Forum Replies Created
February 8, 2014 at 12:07 pm in reply to: Debt Rattle Feb 7 2014: Why Is Up Always Good And Down Always Bad? #11155
Late July 2008. Hank pointed at his pocket bazooka and the S&P stabilized. The bulkhead groaned as incoming water stressed the rivets. But she held steady. The band played on.
But I&S were hard at work. They’d lifted a few curtains. And I was beginning to doubt the strength of the superstructure. And then I clearly remember watching a Charlie Rose interview with the junior rising star senator from Virginia — Jim Webb, a man known for speaking his mind in clear unambiguous language. It’s too bad that you can no longer watch that interview in full without paying for it, but he breaks the news with the glint in his eyes and the twitch in his mouth — the little people trapped in the lower decks were about to become fish meal. There is a reason everyone looks quite calm in the photo of the famous “hair on fire” Congressional Crisis Meeting from September 18, 2008.
Not a single person in that room is even slightly surprised by events on the ground. The air of authority stems from more than an a weak reference to Rome’s 16th century Baroque-Styled thought control. These are people who’s money is safe.
Fast forward to Obama’s State of the Union and the rollout of MyRA.
“MyRA guarantees a decent return with no risk of losing what you put in.”
Every single word in a State of the Union speech is scrutinized 3 ways from Sunday. Why would POTUS remind the people about, even indirectly, that they might lose their money in the markets?
Take your protein pills and put your helmet onFebruary 8, 2014 at 11:23 am in reply to: Debt Rattle Feb 7 2014: Why Is Up Always Good And Down Always Bad? #11151
Quick: Where were you and what were you doing between August 8, 2008 and August 24, 2008?
Me? I was on my honeymoon in Hawaii. Swimming in cool pools and soaking in a hot tub at the foot of Mount Waialeale. All was calm and quiet. Birds were chirping, the Olympians strutted and twirled on TV, the food was good and the sex was excellent. But I still couldn’t stop biting my nails. Money was moving and I knew the world was about to change. I’d been reading TAE for 2 months, and it was very clear a global colon cleansing was coming due in September. It felt so surreal. The calm before the storm. A burp and gurgle from deep in the abdomen. Here we are in 2014. Two weeks of lean muscle once again marching, flipping and climbing podiums. Behind the scenes, money is moving once again. My nail tips are history. The raw reddened puffy skin tells me we’ve returned to where we come from.February 7, 2014 at 12:40 pm in reply to: Debt Rattle Feb 6 2014: Remember “Uncharted Territory”? #11135
Fed members function more as Vaudeville stage managers than economists or analysts. Knowing when to deploy the dry ice “smoke”, lower the curtains, signal the orchestra, and cut the lights — all that stagecraft is what’s called for when applying for “governor” promotion status. And like a delusional stage hand climbing his way up the Great White Way, confusion and depression dominate when lucky timing collides with an awful performance. You can fool some of the people some of the ……..February 6, 2014 at 9:08 pm in reply to: Debt Rattle Feb 6 2014: Remember “Uncharted Territory”? #11120
Your commentary is a beauty. Ramming speed: Spin, meet anti-spin. The gamma rays are killing me, but they’re warm too, and it’s cold outside.
What will be the leverage for such a dramatic shift? Is it really that much of a shift? The only source of wealth for 90% of the US population (its home) is already a government backed savings vehicle. The fervent discussions regarding debt forgiveness to eliminate negative equity will be revived. Banks holding the mortgage paper and its related derivatives will vaporize and those that survive will effectively be post-offices. In the wake of 1000 Berni Madoffs soon to be unmasked, the public will demand it. The folks in power may use simplistic language, but the upper echelons know that private institutions leveraged 8x beyond the size of the national economy are long past the point of no return. When those gambling dens vaporize, so will a significant fraction of the global leverage trouble. The sovereign state that remains is the backbone of civilization, and negative interest rates are going to deleverage it. The critical infrastructure will still exist. And there will be plenty of people looking for work to maintain it.
