Economic pressures

[Danny B]

The fear index,,, rackets in place of commerce,, Kunstler and Saudi

The VIX was the "fear index". Now, the BIS says that the dollar is the new fear index; https://www.bloomberg.com/news/artic...eless-bis-says
The latest fear index is the SKEW. A popular stock-market ‘black swan’ gauge is at a record - MarketWatch If the VIX has been forced down, how far above is the SKEW in reality?
Years of ZIRP has given us years of malinvestment. By blocking all loses, the FED has blocked all rationality and people are staring to get worried.

The financial economy just hums along no matter how bad the real economy gets.
"Retailers Are Running Out Of Time": Channel Checks Show 13% Collapse In Traffic | Zero HedgeFull Speed Ahead for Murphy's Law - KUNSTLER

The Central Banks are trying to achieve some kind of equilibrium. This idea can no longer work, https://www.bloomberg.com/news/video...ilibrium-video
Far too many people have been displaced from the labor market for the economy to function on debt-money from private banks. https://www.sovereignmoney.eu/

Saudi Arabia is destined to go to the trash heap, http://www.zerohedge.com/news/2017-0...hale-one-chart
Deutsche bank is back in the news; http://www.zerohedge.com/news/2017-0...evenue-warning

https://www.armstrongeconomics.com/armstrongeconomics101/economics/whats-collapsing-socialism-or-capitalism/

[Danny B]

Front Seat in Shanghai: Jig is Up

[Danny B]

Rollover, judas goat,, cash only for RE

Armstrong says that the crash will be in the public-debt sector. Maybe so. That doesn't mean that the private sector won't crash first OR concurrently. There are signs that the markets are starting to roll over.
1987, "Stocks declined by more than 22% on October 19. Now, looking at the present, Michael said on my show on March 14 that the T-Bond market broke through that same comparable 1987 floor about one week ago and on Tuesday"
Oliver?s Market Summary as of March 14, 2017 - Investing Video & Audio Jay Taylor Media

"As shown in the chart below, on a cumulative 4-week basis the slowdown in C&I loan creation tumbled by 2.8% as of the latest period: this was the biggest monthly slowdown going back to the financial crisis."
It seems that loan origination is crashing,
Banks Slash Loan Books While Equities Hover Near All-Time Highs; Someone Is Massively Wrong | Zero HedgeYep, lead them to slaughter.
Is the U.S. T-Bond a Judas Goat? - Investing Video & Audio Jay Taylor Media

Armstrong; "We must understand that property values are LEVERAGED, so if the money for fixed rate loans dries up because of interest rate hikes and political uncertainty, then real estate prices MUST fall. This is all because of the leverage that was deliberately injected into the real estate market during the Great Depression for property fell in value so far, only cash buyers could buy anything. Farm land fell in value to below what it was sold for by the government more than 80 years before."
"Real estate is different from stocks and gold. Yes it is a place to park money. However, be careful because without mortgages available, it falls further than other tangible assets because it has been LEVERAGED! "
Martin Armstrong Explains Why Real Estate is DIFFERENT From Stocks and Gold | Silver Doctors

[Danny B]

Dear America: Better Read The Fine Print On Your Credit Card Statement | Zero Hedge

You see the great problem. The current system is collapsing but, there is no replacement system on the horizon. While this system is collapsing, people will want to continue to eat. As more rich people become aware of the coming collapse, they will try to retreat into tangibles. IF they don't retreat into gold, they will cause increasing price inflation that will continuously price the wage-earner out of the markets. The State has tried to get the rich to store their money in bonds. Bonds are looking increasingly bad.
It is dangerous to price the common man out of housing.

He has already been priced out of having a family. IF/when he is priced out of eating, then, we will see big trouble. The State is desperate to keep the money in the bond market but, the fools created ZIRP to try to save the banks.

