POLITICS, ECONOMICS AND EDUCATION HAVE FAILED, AT THIS POINT, THEY ARE A COMPLETE WASTE OF TIME.
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."
Lau Tzu
Wall Street has become a soulless, amoral culture that cares nothing about the rest of America.
Never trust Wall Street to tell the truth.
Godly people are the only hope our nation has.
There is consternation at every level of our nation and the world.
Wall Street's addiction to short-term thinking guarantees another crash.
The last three decades of debt delusion are coming to a tragic bitter end.
Often the best time to sell is when everyone else is buying. Now may be that time.
The only Spiritual light in the world is the Holy Bible. Either we follow it or we are doomed.
Darkness has fallen upon our ministers and national leaders and they cannot see spiritual reality.
Despite Bernanke's best efforts the forces of deflation may be overwhelming the central bank's efforts to reflate.
Wall Street has successfully used propaganda and misinformation to lure generations of weak minded people into debt servitude.
The multitudes are not going to repent unless a great calamity falls on them. The mood is exactly the mood of the world before the flood.
As it stands now, the United States has become a people of the government, by the government and, most importantly, for the government.
Israel is in a box of political pressure to not act against Iran. They have no choice and when they do act it is likely to be the spark that ignites the fuse.
It's a shame that the country that was once the beacon of freedom and economic liberty no longer has the ability to recognize what capitalism actually looks like.
Terminally Distracted.
Sooner or later, the U.S. or Israel will strike Iran.
We Are At A Crossroads Between Freedom & Slavery.
There is no need to "fight the Fed" because they're busy self-destructing!
The flood of cheap money from the European Central Bank is storing up grave trouble for the future.
Political risk in the Middle East has increased significantly with war between Iran and Israel "almost inevitable.
Banks are still using the just trust us method to value hundreds of billions of dollars of assets left over from the financial crisis.
Europe has no strategy for growth, no strategy for jobs, and in truth, no strategy for saving the euro. The project is broken beyond repair.
Volatility will increase as the markets fight their way to the mania phase of this cycle – and that once there, the gyrations will jump even higher. Prepare yourself for bigger daily swings – in both directions.
Considering the economy is just now limping out of a fairly deep recession and taking into account the extremely volatile nature of the debt situation in Europe and the political situation in the Middle East, it seems this market has come a bit too far too fast in 2012.
Fiscal tightening is one of the biggest threats to U.S. economic growth, and that fiscal drag could amount to as much as 4 percent if lawmakers don't change their current policies. Given the amount of fiscal tightening, we think there will be another uncertainty shock."
It is incredible that we live in a world where the difference between going out of business as a bank and prosperity lies with cheap money being accessed from the central bank balance sheet. Soon there will be repercussions from a central bank morphing from a bona fide lender of last resort to a gift-giving institution.
The ECB has started to make very sizable margin calls on its credit-extensions to counterparties. While the hope was for any and every piece of lowly collateral to be lodged with the ECB in return for freshly printed money to spend on local government debt, perhaps the expectation of a truly virtuous circle of liquidity lifting all boats forever is crashing on the shores of reality.
The rapid deterioration in collateral asset quality is extremely worrisome as it forces the banks who took the collateralized loans to come up with more 'precious' cash or assets (unwind existing profitable trades such as sovereign carry, delever further by selling assets, or subordinate more of the capital structure via pledging more assets - to cover these collateral shortfalls) or pay-down the loan in part. This could very quickly become a self-fulfilling vicious circle - especially given the leverage in both the ECB and the already-insolvent banks that took LTRO loans that now back the main Italian, Spanish, and Portuguese sovereign bond markets.
The conventional view serves to protect us from the painful job of thinking.
John Kenneth Galbraith
"Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces."
Sigmund Freud
"We tell ourselves we're in an economic recovery, meaning we expect to return to a prior economic state, namely, a turbo-charged "consumer" economy fueled by easy credit and cheap energy. Fuggeddabowdit. That part of our history is over. We've entered a contraction that will seem permanent until we reach an economic re-set point that comports with what the planet can actually provide for us. That re-set point is lower than we would like to imagine. Our reality-based assignment is the intelligent management of contraction. We don't want this assignment. We'd prefer to think that things are still going in the other direction, the direction of more, more, more. But they're not. Whether we like it or not, they're going in the direction of less, less, less. Granted, this is not an easy thing to contend with, but it is the hand that circumstance has dealt us. Nobody else is to blame for it."
