speaking, the risk is 40% bigger than it was in 2008, bigger institutions, bigger transgressions, bigger fines. And this time, the central banks want a slice of the pie, making this an exponentially larger feeding frenzy that can only end with indigestion. "

              "Business-cycle recessions are not just inevitable, they are necessary to flush bad debt and marginal investments/projects from the system."
              "The next recession--which I suggested yesterday has just begun--will be more than a business-cycle downturn; it will be a devastating meteor storm that destroys huge chunks of the economy"
              CLARITY; The dynamic that's about to play out is simple: wages for the bottom 95% have gone nowhere for 17 years, while costs have soared far above official inflation for everyone exposed to real-world costs.
              We have filled the widening gap between stagnant household income and rising expenses with debt.

              "After eight long years of filling the widening gap with borrowed money, the jig is up: the returns on adding debt have diminished to zero"

              "When credit expansion stops, the effect is like a meteor storm: marginal borrowers and lenders crater, and every sector that depends on marginal borrowers and lenders for sales and profits also craters."
              "Here's total credit in the U.S.: up from $26 trillion 2000 to $66 trillion today."
              "Many of those about to be vaporized did not grasp the fragility of the "prosperity" they assumed was both solid and permanent. The difference between earned income and sales derived from earned income and debt-based income and debt-based sales is about to become painfully clear: the coming financial meteor strike will vaporize debt-based activity and leave whatever isn't dependent on debt relatively unscathed."
              oftwominds-Charles Hugh Smith: Next Stop, Recession: The Financial Meteor Storm Is Headed Our Way


              • Trials and tribulations of Bitcoin

                Here are a bunch of links on the attempts to control and tax BTC.
                "With more assets pouring into digital currencies, the federal government, via the Internal Revenue Service, is looking to get its fair share from Bitcoin -- a cut that the IRS doesn't believe it's been getting until now.

                That could change, and fast, as the IRS is using a software program that monitors Bitcoin-based digital addresses, in a campaign to identify potential tax evaders."

                " I read a New York Times article about how people are getting their identities stolen via their phone number.

                The one thing all these people had in common? They were vocal on social media about investing in bitcoin. They got hacked—and their bitcoins disappeared. In some cases, seven figures’ worth."
                Hackers, Bitcoins & Fleas | RiskHedge

                "In each of the recent market “shocks,” it’s true that the price of gold saw an uptick. But here’s the kicker…

                Bitcoin rose radically higher. (Other cryptocurrencies are seeing even better results.)"
                "but the anonymity is by no means perfect. Security experts call it pseudonymous privacy, like writing books under a nom de plume. You can preserve your privacy as long as the pseudonym is not linked to you. But as soon as somebody makes the link to one of your anonymous books, the ruse is revealed. Your entire writing history under your pseudonym becomes public. Similarly, as soon as your personal details are linked to your Bitcoin address, your purchase history is revealed too."


                • hack proof,,,, gold

                  The main alternative store-of-value to cryptocurrencies is gold.
                  "The different rates of increase between above-ground gold stocks and the fiat money quantities of unbacked state-issued currencies is what ultimately drives the price of gold measured in those unbacked currencies. It is easy to see why a higher gold price, reaffirming gold’s role as sound money at a time of excessive fiat currency inflation, is viewed by the major monetary authorities as a potential threat to their currencies’ credibility."
                  "However, gold remains centre-stage as a global hedge against the decline in purchasing power of fiat currencies. "

                  "It depends on the government concerned accepting that gold is superior money to its own currency, owning sufficient physical gold reserves to convince the markets, and the gold price being at a level where the arrangement sticks. There is no doubt that China, Russia, as well as the other SCO member states and their populations regard gold as a superior money to fiat currencies,"
                  " The monetary authorities of these countries (the West), with a few exceptions, also do not regard gold as having any monetary role at all, beyond paying lip-service to a vague concept it has value as an asset which is no one else’s liability.

                  Therefore, understanding the role of gold and the protection it can offer fiat currencies is split into two geographic camps: the governments of Asia which are actively accumulating, or would like to accumulate additional reserves of monetary gold, and the governments of North America and Western Europe which see the gold price as irrelevant from the monetary point of view."