All the happy-talk from GOV is an effort to keep money from parking in whatever appears to be the safest bet. Shadowstats says that price inflation is running about 10%. The aggregate earning power of the working class is falling. As prices rise, the market dies. Liar-loans are supporting several markets at this point. As loan origination falls, there will be more and more segments of discretionary spending that will wither away. We have shrinking credit and a shrinking workforce.
If T-bills are a judas-goat and stocks are starting to roll over, where will capital flow? Kunstler said that it would be sucked into a black hole.

If the debt ceiling is NOT raised, there will not be any "new" money flowing into the markets. How can the old debt be serviced by new debt if there is no new debt? Congress needs to raise the debt ceiling as soon as possible. When it is much too late, they will see the error of gridlock.

[Danny B]

What happens when you cut up the national credit card?

Armstrong was a professor and has a good talent for getting an idea across. Here is a vid where he does just that. https://www.armstrongeconomics.com/u...he-solution-3/

https://www.armstrongeconomics.com/armstrongeconomics101/basic-concepts/how-capital-moves-outward-then-inward/

[Danny B]

The long decline

Well, the long predicted end of the Trump reflation is now upon us. The bonehead investors figured out that the bonehead congress wasn't going to play ball with Trump. https://dailyreckoning.com/trump-fac...feat-tomorrow/
The stock market has ALWAYS been a place where money moves in and out based on fear & greed. BUT, free money never has pangs of fear. The stock market never suffers a reset due to bad fundamentals. The CB refuses to let fear get in the way. Earnings are stagnant but, prices just keep going up. With the markets WAY above historical values, the fear is slowly starting to seep in.
Garret/Galland Investment Research You Can Trust

The drop has started; Have We Reached A Turning Point For Stocks? Tuesday Was The Worst Day For The Stock Market In 6 Months
So, at what point will investors get back in the stock market? Earnings are dead. WHY should they get back in the markets?

It is not looming. It is DOA.

The headline should read, Italy falls out of love with poverty.
Starvation has a way of doing that.

[Danny B]

This New Bubble Is Even Bigger Than The Subprime Fiasco | Zero Hedge
Then, there is the problem with auto loans, 6 million borrowers are 90 days late on their car loans - Dec. 1, 2016

Oil is still in the news. There are a few new mega-projects that will soon come on line. Oil is not doing well.
Crude Inventory Build Sends Oil Prices Into a Nosedive | Oil Price | FINANCIAL SENSE
So, just how high can default rates go before things go SPLAT?
" 73% of consumers had outstanding debt when they were reported as dead"
Americans Are Dying With an Average of $62K of Debt | Fox Business
I guess that dying is the ultimate default.
Kunstler said that we don't have an economy. We have a web of rackets. He just might be right, https://www.yahoo.com/tech/hackers-t...101801427.html

[Danny B]

Terror & bonds,, debt ceiling & bonds

Every attack in Europe raises the possibilities of Le Pen getting elected. BUT, Le Pen has promised to (effectively) destroy the bond market and the Eurozone. Parliament has come out and said, "this wasn't an islamic attack". Every attack, in Brussels, France, Sweden, Germany, GB, et al is one more dagger in the heart of the European bond market.
The chosenites are using the financial power of the bond market to bring about the cultural destruction of Europe.

http://www.energeticforum.com/299835-post144.html

Every nationalist candidate and/or leader is a threat to the bond market. This is especially true for Trump and the FED. De Gaulle and JFK were previous threats to the power of the financial rulers.
Armstrong has called for a crash of the sovereign bond market. Le Pen, Trump, Grillo, et al, are just moving it along. A crash of the sovereign bond market would seriously reduce the power of the one-worlders.

The problems at Deutsche bank have essentially confirmed that the European banking system is not long for this world. The America banking system is slightly better because of capital flight from weaker systems. BUT, America is burdened by the horrendous cost of it's many wars.

https://biblicisminstitute.wordpress.com/2014/07/21/the-us-israeli-relationship/

A crash of sovereign debt would remove much of the power of the finance class but, it would also cause widespread misery and death. Russia will be exempt from this crash due to many fundamentals that are in their favor.