Jim Kunstler
THE NEXT CRISIS................
When the next crisis occurs the monied interests will try to promote another bailout, with harsh terms once again being dictated to the public, rather than to the banks. This is what is happening in Greece. The terms will be so draconian and unsustainable that state fascism is the most likely longer term outcome. Germany is struggling with that decision today, in light of bad results in their last two experiences along those lines.
I am not hopeful that the leaders of the political world will have the resolve to do what it takes to bring the banks back under control, given the power that big money has obtained over our worldly leaders.
MUST WATCH VIDEO CLIP.........DON'T MISS THIS VIDEO CLIP.
TrimTabs President & CEO Charles Biderman explains why the growing optimism over the stock market is misguided based on faulty BLS data.
http://www.youtube.com/watch?feature=player_embedded&v=_lsEAsETdoo
BY THE WAY TRIM TABS IS ONE OF THE MOST AUTHORITATIVE DATA SOURCES ON THE STREET.
OUR ARROGANT LEADERSHIP IS LEADING US TOWARDS DESTRUCTION................
Before destruction the heart of man is haughty.
Proverbs 18:12
It is an old and common saying, that "coming events cast their shadows before them;" the wise man teaches us that a haughty heart is the prophetic prelude of evil. Pride is as safely the sign of destruction as the change of mercury in the weather‐glass is the sign of rain; and far more infallibly so than that.
When men have ridden the high horse, destruction has always overtaken them.
THIS CERTAINLY HITS THE POLITICAL NAIL ON THE HEAD............
The modesty of intelligent men is of this type. The more they know, the more they are humbled by their ignorance. Modern American politicians and voters, rarely notice their own ignorance. Today's politicians present their ideas and the ignorant multitude sits in judgment. "Democracy substitutes election by the incompetent many for appointment by the corrupt few," said George Bernard Shaw. Sadly, it would be more correct to say that democracy more and more signifies the appointment of the corrupt few by the incompetent many.
After Socrates received his death sentence, he asked for a favor which we should take to heart:
When my sons are grown up, I would ask you, O my friends, to punish them; and would have you trouble them, as I have troubled you, if they seem to care about riches, or anything more than about virtue, or if they pretend to be something when they are really nothing – then reprove them, as I have reproved you, for not caring about that for which they ought to care, and for thinking they are something when they are really nothing.
I KNOW A LOT OF PEOPLE THAT MAKE A LOT OF MONEY AND THINK THEY ARE REALLY SOMETHING AND AS SOCRATES SAYS ABOVE, THEY ARE REALLY NOTHING. I FIND FAR MORE COMMON SENSE AND WISDOM AMONG MY WORKING CLASS FRIENDS. THIS IS EXACTLY WHY AMERICA IS BROKEN. THESE PEOPLE PROTECTING THEIR TURF, CONTINUING TO SPEW THEIR BULLSHIT, AS IF IT HAD VALUE OR MEANING, TO THE IGNORANT MASSES, WHO CLEARLY CAN'T TELL THEIR HEAD FROM A HOLE IN THE GROUND! AND WE WONDER IN PRIVATE WHY THINGS ARE GETTING WORSE AS WE PRETEND THEY ARE GETTING BETTER IN PUBLIC. WE ALL KNOW EXACTLY HOW THIS TRAGIC COMEDY OF FOOLS ENDS!
FASCISM RULES............
One of the more noxious platitudes foisted upon the public by our increasingly Orwellian government is "See Something, Say Something."
This saying, of course, differs in no material way from the sort of propaganda utilized in all the fascist states that have come before.
EUROPE IS DOOMED................
The risk for Europe is that investors will charge a "political risk" premium to invest in any EMU country subject to EU legal whim. The greater risk is that Euroland's crisis rumbles on as fiscal contraction in Italy and Spain plays havoc with debt dynamics, and reforms come much to late to close the North-South trade gap.