                  The gold-bug States have a far higher population and productivity than the West. Japan is technically in the East but, they seem to like gold too.
                  Japan Sees Surge In Gold Smuggling As Yakuza & Wealthy Chinese Team Up | Zero Hedge

                  Where does that leave the West? Goldman Sachs never wants to be on the wrong side of a trade.
                  "London metals trader Andrew Maguire tells King World News today that the gold price suppression cartel is splitting, that Goldman Sachs and two other bullion banks have allied with China and are going long, and that Indian gold buying is strong"
                  "James G. Rickards, who has enjoyed U.S. government security clearance, asserted yesterday that the U.S. government is likely to join with other major governments and officially revalue gold to $10,000 per ounce by the end of the year:"
                  Sounds strange but, these are strange times.
                  Maguire sees gold cartel splitting; Rickards predicts revaluation by year-end | Gold Anti-Trust Action Committee

                  Rickards mention that Sept. 29 will bring a big problem.
                  ""The first is the debt ceiling. This has to deal with the borrowing authority of the U.S Treasury and to be able to pay the bills of the government.”
                  The second event converging is the budget. The budget is the authorization of government spending. September 29th, that is the last Friday of the month and the last business day that operates on the fiscal year budget. There are two ways deal with the budget. One, Congress could vote and pass a budget. The other thing that can be done is a continuing resolution (CR) and it is a vote by Congress that agrees to agency spending and delays new spending to a later date.”

                  “This is important to note because it faces a hard-stop on September 29. The debt ceiling does not have to happen on the same date but because of the lack of Treasury funds it is very likely that by the end of September it could run out of money. That means there are two meteors striking in Washington with the budget and debt ceiling increase.
                  Hmmm, more meteors.
                  Rickards Fears September Meltdown - "1000 Point Drops, Or A Closed Exchange?" | Zero Hedge

                  Jim Willie, "The Petro-Dollar is showing numerous signs of being dead. The OPEC cartel is defunct, rendered a useless gaggle steeped in disunity. Enter the Eastern energy cartels to fill the void. The Russians are forming an effective Oil Consortium for supply. Iran is working to form a natural gas cartel, joined by Russia and Qatar. The implications are vast for both the USMilitary and the USDollar. The US global dominance will be cast aside, a process already underway. These energy cartels will assure the end of the USDollar as global currency reserve. They will also open the door for the Gold Standard in various forms."

                  "the growth of barter with possibilities at the local level for both silver/gold and services, the known bilateral barter examples like China with Iran, the coming Dual Universe of USDollar versus Chinese RMB in not too peaceful coexistence, and the advent of crypto currencies with block chain protections using encryption for security"
                  Banks and the IRS hate barter.
                  GOLDEN JACKASS.COM - The Golden Jackass Knows Gold, Currencies & Bonds"


                  • Busget battle and cash burn

                    A few facts on the debt ceiling.
                    “We’re going to get our wall,” Mr. Trump said at a rally in Phoenix. “If we have to close down our government, we’re building that wall.”
                    "It didn’t take long for Washington’s permanent political class to say “no dice” to the shutdown idea."
                    "Mr .. Ryan said he expected lawmakers would need to pass a short-term spending bill in September to give them more time to work out a broader budget agreement later this year."
                    OK, a continuing resolution.
                    "What has the GOP Congress been doing the last nine months that it hasn’t enacted into law a single one of the 12 annual appropriations bills? The same bills that would provide upwards of $1.1 trillion to run the Pentagon and the domestic agencies."
                    "The answer is simple. They’ve been deliberately burning up the clock in order to force spending measures through as emergency continuing resolutions (CRs) or 11th hour compromises to keep the government open. "
                    "Ryan’s first act as Speaker after succeeding John Boehner following the shutdown crisis of 2015was to pass the Boehner-Obama deal that suspended the national debt limit and empowered the Obama Treasury to borrow at will."
                    "Having already complicated the appropriations and Continuing Resolution, the Donald piled on more by suggesting GOP leadership had already screwed up raising the debt ceiling during the few days available when Congress returns from August recess. "
                    "The rank and file Republicans on Capitol Hill desperately fear being blamed for a shutdown. They have bound themselves as hostage to both the Fiscal Doomsday machine and the main street media’s need to safeguard Uncle Sam’s credit at all costs."
                    So, who has the most to lose?