Schiller is very clearly laying out the foundation of what will emerge post impending crash. Very well connected guys like him are already looking past the smoke and the rubble what’s about to hit us. It will be mandatory government-backed savings, periodic negative interest rates, and electronic money. Cash won’t survive long after the tsunami wave hits the beach. Be ready to spend it.
Robert Schiller promoting Negative Interest Rates and Electronic-Money (because you can’t have one without the other). And he does it in his typical veiled way, but its in there.
Negative Interest (see 2min 45sec — 4 min):
Electronic Money (see 7min — 8min)
This is a spectacularly frightening and entertaining whodunit from golem xiv. Death and derivatives. Check it out!
Combine this (see link below and have fun with the zoom), a database of facebook photos, and smartphone GPS location. Gotcha.
2 am. You’re sound asleep after a long day of protest.
Knock knock on the door.
What do you get when you combine Drones, Hi-definition digital cameras, and facial recognition databases?January 25, 2014 at 1:55 am in reply to: Debt Rattle Jan 24 2014: Argentina Returns to Villa Miseria #10772
In case you were wondering…..
https://articles.latimes.com/2010/jan/24/business/la-fi-lazarus24-2010jan24January 25, 2014 at 1:41 am in reply to: Debt Rattle Jan 24 2014: Argentina Returns to Villa Miseria #10771
Cash in your pocket, but you can’t buy a tuna sandwich on an airplane, even if you offer the stewardess a $100 bill (keep the change). What happens when Walmart charges an extra 30% to pay with cash?January 25, 2014 at 1:15 am in reply to: Debt Rattle Jan 24 2014: Argentina Returns to Villa Miseria #10770
The trouble with gold and silver and paper currency — Counterfeits. For a currency to work, it needs to be credible in the absence of extensive counterfeiting checks. That has been true in recent time, but it only takes a few examples to send a chill though the hearts and minds of merchants. Gold-plated tungsten? Silver plated cupronickel? Nobody wants to hold an empty bag, and if the cost of verifying is prohibitive, then the medium of exchange ceases to function, and is replaced. Paper dollars, junk silver, and official coinage are very vulnerable to a tiny bit of scare mongering. And then it’s plastic and electrons or nothing. Or cases or Pepsi.January 24, 2014 at 8:40 pm in reply to: Debt Rattle Jan 24 2014: Argentina Returns to Villa Miseria #10766
The #1 driving factor to E-money: Negative interest rates. You can’t have cash in a world where bank deposits cost money, as they must when T-bill rates drop below 0. Cash transactions will need to be penalized to equal the playing field.January 24, 2014 at 8:32 pm in reply to: Debt Rattle Jan 24 2014: Argentina Returns to Villa Miseria #10765
@ Variable. The deflationary cash crunch will create a surge in concern over counterfeits, tax avoidance and petty crime. E-money fixes that — there’s a traceable starting point and chain of ownership for every unit. (See Sweeden’s example). Old paper notes will become illiquid as increasing #s of vendors balk at acceptance (due to storage and verification costs) and plastic notes and e-money become the norm.January 24, 2014 at 5:20 pm in reply to: Debt Rattle Jan 24 2014: Argentina Returns to Villa Miseria #10762
I agree, Bit-coin sounds clumsy. Old fashioned before its time.
How about some sea food:
Squid, Octopus, Oysters. They all sound yummy to me.
And yes, the notion of the squid controlling my money, that makes me giggle too.January 24, 2014 at 5:06 pm in reply to: Debt Rattle Jan 24 2014: Argentina Returns to Villa Miseria #10761
Cash is Dead. Long live E-Money.
Think back to the year 2000. If someone said the word, “Google”, you’d suspect they were choking on an air bubble.
How about Facebook in 2005?
How about Twitter in 2007?