Europe's handling of Greece has guaranteed that global funds will rush for Club Med exits at the first sign of trouble. The next spasm of the debt crisis will be that much more dangerous when it comes. As the saying goes: Hell hath no fury like an abused bondholder.
"The rule of law has been treated with contempt," said Marc Ostwald from Monument Securities. "This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal."
NO MONEY, LIKE HONEST MONEY.............
Gold prices will only go down when governments change course and make significant cuts and dramatic policy changes. Until then, gold is not in a bubble. It's the only way to protect your wealth; and in the current economic condition, it's poised to go much higher.
Wise words: "For if human liberty is to survive in America, we must win the battle to restore honest money."
A FEW THINGS YOU MIGHT WANT TO PAY ATTENTION TOO...........
1. The geopolitical component.
THIS CERTAINLY HITS THE POLITICAL NAIL ON THE HEAD............
The modesty of intelligent men is of this type. The more they know, the more they are humbled by their ignorance. Modern American politicians and voters, rarely notice their own ignorance. Today's politicians present their ideas and the ignorant multitude sits in judgment. "Democracy substitutes election by the incompetent many for appointment by the corrupt few," said George Bernard Shaw. Sadly, it would be more correct to say that democracy more and more signifies the appointment of the corrupt few by the incompetent many.
After Socrates received his death sentence, he asked for a favor which we should take to heart:
When my sons are grown up, I would ask you, O my friends, to punish them; and would have you trouble them, as I have troubled you, if they seem to care about riches, or anything more than about virtue, or if they pretend to be something when they are really nothing – then reprove them, as I have reproved you, for not caring about that for which they ought to care, and for thinking they are something when they are really nothing.
I KNOW A LOT OF PEOPLE THAT MAKE A LOT OF MONEY AND THINK THEY ARE REALLY SOMETHING AND AS SOCRATES SAYS ABOVE, THEY ARE REALLY NOTHING. I FIND FAR MORE COMMON SENSE AND WISDOM AMONG MY WORKING CLASS FRIENDS. THIS IS EXACTLY WHY AMERICA IS BROKEN. THESE PEOPLE PROTECTING THEIR TURF, CONTINUING TO SPEW THEIR BULLSHIT, AS IF IT HAD VALUE OR MEANING, TO THE IGNORANT MASSES, WHO CLEARLY CAN'T TELL THEIR HEAD FROM A HOLE IN THE GROUND! AND WE WONDER IN PRIVATE WHY THINGS ARE GETTING WORSE AS WE PRETEND THEY ARE GETTING BETTER IN PUBLIC. WE ALL KNOW EXACTLY HOW THIS TRAGIC COMEDY OF FOOLS ENDS!
FASCISM RULES............
One of the more noxious platitudes foisted upon the public by our increasingly Orwellian government is "See Something, Say Something."
This saying, of course, differs in no material way from the sort of propaganda utilized in all the fascist states that have come before.
EUROPE IS DOOMED................
The risk for Europe is that investors will charge a "political risk" premium to invest in any EMU country subject to EU legal whim. The greater risk is that Euroland's crisis rumbles on as fiscal contraction in Italy and Spain plays havoc with debt dynamics, and reforms come much to late to close the North-South trade gap.
Europe's handling of Greece has guaranteed that global funds will rush for Club Med exits at the first sign of trouble. The next spasm of the debt crisis will be that much more dangerous when it comes. As the saying goes: Hell hath no fury like an abused bondholder.
"The rule of law has been treated with contempt," said Marc Ostwald from Monument Securities. "This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal."
NO MONEY, LIKE HONEST MONEY.............
Gold prices will only go down when governments change course and make significant cuts and dramatic policy changes. Until then, gold is not in a bubble. It's the only way to protect your wealth; and in the current economic condition, it's poised to go much higher.
Wise words: "For if human liberty is to survive in America, we must win the battle to restore honest money."
A FEW THINGS YOU MIGHT WANT TO PAY ATTENTION TOO...........