                    “A government shutdown hurts Republicans—it’s the last thing I want,” said Rep. Trent Franks (R., Ariz.), a member of the House Freedom Caucus who was at Mr. Trump’s rally Tuesday. “It is a political liability of profound significance to us.”
                    "December deadline would be where the rubber could finally meet the road. That’s because there would need to be at least a $1.5 trillion debtceiling increase just to make it to December 2018 under current tax and spending policy."

                    "The Treasury will need to borrow $500 billionor more to replenish its depleted cash balances and to pay back the funds which allowed it to pay the bills since March 15. The Treasury will be running upwards of an $800 billionannualized cash deficit between now and December 2018.

                    Even with a $1.5 trillion interim debt ceiling increase, there still wouldn’t be room for a single dime of tax cuts "
                    It's Can-Kicking Time Again In The Imperial City | Zero Hedge
                    Apparently, the GOP has the most to lose. Keep in mind that U.S. debt would get downgraded in the event of a shutdown. That would kick up interest rates and really stress the system. So, while the Dems want to hold hostages and make the GOP look bad, how bad do they expect the collateral damage to be? Do they even care?

                    OK, so everybody is focused on the budget and debt ceiling. The low-lifers in congress have a very narrow focus and a very short attention span. What happens if some other major problems emerges at the same time as the budget & debt battle?

                    "collectively, US shale companies have lost cash in every year of their existence. The burned through cash when oil was $100 -- and again when it was $90, $80, $70, $60, $50, $40, and $30 a barrel. They burned through cash in 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016."
                    "If you’ve been in business for 9 years drilling wells that mostly run out in 3 years, and you haven’t managed to produce positive cash flow at any point along the way, then it's time to admit that your business model simply doesn’t work."
                    " But the fact that the industry makes huge accounting losses has not changed. It has burned up cash whether the oil price was at $100, as in 2014, or at about $50, as it was during the past three months.

                    The biggest 60 firms in aggregate have used up $9bn per quarter on average for the past five years.
                    As a result the industry has barely improved its finances despite raising $70bn of equity since 2014. Much of the new money got swallowed up by losses, so total debt remains high, at just over $200bn.
                    So, how long can they just burn through $ billions of cash without some kind of problem emerging?
                    Why The Shale Oil "Miracle" Is Becoming A "Debacle" | Zero Hedge


                    • The economic school of smoke and mirrors

                      For thousands of years the economy was pretty simple. It mostly consisted of physical goods. Barter was common and precious metals were the most valuable intermediary. Companies of variable capital were formed but, they were still shares in something tangible.
                      When bonds came along, they were just promissory notes based on future productivity or future taxes.
                      This is when the economy became more complex. Many schools of economic theories were created trying to reduce the economy to predictable bites. The early theories were very crude. They also suffered from periodic HUGE bouts of "noise" in the form of great wars. J. M. Keynes presented his economic theories and many people espoused them.
                      The State especially liked his theories because is put the State in charge.

                      His theories had huge flaws but, nobody could really pin them down. Along came Mises with theories that were a better fit but, the economists of the day didn't like them. We haven't had any great wars for several decades and the flaws in economic thinking are starting to pile up.
                      The economic forecasting profession is, for the most part, a hermetically sealed sounding board. They ALL agree that they are correct. The administrators of the Harvard endowment fund lost many millions of dollars in the 2008 crash,,,, much to their immense surprise.

                      The private sector is a different story. Rather than reading hoary old books, the investment managers are dealing day-to-day with huge capital flows. They are light-years ahead of the academics in their ivory towers.
                      UNFORTUNATELY, the State calls on academia for economic advice.