The debt ceiling & budget battle have essentially set a timeline for the collapse of the bond market. There is a small possibility that the FED would be allowed to monetize tons of new Treasury issuance in time to save the Euro-dollar market but, it isn't likely. If / when the European banks go down, they will bring down a lot of other banks with them.
The battle to stop Trump will undermine the bond market that is the source of power for those trying to stop him.
It wouldn't be the first time that politicians have shot themselves in the foot.

Now seems to be the time to buy silver. Dead Men Walking? | SilverSeek.com
China wants to pull a rabbit out of the hat with all that gold they have accumulated, John Hathaway – China To Radically Reprice Gold Higher In 2017 As Demise Of The COMEX & LBMA Accelerates | King World News

[Danny B]

The deep state cracking,, the narrative crashing

Charles Hugh Smith has a fantastic ability to envision, describe and project things around us that we don't "readily" analyse.
"This is why the Deep State is fracturing: its narratives no longer align with the evidence."
"The New Yorker is right about one thing--the Deep State is not a "conspiracy:" it is a vast machine of control that is largely impervious to the views or demands of elected representatives or the American people. The key to understanding this social-political-economic control is to grasp that control of the narratives, expertise and authority is control of everything."
"We can now define the Deep State with some precision. The Deep State is fundamentally the public-private centralized nodes that collect, archive and curate dominant narratives and their supporting evidence, and disseminate these narratives to the public via the media and to the state agencies"

"Curation is a critical factor in maintaining control of the narrative and thus of control; the evidence is constantly curated to best support the chosen narrative"
"The primary claim of each Deep State node is that its expertise and authority cannot be questioned. In other words, while the dominant narrative can be questioned (but only cursorily, of course), the expertise and authority of the institutional node cannot be questioned."
"This is why the Deep State is fracturing: the expertise and authority of its nodes are delaminating because its narratives no longer align with the evidence. " "There is indeed a Deep State, but its control of dominant narratives, and thus its source of control and power, is crumbling. "
oftwominds-Charles Hugh Smith: The Deep State's Dominant Narratives and Authority Are Crumbling
I suppose that this article could also be posted at American Ruling ClassWhat stability?Side note; "If the latest surveys of business intentions are to be believed, the euro zone economy is sparkling, growing at a pace that easily explains the hints from some European Central Bank policymakers of a pull-back from their easy-money regime."
Euro zone economy sparkles, lights way for ECB pull-back | Reuters
Eurozone Whistles Past its Biggest Threat | Wolf Street
The Italians are definitely misaligned with the truth.

America is definitely misaligned from all the happy talk, The retail apocalypse has officially descended on America - Business Insider
Probably something to do with the great loss of discretionary spending as a result of the global mean wage.

"Americans fled Europe because of all the political infighting. They were isolationists and felt Europe should fend for itself. It was the politicians who lied and did whatever it took to maneuver the opinion to support their desire for war. We are merely returning to a period of isolationism after countless wars and attempts to create nation building so politicians can pound their chests.
FDR went to Boston to promise their sons would NEVER go to Europe to defend the British.
By no means should we view the Dutch elections as this being the end of populism. It is just getting started because politicians have abused the people countless times. "
"have indeed still ushered in the dawn of a new populism in Europe, which is always against the establishment. That was in fact what swept FDR into office in 1933, Hitler in Germany also in 1933, and Mao also in 1933."
"The important change in trend will come in May" ??

https://www.armstrongeconomics.com/international-news/europes-current-economy/the-rise-of-populism-here-to-stay/

https://www.armstrongeconomics.com/world-news/taxes/marxist-socialism-now-relabeled-as-the-sharing-economy/

The BS data is misaligned from the reality on the ground; http://www.zerohedge.com/sites/defau...324_PMI4_0.jpg

http://www.zerohedge.com/news/2017-03-24/soft-data-slammed-us-services-manufacturing-pmis-plunge-6-month-lows

[Danny B]