Have you noticed the recent proliferation of the word “Bit-Coin”. Forget the specifics, the news is never intended for that. It’s role is the dissemination of memes. Your cash is getting moldy. Better spend it while you still can.
More from Martin:
Physical cash will soon be gone. We’re going digital. Negative interest rates require it.
The short end of the Treasury curve will go significantly negative in the next leg down for equities. You want the medium dated 3-year and 5-year T-notes. Mario Draghi and Larry Summers have now floated the trial balloons on negative interest rates. They will require severe restrictions on cash and bank fees galore.
To I&S: How far into the future do we need to go to imagine scrappers and strippers prying apart the complex metal alloy turbines at the three gorges damn, to sell the scrap shreds on the black market for pennies on the dollar of production cost. That is a mad max world. Is it 10 years hence? Or 50 years? Do you venture to even guess at that sort of thing?
Within a few months, investments offering safe 2% yield will be hard to come by. And a 5 year time horizon is just about perfect. The likelihood of a US default within 5 years is nearly zero. You can sit and stare out the window with 2% nominal with 3-5% real. If you want to cash in your chips early, 15-25% capital gains are a certainty. Evidence? Look at how the 1-month Treasury Bill has regularly dipped negative in recent days when the market dips from all-time nominal highs. A year or two from now, the 5 year note will be yielding close to zero.
When the 5-Year Treasury Note hits 2%, buy it. We won’t see 2% CPI for many years. And after June 2014, the CPI including food and fuel won’t see 1% for a long time to come. Current 5-year note yield is about 1.7%. We’ll get to 2% later this year. The equity market still has momentum and Treasuries will lose a bit more ground before the trade of a lifetime emerges. Everyone save Gary Schiling hates long dated Treasuries. And that’s exactly where you want to be.
As Rapier noted:
“Don’t forget that certainly some very wealthy Chinese are surely working overtime to move their assets out, which is where the JPM’s of the world might be playing a part. ”
This plays into Martin Armstrong themes. There is nothing surprising about the equity markets’ disconnect from economic fundamentals. It is what’s expected at this stage in a cycle. Martin’s research suggests the migration to equity type assets is common to all bubbles at this stage. Trying to understand why the S&P reaches new highs while the common man gets poorer is useless. The two have nothing to do with one another. If you want to understand, look to the real estate developer in Hunan province and the rail road builder in Xinjiang. Ask the 5th generation cement maker in Provence and a 6th generation ferry operator in Heraklion. Old money and new money looks for a place to roost during the coming storm. The S&P 500 is deep and the breakwater is firm. Here is where you park your grandfather’s savings.
Go back to 2009. Align Prechter and Armstrong. Both argued for years of virulent deflation and dollar strength. Prechter went all in on stock collapse call because of deflation. Armstrong said just a vigorously that the equity market would see new highs because of deflation. Armstrong also called the market highs and subsequent collapse in Gold and Silver. The man understands.
The market has rocket fuel behind it, and it has nothing to do with the economy. Never has been. It has to do with moveable assets in a time of crisis. Marty lays it out better than anyone.
Forget Robert Prechter.
Martin Armstrong has been right all along. And he writes better.
The viscosity of money flows…….Yes! A key point.November 4, 2013 at 11:50 am in reply to: How Can We Have Record Bad Loans And Record Excess Liquidity At The Same Time? #8953
Growth stopped but only the poor have been forced to pay.
The rich must pay as well.
That’s when it gets interesting — when the 0.01% begins to cannibalize the 0.1%. Gloves off.
Turtles all the way down.October 23, 2013 at 4:26 am in reply to: Reply To: Re: The IMF Proposes A 10% Supertax On All Eurozone Household Savings #8902
To make the sell, they need two sthings to happen that appear to be mutually exclusive:
1) A massive wave of municipal bankruptcies that wipes out the retirements for millions of Americans
2) A rising stock market so Bloomberg and CNBC and Senators can pitch the value of stock investing to millions of wiped-out or terrified municipal bond investors and Joe-the-Plumber types whose meager income will be siphoned-off into mandatory stock investing schemes (for his own good, of course).