                      Armstrong, "The entire regulation (Dodd Frank) took aim at only the results and not the cause of the crash. Nobody seems to really understand just how significant the entire economy was altered when Clinton who was in the pocket of the bankers. By the time Clinton signed the Financial Services Modernization Act, commonly known as Gramm-Leach-Bliley, repealing the key components of Glass–Steagall in 1999, nobody on Capitol Hill understood. Not even Larry Summers, the father of negative interest rates, really understood what he was supporting."
                      But, But, they all went to very good schools.
                      8/27 Fed’s Powell says weak inflation is ‘kind of a mystery’ – CNBC

                      "I wrote a full report on how they altered the economy forever changing our banking system from Relationship Banking to Transactional Banking. The arguments how this would reduce risk for banks overturning the regulation of the Great Depression"
                      Ah yes. Reduced risk for banks and increased risks for everybody else.
                      "There is precious little that anyone seems to comprehend about the core structural changes the Clinton put in place."
                      "If Congress ever dared to look into a mirror they would see what they really are – a bunch of idiots and fools seeking to regulate the economy over which they never comprehend and they lack personal experience to even understand the subject matter.

                      The bankers argued that Glass-Steagall was holding them back. They were like a child who was asking their parent can they only eat cookies for dinner. The politicians had no idea they were altering the banking system for thousands of years ending Relationship Banking "
                      "Clinton changes 5,000 years of banks and gave birth of Transactional Banking where the bank suddenly didn’t care if you would repay your loan because they were selling it to someone else. They should show the movie the Big Short on Capitol Hill and then do a slide show geared for the 3 grade and force ALL politicians, and Yellen, to watch it. Maybe then they might understand what they have really done to the world economy and why economic growth today at 2% is considered a wild boom compared to 8% during the 1980s."
                      Last edited by Danny B; 08-27-2017, 07:51 PM. Reason: 1 more link


                      • Crash or not,,, Armstrong or Hussman

                        John Hussman is the best at making a case for the stock market being over-valued.
                        "This is the most dangerous and overvalued stock market on record — worse than 2007, worse than 2000, even worse than 1929."
                        " As of Friday, more than one-third of stocks are already below their 200-day moving averages.”

                        Don’t be fooled by the booming headline indexes. More NYSE stocks hit new 52-week lows last week than new 52-week highs, he notes."
                        "But he was, notably, also correct and prescient about both the 2000 and 2008 crashes before they happened, when few others were. "
                        "According to the World Bank, the total U.S. stock market is now valued at more than 150% of annual gross domestic product. That is way above historic norms, and about the same as it was at the market extreme of 2000."
                        This is the most overvalued stock market on record — even worse than 1929 - MarketWatch
                        OK, there are a dozen major indicators that show the stock market to be in nosebleed territory.
                        (Almost) every single indicator says that a crash is coming. The credit cycle has turned and things are moving down.
                        The banks are pulling their money out, Wall St Banks Sending Warning Signals… Investors Pull Billions In Longest Outflow Streak Since ’04… Worries Grow About Stock Market’s ‘Bad Breadth’… – InvestmentWatch
                        Goldman Sachs and a couple of other major banks are going "long" on gold.
                        Can the dollar break down without taking stocks with it?
                        The Single Most Important Chart in the World is Breaking Down | Zero Hedge

                        Armstrong makes a different claim. He is looking at ONE measurement.
                        "All we have been hearing since 2011 is how the stock market is going to crash and then there will be hyperinflation and all sorts of strange relationships that never materialize. They simply focus on the level of the stock market in nominal terms without adjusting it for inflation or showing how it has performed relative to the rest of the economy. Here is a chart of the stock market expressed as the total value of shares traded annually as a percent of GDP. Sorry, this illustrates that the retail market is not in crash mode just yet and it is still nowhere near the overbought levels of 2007."
                        What a bonehead. He picks the one measure that looks good.
                        "total value of shares traded annually as a percent of GDP"
                        The shares are NOT traded. $Trillions were bought up by CBs to inflate and support the market. They do NOT trade like most investors. They buy (with free money) and hold. THAT is why volatility is so low. The CBs don't need to make a profit. Their strategy masks the rest of the market.

                        "Real liquidity is HALF that of 2008 yet the ECB’s the Financial Market Liquidity Index is a complete fraud for it simply measures the spread between bid and ask and not the volume traded."
                        The $Trillions from the CBs just go into stocks and sit there. They don't add to market liquidity.

                        The high-yield ETFs don't have near the liquidity that they claim.