QE did nothing for earnings in assets

Armstrong says that investment will move from the failed public bond market back into private investment. I have to disagree with him because private investment depends on consumption and profits. Only the public sector is "immune" from the necessities of profit-making.
Stocks; "This is saying over the next 25yrs, there will be three new sellers per every new buyer and sellers are mandated to sell over twice as fast as it is hoped that buyers accumulate (assuming there is adequate full time job growth and wage growth providing the excess income for retirement savings"

"And if we make an assumption that the significantly slower growth in full time jobs and wage growth results in just a 15% reduction in retirement savings among the 25-60yr/old population, the mandated sellers overwhelm buyers in about 15yrs from now."

https://econimica.blogspot.com/2017/03/required-minimum-distributions-spells.html

Even today, stock earnings are non-existent.

Earnings per s

http://www.alhambrapartners.com/2017/03/24/the-inverse-of-keynes/

All that free money pumped in just helped valuations. ONLY consumption can help earnings.

Apparently, Canada is going to emulate Europe; Canada Passes 'Blasphemy' Bill To Silence Critics Of Islam | Zero Hedge

"I am not at all surprised that Democratic senate minority leader Chuck Schumer has recently vowed to throw the debt ceiling talks into disarray if Trump continues to pursue a rollback of Obamacare, the building of the southern border wall, or the defunding of Planned Parenthood. Schumer has specifically warned of a government shutdown designed to prevent the Trump administration from instituting such policies."
Watch These Geopolitical Flashpoints Carefully | Zero Hedge
Right on schedule.
Russia has their alternative to SWIFT up and running; https://www.rt.com/business/382017-r...-central-bank/

[Danny B]

The State is criminal from ANY viewpoint

This is what Bastiat had to say about the "State";
"I wager ten to one that for six months you have been making utopias; and if you have been making them, I wager ten to one that you place upon the state the responsibility of realizing them.
And you, madame, I am sure that you desire from the bottom of your heart to cure all the ills of mankind, and that you would be in no wise embarrassed if the state would only lend a hand. "
Bastiat: Selected Essays, Chapter 5, The State | Library of Economics and Liberty

Lord Acton, "power corrupts and absolute power corrupts absolutely".
So, we "give" great power to the State and expect it to cure all of our problems. We act surprised when the State uses this power to cure it's problems. All States are socialist in that they redistribute wealth. All States are fascist in that they distribute wealth to their rich controllers.
Bastiat, " I, too, long to have at hand that inexhaustible source of riches and enlightenment, that universal physician, that limitless treasure, that infallible counselor, that you call the state."

"It is the unfortunate primitive tendency which all men have to divide their complex lot in life into two parts, shifting the pains to others and keeping the satisfactions for themselves"
"The State is the great fiction through which everyone endeavours to live at the expense of everyone else. " "each of us, more or less, would like to profit from the labor of others."
"It will be the arbiter, the master, of all destinies. It will take a great deal; hence, a great deal will remain for itself. It will multiply the number of its agents; it will enlarge the scope of its prerogatives; it will end by acquiring overwhelming proportions. "
Bastiat: Selected Essays, Chapter 5, The State | Library of Economics and Libertyhttps://www.rutherford.org/publicati...set_forfeiture

https://www.washingtonpost.com/news/wonk/wp/2015/11/23/cops-took-more-stuff-from-people-than-burglars-did-last-year/?utm_term=.f551553d15a8

https://www.armstrongeconomics.com/a...e-it-is-force/
The State naturally tries to maintain a monopoly on violence. BUT, all this control is quite expensive. The tax base is shrinking. Theft only makes up a small part of the deficit. Those people who depend on the State for their daily bread are getting quite nervous. They would willing vote for a raging criminal to be their leader as long as she kept the food trough full.

The weak point of both socialism and the Hegelian Dialectic is; they both kill motivation and productivity. Socialism is the firewall between non-producers and Darwinian pressures. Socialism generates and regenerates non-producers until the balance between accounts receivable and accounts due become unsustainable.