I don’t see how (1) and (2) can happen at the same time. The coming months will be interesting.October 23, 2013 at 4:15 am in reply to: Reply To: Re: The IMF Proposes A 10% Supertax On All Eurozone Household Savings #8901
@ Rapier, Very good point.
The US is moving slowly toward entitlement reform = cutting social security and siphoning off a dedicated fraction of middle class income toward a new tier of state-mandated retirement savings in the stock market.
Herein lies the great drama for democratically elected political leaders. They can’t build the political coalition for a new tier of mandatory retirement savings in the stock market without a financial crisis that frightens and disorients the masses. But that financial crisis will obliterate the willingness of dizzy people to let their hard earned savings be gambled away on here-today-gone-tomorrow stock prices. It’s a real conundrum. Better prepare the water cannon and rubber bullets.October 20, 2013 at 5:03 pm in reply to: Winter In America Gets Colder : Why We Choose Poverty #8897
An update from the exchange markets:
Washington DC. The President confirmed his commitment to a strong handshake. There have been concerns that the handshake could weaken if the Central Bank continued its policy of empty gestures.
In other news, the French Kiss tumbled as word spread of a Mono-outbreak. Traders shunned the sloppy garlic-flavored spittle for the security and stability of a steely eyed Norwegian stare.
This weekend, all eyes are focused on Silvio Berlusconi’s Sardinian pleasure palace. For weeks, interest in Mediterranean styled slap-and-tickle has grown, and traders want a piece of the action before the party’s over.
The Russian bear hug squeezed out gains.
And finally, from Basel, International regulators continued to flex their muscle, prying open the once cloistered doors of the exclusive Swiss Exchange. Police were seen leaving the premises with boxes of whips, chains, and leather gimp suits. Swiss Bankers maintain that secrecy is paramount, and, for the sake of global financial stability, the identities of market participants can not be shared.
That’s it for the weekly exchange update. As always, a reminder to the audience: The exchange markets are for consenting adults. When the action heats up, you can quickly lose your shirt.October 16, 2013 at 9:04 pm in reply to: Nobel Winner Robert Shiller Demolishes UK's Help-To-Buy Scheme #9341
How to dispose of a bad loan.
I’m feeling anxious. I’m feeling sick to my stomach. People are getting lazy, sloppy. Somebody’s going to get hurt. Now listen to me. You want to be a part of this family? You want to play with the big boys? Watch and Learn.
You make a bad loan. Boom! It’s done. Move-on. Don’t sit on that paper. You get 3 billing cycles before it starts to putrefy and stink. And then what? You plan to let that paper moulder, and the ink run all over the trunk of my Cadillac. No way. That’s how mistakes are made my friend.
Step one, you get me a wood chipper. I’m talking Fargo here. I want that loan chopped up nice and fine. Unidentifiable.
Step two, you find me some nice car loans, respectable types – you know what I’m talking about. Assitant branch manager for municipal accounting and his nice new Hyundai Sonata. Boom! Into the chipper with the rest of that scum. Mix it up good.
Step three, let me introduce you to my nice political friend here. He has in mind the best interests of our fine elderly blue collar chumps. And, by the way, he has a certain deviant interest in pregnant marsupials and finely chipped untraceable high-yielding paper. What can I say? The man knows his mulch. He’s going to take that chipped paper, and spread it all around the flower beds of our fine local retirement communities. And from all those deceptions, back room deals, cheating, and corrupt money laundering, we’re going to grow ourselves a nice garden of roses. And when they bloom in the spring, we’re going to gather round, shake hands, and breathe deeply to appreciate the finer subtle things of life.
And if anybody asks any questions, Boom! You make them a payday loan and into chipper they go.
We’re family here. We look out for one another.