1. The geopolitical component.
Currently, there are two significant political problems that, when taken together, have introduced a considerable amount of uncertainty into the market:
Iran has effectively created a floor under crude prices by cutting off oil exports to Britain and France and by continually ratcheting-up its rhetoric regarding the closure of the Strait of Hormuz through which around 30% of the world's seaborne oil travels. The decision to cut exports is a preemptive move designed to punish France and Britain for their participation in an embargo of Iranian oil set to begin on July 1st–the embargo is an attempt by European nations to punish Iran for its rogue nuclear program. While the disruptions to the oil market are themselves disconcerting, the real concern is that Iran will conduct a preemptive strike on Israel to prevent Tel Aviv from bombing its nuclear sites.
Iran has effectively created a floor under crude prices by cutting off oil exports to Britain and France and by continually ratcheting-up its rhetoric regarding the closure of the Strait of Hormuz through which around 30% of the world's seaborne oil travels. The decision to cut exports is a preemptive move designed to punish France and Britain for their participation in an embargo of Iranian oil set to begin on July 1st–the embargo is an attempt by European nations to punish Iran for its rogue nuclear program. While the disruptions to the oil market are themselves disconcerting, the real concern is that Iran will conduct a preemptive strike on Israel to prevent Tel Aviv from bombing its nuclear sites.
The civil war currently raging in Syria. While its direct implications for stocks are few, it could certainly introduce more uncertainty into markets if the situation worsens, necessitating intervention by NATO or U.S. forces to put an end to the violence.
2. The economic component:
Consumer spending accounts for around 70% of U.S. economic activity and, after gaining some momentum midway through 2011, spending ground to a standstill during the last three months of the year even as consumer credit expanded. Accounting for inflation, spending actually fell .1% in December.
Rising oil prices pose a real threat to spending going forward as consumers are less likely to spend when they perceive that gas prices will continue to rise for the foreseeable future.
3. The European debt crisis:
Nothing is fixed. The second bailout awarded to Greece is little more than a quick fix to avoid a catastrophic March 20 default. Greece will default sooner or later and delaying the inevitable is likely to make the event that much more painful when it actually occurs.
The ECB has no current plans to implement a third round of LTROs after next week's second offering. Although difficult to prove conclusively, it is widely believed that the ECB's three year, low interest loans to eurozone banks are largely responsible for preventing a disastrous spike in Italy and Spain's borrowing costs which, had it occurred, could have caused the two countries to go the way of Greece.
Borrowing costs could start to rise once again in the absence of further stimulus, an event which could plunge the eurozone right back into crisis mode.
THE CANARY IN THE BANKING COAL MINE...........
Insolvency will keep dragging the Euro-Area economy down until sovereign and bank balance sheets are repaired, but as Lombard Street Research points out: eliminating the Ponzi debt without fracturing the entire credit system is impossible. The Lehman default occurred 13 months after the US TED spread crossed 100 basis points. The European equivalent crossed 100 basis points in September 2011, so its banking crisis would occur this autumn if a year or so is a normal incubation period.
Borrowing costs could start to rise once again in the absence of further stimulus, an event which could plunge the eurozone right back into crisis mode.
THE CANARY IN THE BANKING COAL MINE...........
Insolvency will keep dragging the Euro-Area economy down until sovereign and bank balance sheets are repaired, but as Lombard Street Research points out: eliminating the Ponzi debt without fracturing the entire credit system is impossible. The Lehman default occurred 13 months after the US TED spread crossed 100 basis points. The European equivalent crossed 100 basis points in September 2011, so its banking crisis would occur this autumn if a year or so is a normal incubation period.
A Greek or any other significant default will precipitate a European banking crisis in the foreseeable future. Markets are already speculating on Portuguese negotiations for haircuts and Ireland can't be far behind and the contagion to US (and global) banking systems is inevitable given counterparty risks, debt loads (and refi needs), and capital requirements (no matter how well hidden by MtM math). The contagion will likely show up as a risk premium in the credit markets initially as we suggest the recent underperformance of both US and European bank credit relative to stocks is a canary to keep an eye on.