                        • Iliargi and Kunstler,,, controlled demolition

                          Now, the social side of the economy.
                          "Just a few days ago, ECB President Mario Draghi somehow managed to squeeze through his windpipe that “QE has made economies more resilient”. Even though everybody -well, everybody who’s not in Jackson Hole- knows that QE has blown huge bubbles in lots of asset classes and caused severe damage to savings and pensions, problems that will reverberate through economies for a long time and rip entire societies apart."
                          "No matter how much you earn, getting by is still a struggle for most people these days. 78% of full-time workers said they live paycheck to paycheck" "Moreover, talking about inflation without consumer spending, i.e. velocity of money, is empty rhetoric."
                          "The asset purchases serve to keep zombie firms -including banks- alive, which will come back to haunt economies -and central banks- when things start falling. The ultra low rates have driven individuals and institutions into ‘investments’ for which there has been no price discovery for a decade or more. Homes, stocks, you name it. Everyone and their pet hamster overborrowed and overpaid thanks to Bernanke, Yellen and Draghi, and their ‘policies’.

                          QE for banks didn’t just not work as advertized, it has dug a mile deep hole in real economies. No economy can properly function unless most people can afford to spend money. It’s lifeblood."

                          "Autor, Dorn, and Hanson found that in places where the number of factory jobs shrank, women were less likely to get married. They also tended to have fewer children, though the share of children born to unmarried parents, and living in poverty, grew. What was producing these trends, the researchers argue, was the rising number of men who could no longer provide in the ways they once did, making them less attractive as partners. "
                          "I talked to many people without jobs, men in particular, who said that dating, much less marrying or moving in with someone, was no longer a viable option: Who would take a chance on them if they couldn’t provide anything?"
                          "It describes a dying society. America is slowly dying, and not all that slowly for that matter. The Fed is comfortably holed up in Jackson Hole after having handed out trillions to bankers and lured millions of Americans into buying -or increasingly renting- properties that have become grossly overpriced due to its ZIRP policies, and congratulating itself on achieving “full employment”. "
                          "Yeah, I know, trickle down. But instead of wealth miraculously trickling down, it’s debt that miraculously trickles up. How many Americans have mortgages or rents to pay every month that gobble up 40-50% or more from their incomes? "
                          "But there will be no such recovery. As bad as things are for Americans today, they will get a whole lot worse. That is an inevitable consequence of the market distortion that QE has wrought: a gigantic financial crisis is coming. "

                          "Western IQs drop by 14 points in last century - 1.23 points per decade - attributed to women of higher intelligence are having fewer children"

                          Now, Kunstler.
                          "Or “money,” we should say, because the old definitions don’t fit so well anymore. It used to have a straightforward relationship with the work required to produce actual things of value, but those days are gone. “Money” nowadays is a byproduct of wishful analytics and computer legerdemain seasoned with generous measures of fraud and larceny. This is a big problem when everything is measured in money and it becomes quite impossible to state with assurance what the value of money actually is. Obviously, you end up not knowing the value of anything."

                          "one of their own making, and seems to be veering out of their control, and reputations are at stake. Their task at this year’s Jackson Hole confab is to maintain the appearance of confidence in their own rituals. But with a kicker.

                          That kicker is named T-r-u-m-p. This modern Balaam, riding the ass of the Deep State into wickedness, must be stopped, perhaps at all costs. "
                          "That was an offense to the grand viziers, for whom the elevated stock market valuations stood as the main testament to their power and wisdom. In fact, it was the only testament, and a rather flimsy one. More recently, though, the wicked Trump changed his tune and declared that the tower of stock market exaltation was his own doing, setting himself up for the revenge of the grand viziers."
                          "Since nothing else has worked so far to dislodge Trump from the White House, a tumbling tower of stocks might seal his fate. The tower has to fall anyway, lest the moiling masses of flyover America think about besetting Wall Street with pitchforks and torches. A controlled demolition might be just the thing to appease these suffering holders of three part-time jobs (if they are so lucky)"

                          " the wicked Trump will be left to the jackals of the Deep State, to be torn apart with the 25th Amendment."
                          "Trouble is, the “controlled” part of the demolition. Janet Yellen and the rest of the crew in their conical hats might want the markets to fall by a manageable ten or maybe even twenty percent. After all, they probably believe they can tweak them back up in another six months, like the last couple of times. But they can only pretend to calibrate that tumble, just as they pretend to regulate the employment numbers that supposedly represent the real economy of thing, activities, and people. What if the demolition gets out of hand?"