Went for a brisk stroll in a county park in Kent County, Delaware. Noted that the parking lot was carpeted with nearly equal parts squashed Woolly Bear caterpillars and live Woolly Bears attempting to cross the treacherous asphault terrain separating one grass patch from another. Observed with interest that children pointed-out to their parents the mass migration in our midst, and then observed SUVs containing said children proceeding to plaster a good 10-20 wriggling furballs under rubber tread as vehicles exited the parkland. Isn’t mother nature fascinating? Living beings responding to non-negotiable instinctual migratory patterns. Other living beings beating a path to the local waffle house for breakfast, caterpillar guts smeared and caked into the tire treads as a consequence of the need to fill bellies with cake batter and syrup. But we all agree to feign guilt and sadness when the BBC casts its mircoscopic lens on the anatomy of the agony. I wonder if the BBC documentary costs could have saved a good 100 wooly bears, at least.October 11, 2013 at 12:39 pm in reply to: Your Pension Is Under Attack From All Sides. Here’s 10. #9321
The metals — both base and precious are deep in Bear Market Territory revealing a 56% – 25% price collapse in 2years. Hardly indicative of credit growth and price pressure. Rather, overcapacity and credit contraction is the overwhelming conclusion.
Lead: $1.25/pd in ’11 — $0.93/pd in ’13 (25% drop)
Nickel: $12.50/pd in ’11 — $6.27/pd in ’13 (50% collapse)
Zinc: $1.10/pd in ’11 — $0.85/pd in ’13 (33% fall)
Aluminum: $1.10/pd in ’11 — $0.85/pd in ’13 (33% fall)
Copper: $4.50/pd in ’11 — $3.23/pd in ’13 (29% drop)
Silver: $48.7/oz in ’11 — $21.77/oz in ’13 (56% collapse)
Gold : $1771/oz in ’11 — $1309/oz in ’13 (26% drop)October 10, 2013 at 11:30 am in reply to: Your Pension Is Under Attack From All Sides. Here’s 10. #9311
The small remaining fraction of middle-class discretionary income has already been promised to big-biz. The unclamied piece of your pay check belongs to new Aetna premiums, carbon taxes, and supplementary mandatory retirement investments with Blackrock. I’m sorry, but JCPenny and Walmart got the short end of the stick. Prices will continue to fall below their basement margin requirement. Pricing pressures are now governed by flea-market dynamics. He who sells first gets the cash. He who sells last goes bankrupt. Love seats for $10 and Lay-Z-boys for $5. NFL flat screens for $3.50. When it comes down to sizzled pork or Sunday gridiron, I’m afraid there’s no competiton, even if you promise the grizzled masses an endless supply of concussions and fractured femurs for their viewing pleasure. In the end, a growling stomach will trump the vicarious pleasure of witnessing writhing pain among ethnic minorities.October 9, 2013 at 1:16 pm in reply to: Gordon Gecko Moved To London To Finish Where He Left Off #9301
“The current shutdown in the US is nothing but another piece of theater performed for this purpose. Capitol Hill will do what Gordon Gecko tells it to. He owns the Hill.”
This theater is setting up a great profit machine for the Geckos. Like proper Hollywood A-listers, Obama and Boehner should demand a % of the gross on the back-end. With the 1-month t-bill rate now > 0.3% (it was 0.01% a few weeks ago), geckos are poised to rake-in taxpayer dough on a totally risk free bet. Baring meteor strike, there is 0% probability that the interest won’t be paid on 30 day t-bill.
On Tuesday, the Treasury Department sold $30 billion of 1-month T-bills at roughly 0.35% interest. If my math is correct, that’s about $9 million in rent on money that should have been virtually rent free.
The ripple effect in the derivatives markets must be massive. How much do you want to bet that pension funds take the wrong side of bets in those opaque markets. CDS on 1-month T-bills anyone? (selling fire insurance on concrete block houses).October 9, 2013 at 12:46 pm in reply to: Your Pension Is Under Attack From All Sides. Here’s 10. #9299
Like debt, waist lines face impending mean reversion.
