Guest Post: The Last Gasp Bubble of

Tyler Durden's picture

Submitted by Todd Harrison Of Minyanville

The Last Gasp Bubble of

When I began writing ten years ago, I would offer that the opposite of love wasn’t hate; it was apathy.

shared that thought after tech stocks dropped 40% in less than two
months and then recovered half those losses the next two months. We all
know what happened next; the tech sector melted 70% the next few years.

and rinse, Pete and repeat; we’ve seen that sequel again and again and
again. From the homebuilders (real estate) to China to crude oil, a
“new paradigm” arrived. Every time was different and each offered a
fresh set of forward expectations that would finally prove historical
precedents need not apply

Click to enlarge

traded all of those bubbles thinking quite sure they would follow the
path of false hope and empty promises paved by their predecessors. That
proved true as the real estate market crashed, China imploded under the
weight of the world, and crude crumbled just as it seemed ready to
stake claim to the new world order. (See: Oil of Oy Vey)

Sisyphus Now!

While those bubbles hit home for many Americans, they’re hardly unprecedented through a historical lens.

There was the tulip mania in 17th century Holland as Dutch collectors hoarded a hierarchy of flowers.

The Mississippi and South Sea bubbles of the 18th century emerged in the wake of Europe’s dire economic condition.

roaring twenties, fueled by an expansive use of leverage, led to the
crash and Great Depression while not necessarily in that order.

And there’s Japan, perhaps the most frequently referenced modern-day
parallel of our current course. The land of the rising sun boasted one
of the strongest economies on the planet before a prolonged period of
deregulation, money supply growth, low interest rates, bad real estate
bets, and “zaitech” (financial engineering) creating a virtuous cycle
of speculative frenzy that ultimately collapsed the country.

Does any of this strike a chord?

familiarity breeds contempt, the percolating societal acrimony
shouldn’t come as a shocker. Albert Einstein said the definition of
insanity is doing the same thing over and over and expecting a
different result. That most certainly applies to our financial fate but
as with most journeys, the destination we arrive at pales in comparison
to the path we take to get there. (See: What In the World is Going On?)

Federal Reserve chairman is a student of history and well versed on the
passion and plight of financial excess. We’ve witnessed extraordinary
stimuli intended to shift the natural course of the business cycle, one
that long ago lost its way. While policymakers conceivably “saved” the
system, the resulting imbalances pose a fresh set of issues for the
global socioeconomic spectrum.

I’ve repeatedly offered that
the financial crisis hasn’t disappeared; it simply changed shape.
It--for lack of a better analogy--has gone airborne, migrating from the
tangible to the amorphous, from Wall Street to Main Street, from a
distant coexistence to an emerging class war. It, like most viruses,
will arrive in waves and infect those who haven’t been inoculated with
a steady stream of financial consciousness.

Gauge your
internal reaction to every opinion you read or hear, multiply it by
millions and you’ll begin to imagine the magnitude of the shifting
social mood. While the recent stock market rally reflects renewed
optimism that can conceivably continue the chasm between perception and
reality is widening; while the tape can run, we, the people are running
out of places to hide.

That’s not to say we should lose hope,
quite the contrary. The greatest opportunities are born from the most
profound obstacles and this will again prove true. The trick to the
trade and a pathway to prosperity won’t be found by those wallowing in
the “why,” pointing fingers and placing blame; they’ll be conceived by
those proactively positioned, readily prepared and steadfastly aware of
what lays in wait.

The leaders coming out of a crisis are
rarely the same as those that entered it and the ability to add
capacity into a downturn will define the winners on the other side. We
must reward those who saved, incentivize those who are motivated and
punish those who’ve transgressed. Until there is culpability for
wayward decisions, there won’t be motivation to change behavior and
rebuild society from the inside out.

Therein lies the rub of our
current course; innovation and entrepreneurialism are integral parts of
the solution but many of those in a position to effect positive change
don’t have access to capital. While credit worthy borrowers may be a
rare breed—and lowering those standards were the root of the
problem—the obligations of many have muted the aspirations of most.

The Hot Tub Time Machine

maintained throughout our time together that the mother of all
bubbles—debt— would be the final frontier before free market forces
shocked asset classes back towards equilibrium. With total debt-to-GDP
stretched towards 400%, we reached the zenith of that elasticity in
2008 and the system unwound with great vengeance and furious anger; the
gig was up.

