Archive - Apr 13, 2015

According to the CMI, the Rejections of Credit Applications index just crashed the most ever, surpassing even the credit crunch at the peak of the Lehman crisis: "There is quite obviously some serious financial stress manifesting in the data and this does not bode well for the growth of the economy going forward. These readings are as low as they have been since the recession started and to see everything start to get back on track would take a substantial reversal at this stage.... The signal this sends is that many companies are not nearly as healthy as it has been assumed and that there is considerably less resilience in the business sector than assumed."

Former Democratic Sen. Bob Graham, who in 2002 chaired the congressional Joint Inquiry into 9/11, maintains the FBI is covering up a Saudi support cell in Sarasota for the hijackers - “One thing that irritates me is that the F.B.I. has gone beyond just covering up, trying to avoid disclosure, into what I call aggressive deception,” He says the al-Hijjis’ “urgent” pre-9/11 exit suggests “someone may have tipped them off” about the coming attacks. “The 28 pages primarily relate to who financed 9/11, and they point a very strong finger at Saudi Arabia as being the principal financier,” he said, adding, “I am speaking of the kingdom,” or government, of Saudi Arabia, not just wealthy individual Saudi donors.

Life and happiness in this life under any political system directly depend upon how much our individuality (versus the crowd) is retained and to what extent we throw off manipulated illusions. Fewer and fewer people have any cognitive imperative to question the system because hypnosis and learned behavior are transferred from one generation to another. False beliefs are self-perpetuating and feed upon one another. The more generations accepting myths, the more reinforcing they become. The creation of the mass mind and/or mass consciousness is the secret weapon of the ruling elite.

It appears more than just Chinese stocks are exploding higher...

The conventional class structure is divided along the lines of income, i.e. the wealthy, upper middle class, middle class, lower middle class and the poor. But this 3.5-class structure did not capture the changing nature of employment, income and wealth/political power; which more appropriately subdivides into America's socio-economic spectrum into nine classes. This is neofeudal, a term we use to describe a society and economy dominated by financialization and the apex of wealth and political power that wealth buys. The classes below this apex are either tax donkeys, Upper Caste technocrats serving the apex, or the lower classes that are bought off with social welfare and various modern iterations of bread and circuses.

"[GE] said it doesn’t expect its GE Capital unit to sell new long-term debt for at least five years, effectively eliminating one of the biggest corporate issuers at a time when firms around the globe are tapping the market at a record clip…"

In spite of the landmark decision 80 years ago against the imposition of economic fascism in America, the U.S. government has continued to grow in power over the American people. But it should be remembered that men of courage, integrity, and principle can stand up to Big Brother and resist the headlong march into economic tyranny. That unanimous Supreme Court decision in 1935 was one bright example of it.

Could never happen here, right?

The central bank-controlled 100% reserve system of sovereign money will indeed mitigate much of the fluctuations associated with modern day fractional-reserve banking. However, it is not a panacea against systemic distortions of economy. Centralizing any power, especially one as important as the creation of money, will inevitably lead to cronyism. And while perhaps less likely to occur than under the current system, there still will exist a risk government manipulation of credit markets which will lead to the business cycle.

Like many other towns in California, Santa Barbara is projecting a significant water shortfall in 2017. The solutions, being proposed for now, are extreme water conservancy, desalination plants, and sewage recycling following Jerry Brown's diktat that  "as Californians, we have to pull together and save water in every way we can." However, others insist that conserving water will not be enough, "I don't think we can really conserve our way out of this problem, this problem being a combination of drought and of incredibly high water demand by a growing population and climate change," warns NASA scientist Jay Famiglietti and environmentalists exclaim "we don't even know how much we need because we waste so much; we live in a total artificial world of water use and water supply." As we noted before, this is just beginning.

Moments ago, Tracy Sefl of the Ready for Hillary SuperPAC appeared on the Apple infomercial channel and said something confusing: "Hillary is certainly making it clear that she is running as a chamption for everyday Americans. People who are looking how to get by, get ahead, stay ahead." Unfortunately, Tracy had some significant problems defining who these "everyday Americans" are because one glance at Hillary Clinton's largest career donors reveals just who these "Everyday Americans" really are.

The new normal is a global faith in inexorable technological advancement as a cure-all to every predicament we face. In many ways, it's become the dominant religion of the 21st century. Sadly, there are a growing number of threats for which 'improved' technologies actually exacerbate the risks (particularly in regards to depleting critical resources) -- but society refuses to acknowledge this, as it runs counter to the tech-as-savoir meme so many are pinning their hopes on...

"In some instances, malfunctioning algorithms have interfered with market functioning, inundating trading venues with message traffic or creating sharp, short-lived spikes in prices as a result of other algorithms responding to the initial erroneous order flow."... "If liquidity is as bad as it is now, what’s going to happen when things really get adverse?” said Richard Schlanger, who co-manages about $30 billion in bonds as vice president at Pioneer Investments in Boston.

Think the market is overvalued? Believe US equities are artificially propped up by corporate buyback plunge protection? Wonder if a complete disconnect between stocks and economic fundamentals portends troubled waters ahead? Well, it will cost you to express your opinion via long puts, because as Bloomberg reports, S&P index downside protection is now the most expensive it's ever been relative to long calls.

There are in fact problems that are too big for Central Banks to manage.