                          "What if the bond market, which is way bigger than the stock markets, catches the infection and goes kerblooey? What if congress, in its raging idiocy, shoots the credibility of the nation in the head by failing to raise the debt ceiling?

                          Things could get mighty complicated. The viziers know that the powers of the universe have a mysterious will of their own. Mostly, they have a will to re-balance the things of this world that have strayed from the accounting sheets of reality, namely the true prices of everything. And from that point the value of things may become visible again. Won’t that be a mighty moment?"
                          Controlled Demolition - Kunstler
                          Last edited by Danny B; 08-29-2017, 04:42 AM. Reason: grammar


                          • Originally posted by Danny B View Post
                            Armstrong makes a different claim. He is looking at ONE measurement.
                            "All we have been hearing since 2011 is how the stock market is going to crash and then there will be hyperinflation and all sorts of strange relationships that never materialize. They simply focus on the level of the stock market in nominal terms without adjusting it for inflation or showing how it has performed relative to the rest of the economy. Here is a chart of the stock market expressed as the total value of shares traded annually as a percent of GDP. Sorry, this illustrates that the retail market is not in crash mode just yet and it is still nowhere near the overbought levels of 2007."
                            What a bonehead. He picks the one measure that looks good.
                            "total value of shares traded annually as a percent of GDP"
                            The shares are NOT traded. $Trillions were bought up by CBs to inflate and support the market. They do NOT trade like most investors. They buy (with free money) and hold. THAT is why volatility is so low. The CBs don't need to make a profit. Their strategy masks the rest of the market.
                            First, Danny, Thanks for posting here. Know that you have a consistent follower in me, whether I post or not. By reading and condensing your sources for us you provide a much appreciated, valuable service. I, for one, don't have the drive to do this all for myself.

                            Now for the original reason for this post. When I looked at Armstrong's chart I was dismayed. His conclusion is an almost direct opposite to mine. It appears that the individual investor has abandoned the market. I remember the buzz leading up to the turn of the century. It was so popular to invest in the stock market. Everyone was seemingly being urged to participate. When the crash came thereafter people were discouraged and stopped participating. Now, looking at that chart, this has been a "17 year" trend. Participation is VERY low. My personal trading activity reinforces the point.

                            Now, considering the participation and manipulation that is quite obvious, i.e. QE, how much of the market activity is actually "market driven"? I don't know the technical terminology, but individual traders with capital of less than $1,000,000, let's say, vs. larger and progressively larger tranches of players? It seems the market is extremely concentrated in the hands of mega-players. It makes it very easy for "them" to continue the manipulation.

                            It will be an almost trivial task on their part and for their ends to do whatever, but Hussman is right without a doubt. And, Armstrong is wrong, as to the meaning he apparently draws from this chart.


                            The "central planners" have managed to take control of the stock market. What happens depends on what "they" want to happen. As far as being an indicator for the health of the economy the correlation has been broken in my mind. When it becomes broken in the social consciousness we may see some change, but that is also conjecture.

                            If "they" decide it is time to create a market correction "they" will surely accomplish their goal. So far, Trump has "his finger in the dike" and they seem unprepared to take him out. Will they do it? When will they do it? And what form will it take? That is what I am thinking about.
                            There is a reason why science has been successful and technology is widespread. Don't be afraid to do the math and apply the laws of physics.


                            • Desperate measures from Tel Aviv and the deep State

                              Wayne, appreciate the kudos. You probably have some idea of how much reading it takes to make a coherent picture of the situation. I suspect that most of the little players don't have the time or the expertise to pick stocks. The mutual funds have absorbed the investments of the little guy.