[Danny B]

Chris Martenson: "Why This Market Needs To Crash (And Likely Will)" | Zero Hedge

[Danny B]

The cause and result of the gridlock in D.C.

From the Chris Martensen article; "The boomer generation in charge has a lot to answer for in this story; from their inability to lead boldly, to their selfish pushing-off of the repercussions of their own poor decisions onto future generations"
The boomer generation worked hard but, lost control of the political process. The control matrix went into overdrive and we rarely heard the truth. If we protested the wars, we were brutally repressed. The military-industrial-banking complex made sure that any anti-war movements were vilified. Out of ignorance of the facts, we elected some bad politicians. But, the war party was the only party that we could chose "from".
Our "poor decisions" consisted to a great degree on believing the promises from GOV. We assumed that the politicians had the best interests of Americans at heart, not the best interests of israel.
We made fatal decisions based on the info presented by MSM. We are / were chemically dumbed down so as not to question the State narrative.

https://www.youtube.com/watch?v=TsUjRvYtDU8

The endless deceit has led the country into a financial impasse. All that is left is a consortium of rackets. EVERYONE is fighting to hold on to their advantage and sinecure. It doesn't matter what happens to everyone else as long as I continue to get my "due" share. It doesn't matter if I produce nothing,,, just so long as I get my rewards.

Here are some comments;
This is what ZIRP is doing the the economy - creating a buildup of zombie banks and corporations, captured regulators and bad debts that is smothering the economy. At some point there will be a combination of factors - an exogenous or endogenous shock, and there will be an economic firestorm that no amount of money printing can paper over.

We already know the legislature is not well-functioning. If they do not compromise, and if you do not accept compromise, then you reject America - and everything which America stands for! You are not a real American, if you're against compromise. Compromise is the only reason for the existence of the legislature.
Be arrogant, if you must. Be sold on your own narrow but utterly impossible little prophetic vision for how the world should work. But know this, though you will laugh it off, mock it, you were one of those who formed the basis of the destruction of the systems of govenment.

The fourth turning is here, and plain. Gone are the old men who could compromise.

10,000 large and small mill towns and manufacturing cities are dead, supported by McDonalds, Social Security, Disability, town/county shuffle jobs.

20 million illegals taking jobs, pumping up welfare burdens, sending cash home. 5 million H1B keeping tech fat. 1 million legal from 3rd world bring grandma with the brain tumor over.
I do not speak of fairness. I speak of the fourth turning. What do you think representative democracy is for? The whole point is to reach compromises. But the Baby Boomers are a bunch of spoiled brat arrogant idiots, who insist on always getting their way. Now they drive the ship of state into the ground.
But let's be clear. If you cannot abide by compromise, then you aren't even an American. You're an overgrown baby that cannot call himself an adult.

No compromise? No legislative government. No America.
Your mind is captured by a perverse dynamic that is dominated by politics.
We have not had a free market democratic republic since the Civil War.
What we have is an immoral warfare state funded by an entirely unsustainable debt based monetary system. This cannot be reformed. It must be blown up.
The headlines should be dominated by talk of enterprize, prosperity and caring. But they are dominated by politics, war and monetary central planning.
What do you think the purpose of a legislature is? Do you suppose the point is to NOT compromise? What a JOKE!

The comments are very harsh on baby boomers. It must be remembered that the average boomer had no immoral part in the destruction. The boomer politicians are a different story; McCain: "The New World Order Is Under Enormous Strain" | Zero Hedge

[Danny B]

Liquidity traps and pension collapses

" If repealing Obamacare is tough, just wait for tax reform and the debt limit."
"And the Bernanke Fed surely thought at the time that doubling its balance sheet during the 2008/09 crisis was a one-time response to a once-in-a-lifetime financial dislocation."
The productive economy crashed and the FED stepped in to save the banks,,,,, somehow thinking that it would be a one-off save. They had to be pretty stupid to just ignore the fundamentals.
Credit Bubble Bulletin : Weekly Commentary: Discussions on the Fed PutOh, but, they wanted it SO badly.Gotta save the banks at all cost.