DIGGING THEIR OWN GRAVE........
The flood of cheap money from the European Central Bank is storing up grave trouble for the future.
When something looks dangerous, it generally is. And few things look quite so high-wire right now as the European Central Bank's efforts to hold the euro together by flooding the banking system with free money.
Taken as a whole, the sophistry of the process is breathtaking. The ECB is in effect being used as a mechanism for making fiscal transfers between countries, which can only legitimately be agreed by elected governments. The more policy-makers dig, the deeper into the mire they sink.
Europe has no strategy for growth, no strategy for jobs, and in truth, no strategy for saving the euro. The project is broken beyond repair.
After Bernanke's recent comments, the questions investors will now be asking themselves are:
What role has liquidity played in the market rally, and what will be the impact if some of that liquidity is taken out of the markets?
What role has zero-interest-rate policy played on domestic economic growth, and without interest rates at zero, will the domestic economic recovery be self-sustaining? WE ALL KNOW THE ANSWER!
Has zero-rate policy begun to lose its impact on the economy? Are zero interest rates doing more harm than good as the policy penalizes the savings class and has inflationary consequences?
We have experienced a persistent market advance that has virtually expunged pessimism from Wall Street. I recognize that the cause for the optimism has been the improvement in high-frequency economic statistics, but market tops and corrections almost always occur when there is a plethora of good news - similar to what we see today.
TWO IMPORTANT DEADLINES ARE NEAR......
There are two hard deadlines approaching, the need to raise the debt limit and expiration of all expiring tax cuts at the end of the year. These two action-forcing events, when combined with more than the usual political uncertainty over control of Congress and the White House next year, mean that the long-awaited fiscal crisis is at hand once more.
REALITY.............
The Big Lie of austerity and consumer deleveraging is unquestioned by the talking heads in the mainstream media. They are incapable or unwilling to examine the actual data which substantiates the fact that Americans have NOT deleveraged and have NOT taken austerity to heart.
DIGGING THEIR OWN GRAVE........
The flood of cheap money from the European Central Bank is storing up grave trouble for the future.
When something looks dangerous, it generally is. And few things look quite so high-wire right now as the European Central Bank's efforts to hold the euro together by flooding the banking system with free money.
Taken as a whole, the sophistry of the process is breathtaking. The ECB is in effect being used as a mechanism for making fiscal transfers between countries, which can only legitimately be agreed by elected governments. The more policy-makers dig, the deeper into the mire they sink.
Europe has no strategy for growth, no strategy for jobs, and in truth, no strategy for saving the euro. The project is broken beyond repair.
After Bernanke's recent comments, the questions investors will now be asking themselves are:
What role has liquidity played in the market rally, and what will be the impact if some of that liquidity is taken out of the markets?
What role has zero-interest-rate policy played on domestic economic growth, and without interest rates at zero, will the domestic economic recovery be self-sustaining? WE ALL KNOW THE ANSWER!
Has zero-rate policy begun to lose its impact on the economy? Are zero interest rates doing more harm than good as the policy penalizes the savings class and has inflationary consequences?
We have experienced a persistent market advance that has virtually expunged pessimism from Wall Street. I recognize that the cause for the optimism has been the improvement in high-frequency economic statistics, but market tops and corrections almost always occur when there is a plethora of good news - similar to what we see today.
TWO IMPORTANT DEADLINES ARE NEAR......
There are two hard deadlines approaching, the need to raise the debt limit and expiration of all expiring tax cuts at the end of the year. These two action-forcing events, when combined with more than the usual political uncertainty over control of Congress and the White House next year, mean that the long-awaited fiscal crisis is at hand once more.
REALITY.............
The Big Lie of austerity and consumer deleveraging is unquestioned by the talking heads in the mainstream media. They are incapable or unwilling to examine the actual data which substantiates the fact that Americans have NOT deleveraged and have NOT taken austerity to heart.
