Debt Rattle Jul 3 2014: Optimism Bias Cubed
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Harris & Ewing Crescent Limited train wreck near Kenilworth, DC August 1933 First, let me take a second to get back to my article yesterday, Optimism
[See the full post at: Debt Rattle Jul 3 2014: Optimism Bias Cubed]A new class of people has been created by our system.
I don’t know what label to use.
They will borrow money forever.
They do not fear the debt collectors.
They know that the debt collectors will not come to take what they have bought and consumed.
The debt collector does not exist.The old saying was, “You cannot get blood out of a stone.”
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If you do not want the system to crash, then don’t ask for the return of your investment/capital.
If you do not need your capital then don’t ask for it.
Only take the generated cash flow and the system will continue to live another day.
—Expropriation Is Back – Is Christine Lagarde The Most Dangerous Woman In The World?
https://www.zerohedge.com/news/2014-07-03/expropriation-back-christine-lagarde-most-dangerous-woman-world“There is no discussion whatsoever of reforming the system. They are merely planning to default on savers expropriating their savings, but continue to borrow forever. Nobody is even bothering to look at the structure that simply cannot work.
The money people have saved the IMF maintains should be used for debt service by sheer force. To reduce the enormous national debt, they maintain that government has the right to directly usurp the savings of citizens.
In the latest June 2014 working paper of the IMF, they have set forth yet another scheme – extending maturity. So you bought a 2 year note? Well, the IMF possible solution would be to simply extend the maturity. Your 2 year note now become 20 year bond. They do not default, you just can never redeem.”That “Labor Force Participation Rate” chart up there kinda resembles a Baby Boomer Pig moving through a Python. Also helps explain the rapid growth in Health Care Industries.
All said, on forecasting Human Action, which is really what unfettered Free Market Economics is;
“Prophesy is a good line of business, but it is full of risks.”
Mark TwainBut of course, the soothsayers at the IMF saw all this coming? OK, in hind sight!
On Micro-Managed Economies;
“The key to being a good manager is keeping the people who hate you away from those who are still undecided.”
Casey Stengal“NML would still have made a massive profit if it had agreed to the 30 percent payback rate. As it stands, Argentina’s ambassador to the US estimates that repaying the vulture funds in full would net them a 1,300 percent return on investment.”
Nice little return, if they can get it. Vultures are scavengers, usually taking what’s left over after the predators have taken the best stuff. In this case, they get the scraps and then, magically, they also get the whole carcass. Amazing!
“Yellen really is incompetent.” You’re far too kind; she sees just fine.
“Political language… is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.”
George Orwell
We’re living in the Matrix. Lies, manipulation, forced optimism and herd soothing.
Perpetual Motion
https://www.hussmanfunds.com/wmc/wmc140630.htm
Reverse Repo Games
Delivery fails surge in Treasury Market
https://www.zerohedge.com/news/2014-06-27/panic-behind-propaganda-why-fed-wants-you-sell-your-bonds
jeremiah – the Matrix, indeed. From Hussman: “Let me say that again. The Federal Reserve’s promise to hold safe interest rates at zero for a very long period of time has not created a perpetual motion machine for stocks. No – it has simply created an environment where investors have felt forced to speculate, to the point where stocks – despite their dramatically greater risk – are now also priced to deliver zero total returns for a very long period of time. Put simply, we are already here.”
The central bankers/media/government like to say, “Wow, look at the exuberance of the people,” feigning surprise when the herd moves. How do these guys keep a straight face when they’re saying it, knowing that they set up the game (in order to move the herd) in the first place? Herds move when a force is applied, and it usually contains a healthy dose of fear. They know this; that’s why they do it. Liars, all of them.
Good links. Thanks.
https://www.zerohedge.com/news/2014-07-04/stock-largest-austrian-bank-crashes-after-revealing-40-surge-bad-debt-provisions-rec
Largest Austrian Bank Crashes After “Revealing” 40% Surge In Bad Debt Provisions, Record Loss
“European banks will have no choice but to face up to their trillions in bad loans.
Erste Group, Austria’s largest bank by assets, and the third biggest bank in Eastern Europe after UniCredit and Raiffeisen, announced that, oops, its earlier forecast about the amount of bad loans on its books is wrong, and will have to rise by a massive 40%, leading to what will be a record $2.2 billion loss, and triggering writedowns.”WHAAAAAT! Someone is not playing by the new rules. They want their money back.
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