"The working assumption is that the Pension Tsunami will never make land fall, but the next time you take comfort in the sanctity of pensions given they have yet to self-destruct"

https://www.bloomberg.com/view/articles/2017-03-24/pension-crisis-too-big-for-markets-to-ignore

Illinois would like to cancel all of it's legacy debt. That includes $130 billion pension debt; Is Bankruptcy For Illinois The Answer? | Zero Hedge
Gridlock has a price; This Is The Nightmare Scenario For The GOP: A $2 Trillion Funding "Hole" | Zero Hedge
Can't forget China; "They should, because as Deutsche Bank puts it, if taken too far, they threaten an "uncontrollable liquidity event", i.e., the financial cataclysm that Kyle Bass and other perma-china-bears have been waiting for."
China has tried and tried to control runaway lending. The banks were stacking logs on the burn pile. Now, they are pouring gasoline on it. On The Edge Of An "Uncontrollable Liquidity Event": The Definitive Guide To China's Financial System | Zero Hedge

"It will in fact be driven by pension funds that cannot pay out what they promised to retirees. According to one pension advocacy organization, nearly 1 million working and retired Americans are covered by pension plans at the risk of collapse."

http://www.zerohedge.com/news/2017-03-25/your-pension-could-be-center-americas-next-financial-crisis

Brought to you by ZIRP. BUT, it was worth it to save the banks.

China isn't the only State with a liquidity problem, http://www.zerohedge.com/news/2017-0...dity-collapses

India, "Businesses are failing and the poorest are finding employment very difficult to come by. Food prices are still much cheaper than normal, as a result of the economic struggles of poor people. Farmers are facing huge financial pressure in turn." NOT a good sign

http://www.acting-man.com/?p=48912

Both India and Pakistan are going to fall into total meltdown.

Mnuchin says that you can stop worrying about automation; http://www.zerohedge.com/news/2017-0...king-new-repor

Brought on by failure and paralysis.

I wonder why?
No kidding. That was the whole purpose in their creation.

[Danny B]

Dow posts 8-day slide, longest since 2011, as Street weighs tax reform prospects
Bank stocks lost 6% in ONE day. The FED will undoubtedly come to the rescue.
StockResearch - Miller's Market Musingshttps://markstcyr.com/2017/03/26/the...-very-worried/Venezuela In Dire Straits As Oil Production Falls Further | OilPrice.com

Unpopulism, "The share of national income that went to the bottom 90% of the population held steady at around 66% from 1950 to 1980. It then began a steep decline, falling to just over 50% when the financial crisis broke in 2007."
"During the business cycle upswing between 1961 and 1969, the bottom 90% of Americans took 67% of the income gains. During the Reagan expansion two decades later they took 20%. During the Greenspan housing bubble of 2001 to 2007, they got just two cents in every extra dollar of national income generated while the richest 10% took the rest."
"The US economist Thomas Palley* says that up until the late 1970s countries operated a virtuous circle growth model in which wages were the engine of demand growth." YES, wages.
"Unpopulism was touted as the antidote to the supposedly failed policies of the postwar era. It promised higher growth rates, higher investment rates, higher productivity rates and a trickle down of income from rich to poor. It has delivered none of these things." WHAT TRICKLE?

"Populism is seen as irrational and reprehensible. It is neither. It seems entirely rational for the bottom 90% of the US population to question why they are getting only 2% of income gains. It hardly seems strange that workers in Britain should complain at the weakest decade for real wage growth since the Napoleonic wars."

https://www.theguardian.com/business/2017/mar/26/populism-is-the-result-of-global-economic-failure

The banks love war because war is such good business. Defense contractors love war because they can blatantly screw the pentagon and rarely get caught. http://www.activistpost.com/2017/03/...dod-knows.html
The F-35 is an expensive boondoggle that doesn't work. The next projected boondoggle is even more expensive, https://sofrep.com/77149/new-marine-...t-f-35-really/