The most basic facts fly in the face of consumers even having the wherewithal to pay down their debt. Median household income has declined from $50,300 in 2008 to $49,400 today. There are 5 million less people employed today than employed in 2008. Total wages in the country have only grown from $6.6 trillion in 2008 to $6.8 trillion today. This increase was concentrated among the .01%, who do not carry credit card debt. They profit from credit card debt. Real disposable personal income has fallen by 5% since the peak in 2008 as Bernanke's Wall Street bailout zero interest rate policy has caused prices for everything except our houses to surge. The people carrying most of the credit card debt are the least able to pay it off. These are the same people who have swelled the food stamp rolls from 28 million in 2008 to 46.5 million today.
SEVEN REASONS THE MARKET MAY TUMBLE.........
Breadth is lagging.
Eighty-five percent of S&P holdings trade above their moving averages.
Only 3% of S&P holdings are oversold.
Volume is dropping (and is unconvincing).
New highs are making lower lows.
The transports are signaling problems and slowdown ahead.
The Russell 2000 has begun to noticeably underperform iShares Russell 2000 Index Fund (IWM_), down almost 2% even though S&P cash was down only 6.5 points.
These are not typically the ingredients for a durable leg higher.
IMPOSSIBLE......
Most of the political class recognizes the impossibility of solving the debt problem. It is too far gone for them to deal with. They have committed to a strategy of keeping the dead economy alive for as long as possible. The patient is clinically dead and should be removed from the respirator. Instead, the political class will pretend and extend for as long as they can get away with it. They will continue to benefit while the rest of the country is plundered even more.
The unavoidable Depression will occur regardless of their actions. The only issue is whether it is triggered by a massive inflation or a debt collapse. An immediate debt collapse would be less painful for the citizens than hyperinflation. In a debt collapse, balance sheets are cleansed and the economy is purged of much of the mal-investment and mis-allocation that has built up over the last couple of decades. The liability side of balance sheets shrinks to the underlying value of the assets.
In a hyperinflation, savings and fixed incomes are destroyed. That is, much of the assets of prudent individuals is destroyed. We would enter the Depression later, but most of us would do so without any nest egg which would have been demolished by inflation. Further, the mal-investments and mis-allocations go on longer, making the pain and recovery from the Depression that occurs that much harder.
INSANITY..........
My house is under water, for sure
My car is upside down, you bet
But I'm getting me a consolidation loan
And finally getting out of debt
Pray for leaders in your home, community, church, state, and nation.
SEVEN REASONS THE MARKET MAY TUMBLE.........
Breadth is lagging.
Eighty-five percent of S&P holdings trade above their moving averages.
Only 3% of S&P holdings are oversold.
Volume is dropping (and is unconvincing).
New highs are making lower lows.
The transports are signaling problems and slowdown ahead.
The Russell 2000 has begun to noticeably underperform iShares Russell 2000 Index Fund (IWM_), down almost 2% even though S&P cash was down only 6.5 points.
These are not typically the ingredients for a durable leg higher.
IMPOSSIBLE......
Most of the political class recognizes the impossibility of solving the debt problem. It is too far gone for them to deal with. They have committed to a strategy of keeping the dead economy alive for as long as possible. The patient is clinically dead and should be removed from the respirator. Instead, the political class will pretend and extend for as long as they can get away with it. They will continue to benefit while the rest of the country is plundered even more.
The unavoidable Depression will occur regardless of their actions. The only issue is whether it is triggered by a massive inflation or a debt collapse. An immediate debt collapse would be less painful for the citizens than hyperinflation. In a debt collapse, balance sheets are cleansed and the economy is purged of much of the mal-investment and mis-allocation that has built up over the last couple of decades. The liability side of balance sheets shrinks to the underlying value of the assets.
In a hyperinflation, savings and fixed incomes are destroyed. That is, much of the assets of prudent individuals is destroyed. We would enter the Depression later, but most of us would do so without any nest egg which would have been demolished by inflation. Further, the mal-investments and mis-allocations go on longer, making the pain and recovery from the Depression that occurs that much harder.
INSANITY..........
My house is under water, for sure
My car is upside down, you bet
But I'm getting me a consolidation loan
And finally getting out of debt
Pray for leaders in your home, community, church, state, and nation.
"It is no measure of health to be well-adjusted to a profoundly sick society."
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