                              The state of the swamp has a lot of effect on what happens to the economy. Trump is airing out the swamp creatures and they will go to any length to get rid of him.
                              Swamp Central just got BAD news.
                              " The Israelis Tried to Cut Their Losses in Syria. They Failed
                              They hoped Assad would fall. Then they wished Syria would fall apart, taking Hezbollah with it."
                              The Israelis Tried to Cut Their Losses in Syria. They Failed

                              "Neither by military maneuvers nor by covert means has the Israel / US Axis of Evil been able to defeat Hezbollah. In 2005, the Mossad / CIA complex triggered the 'Cedar Revolution' in Lebanon by killing a prominent Lebanese politician and fingering Syria. The goal of this "color revolution" was to muscle Syrian and Iranian influence out of Lebanon, thus leaving Hezbollah isolated from its main financial backers and suppliers. The phony revolution failed.

                              In 2006, Israel used the pretext of "kidnapped Israeli soldiers" to invade southern Lebanon. Pardon the mild vulgarity, but the invading Israeli Defense Forces got their sorry asses kicked so hard they ran back into Israel crying, literally!"
                              AUGUST 2017
                              The battles for Iran and Syria are pretty much over. The U.S. admits that Syria is firmly in the Russian camp.
                              The chosenites will have to forget about grabbing the oil in the Golan. They will have to forget about the pipelines that they want.
                              Netanyahooo threatened Putin. A STUPID move for anyone.
                              "Not that a war is looming on the horizon. However, Iran's deepened influence in Syria is potentially volatile in the future, increasing the risk that if the 11-year truce and quiet along the Israeli-Lebanese border is broken, the Israeli military may find itself fighting Hezbollah on two fronts. "
                              They will lose just like last time. Netanyahooo says that he is going to bomb Assad in Damascus. This just shows what an idiot he is.

                              Trump has pulled back from supporting the chosenites. Tel Aviv and the deep State may go to desperate and extreme measures to get rid of him. They may be willing to crater the economy to eliminate Trump.


                              • China: the runaway train

                                China captured lots of markets but, China impoverished it's best customers.
                                China printed up mountains of currency all in the name of investment and productivity. The preferred store-of-value in China is real estate and housing. At one time, they had 64 million empty residential units. I don't know what it is now. This rolling over of investment and price inflation has resulted in a housing market that most can't afford. Like many economies, they let productivity run away from consumptive power.
                                Stevenson-Yang Warns "China Is About To Hit A Wall" | Zero Hedge
                                "Just a few weeks ago I was in this little rustbelt city called Zhuozhou in the Hebei province where the steel mills are. It’s a very unpleasant place to spend time. It’s very polluted, there’s nothing to do, the food is bad and the landscape is awful. It’s just no place you want to be and yet property prices have doubled, tripled and in some places even quadrupled in a year."
                                "The story goes that all these people who can’t afford to live in Beijing but work there are going to live in places like Zhuozhou instead and that they are going to take the high speed rail into Beijing. Everybody is speculating like mad but in the end nobody wants to live there."
                                "I have been easily to 40 of them yet I have only seen one that was fully occupied. Many of these projects are megalomaniac visions and totally empty. Yet you go to these places and you see their sales room filled with young buyers. When I open my eyes I see crumbling stone and empty jungles or deserts. What they see is a future with wealthy Europeanized people strolling on modern paths." On 30 bucks a month salary.

                                "the PBOC is attempting to meet two seemingly conflicting goals at once -- weed out excessive borrowing in the financial system while ensuring credit to an economy that’s on a long-term slowdown."
                                China and steel production, "Why is so much steel needed?

                                Simple. It is needed to build more steel mills so as to build more shipyards, ports, railways and bridges so that more ships can be built to carry more iron ore to more ports and thence along more rails and bridges to more steel mills so as to build more shipyards, ports, railways ..."
                                On The Coming Collapse Of China's Ponzi Scheme Economy | Zero Hedge
                                "As long as it keeps growing everything is fine. When it stops growing it collapses.

                                In this case you justify production with demand based purely on more production. As long as you keep pushing production up everything looks fine. At its peak in 2014 China turned out 30 times more cement than the United States, and the latest production figures are only a smidgen less than 2014’s.

                                Command systems may be good at deciding where to direct economic effort in wartime but they are hopeless in peacetime at deciding when to stop and do something else."