One could draw a modified hubbbert’s curve of %belly fat and overlay it on the oil production curve with a 5 year time shift. The coordinated mass production, distribution, and infusion of simple sugars into the bloodstream of the poor becomes the terminal blowout phase of Diocletian State-Corporate Expansion.
Here is a Studs Terkel interview with Great Depression survivor Peggy Terry:
“we’d been going to the soup line for about a month, we’d go down there, and if you happened to be one of the first ones in line, you didn’t get anything but the water that was on top. So we’d ask the guy that was ladling our the soup into the bucket everybody had to bring their own bucket to get the soup and he’d dip the greasy watery stuff off the top, and so we’d ask him to please dip down so we could get some meat and potatoes from the bottom of the kettle. And he wouldn’t do it. So then we learned to cuss and we’d say, “Dip down, God damn itl”
———————–October 9, 2013 at 1:00 am in reply to: Your Pension Is Under Attack From All Sides. Here’s 10. #9295
Doctors fear we’re on the verge of an epidemic in Type 2 Diabetes. Little do they know, we’re about to conquer that scourge. The future of medicine is Cholera and Scurvy.
Demand is what you can afford.
When US oil demand collapses 75%, consumption could be supplied by domestic conventional supplies. The value of the dollar vs. the yen vs. the ruble won’t have much relevance. The woman on the street will be preoccupied with the weight of earthly possessions balanced precariously on her head.October 6, 2013 at 9:25 am in reply to: Your Pension Is Under Attack From All Sides. Here’s 10. #9283
Steven Rattner, Former New York State Pension Investment Manager and Obama’s Car Czar, is very concerned for your well being. He’s terribly worried that you’re going to hurt yourself. Please, for the sake of your children, give your savings to professionals like him (see 2 min — 2 min 21 seconds).
And by the way, Steve Rattner’s $6 million in kickbacks to criminals to play with New York State pension money was totally legal and ethical, despite what his business partners said to the SEC. See the first minute.
It’s too bad Governor Cuomo had his spine removed. Back in 2010, he had Rattner scrambling.
October 6, 2013 at 2:10 am in reply to: Your Pension Is Under Attack From All Sides. Here’s 10. #9281
Feed me, Seymour.
You don’t look well. It’s time for another bleeding.
3 min 24 sec — 4 min. The talking points have been prepared. The laws have been written. All that remains is timing the media blitz.
Let us help you. We need to save you from yourself. From Businessweek magazine: “Is it time for Mandatory Savings?”
“The retirement savings system isn’t working, especially when it comes to low-income and moderate-income workers…….Larry Fink, founder and chief executive officer of BlackRock (BLK), which manages more retirement money than any firm in the world, calls for a mandatory retirement savings plan……..Mandatory defined-contribution would constitute a second layer in a retirement savings pyramid, above a first layer of Social Security and below a third layer of voluntary savings,”October 2, 2013 at 3:47 am in reply to: Reply To: Re: How To Maximize Your Investment Losses In 5 Easy Lessons #9271
Net worth survey of the readership. Let’s dispense with the illusion. We’re not equal.
How much are you worth?
I’m willing to stake my claim. Let’s assume the same ambiguity that current members of Congress use to cloak their assets and liability mix. If you’re in the $5m – $20 m dollar range (then good on you, clearly grandpappy worked hard to provide for his offspring).
If youre’ in the $0.5m -$5m dollar range (then congrats to you too).
If you’re in the 0.0m-$0.5m dollar range, then i’d be curious to know.
If you’re in the negative equity range, then that’s worth knowing as well. Let’s cut to the chase. For each bracket, the range of recommended behaviours varies. If you’re worth $0-200,000, then your freedom of action is dramatically different than someone worth > $500, 000 . Let’s not pretend to lump one another together. Let’s enunciate our differences in the interest of delineating the appropriate course of action for each grouping.