It’s hard to say what would have happened if we let
the market do what the market was in the process of doing. It could
have created a domino effect that toppled corporate America from JPMorgan (JPM) to General Electric (GE) to Target (TGT) to Goldman Sachs (GS) to AT&T (T);
the commercial paper market was frozen, payrolls would have halted and
citizens may have taken to the streets to feed their families.

We’re talking potential anarchy here and I’m not prone to hyperbole.

alternative scenario—the one the created a chasm of discord throughout
the land—was the evolution of the last gasp bubble, that of $800 billion here, $1 trillion there, numbers so
enormous they seem silly; the reality is they’re anything but. (See: Will the EU Bailout Work?)

we remain in the eye of the storm—the relative calm between the banking
crisis and the cumulative comeuppance—a simple yet scary truth remains.
We haven’t cured the disease; we’re simply masking the symptoms. (See: The Eye of the Financial Storm)

will again remind you that the opposite of love isn’t hate, its apathy.
We’ve noted the lower volume during rallies and the higher traffic
during the declines—a sign of distribution—but a simpler truth may be
emerging, that of burnout. After four—or five, or six—bubbles and
bursts, folks are both bitten and shy by the gamesmanship in the

Perhaps that’s a function of financial fatigue or
maybe it’s an intended consequence of the war on capitalism; to be
honest, it’s tough to tell. As the machines take over and the secular
bear chews through victims, it’s hard to blame the average American for
wanting to walk away. (See: The War on Capitalism)

simply say this; the greatest trick the devil ever pulled was
convincing the world he didn’t exist. While financial markets seem
docile or worse, backstopped by the powers that be for the foreseeable
future, the time to pay attention, remain engaged and prepare for
what’s to come has perhaps never been more acute.


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kato's picture

harrison is just a blow hard who writes kind of pretty with nothing to say, nothing to offer except circuitous prose

traderjoe's picture

Just like your comment?

russki standart's picture

I still recall Gibbon's famous definition of history as "little more than the register of the crimes, follies and misfortunes of mankind." So what has changed since the Romans, nay since Babylon?

Übermensch's picture

There still remains the "ultimate bubble"... 

Moonrajah's picture

Yup, it will be known as a Ponzilla of bublical proportions.

B9K9's picture

As Ginsberg posed in On the Road:

"Whither goest thou, America, in thy shiny car in the night?"

What he was asking of Kerouac, was what was the point (of their travels)?

So I ask, what is the point of these articles? Either the Fed successfully blows another bubble, in which case the US survives and we all get to party again, or it doesn't.

If the Fed is unable to blow another bubble, it becomes difficult to imagine the US remaining as a functioning political entity. Two possible outcomes in this scenario then become regional secession and/or military coup.

To discuss a popping of the government debt bubble in the abstract is to miss that we are indeed living though historical times.

MachoMan's picture

What other scenarios do you contend are likely if the FED, et al, cannot reflate the credit bubble?

Geoff-UK's picture

To quote Mister T from Rocky III:

"My prediction?  Pain."

Cognitive Dissonance's picture


I like you as a person and I respect you as a trader/investor. But like you said, you're been writing about this for 10 years. When will you remove the safety and comfort of your trader/investor hat and see the world as the vast majority do, from the bottom up, not the top down.

You're so worried about upsetting your primary readership of middle/upper middle class or better that you just don't have the balls to call the powers that be on the carpet. Oh sure, you've been outing them for years. You were one of the first main stream bloggers to declare the obvious, the plunge protection team was alive and up to no good. And I could list a dozen more examples of your bravery.

But that bravery only goes so far. After all, you have many Minyanville mouths to feed as you rub elbows with advertisers and investors. So you walk a fine line between calling out the ugly truths and demanding the ugly truths be changed, of bringing your considerable weight to bare. And of course, there are some ugly truths you just can't or won't talk about.

After all, your obsession with avoiding social upheaval leads you down the only path you can follow. That of enabling the insanity by not using your considerable power and loud and well travelled public voice to help stop the insanity. All that's left after taking that path is to justify to yourself your non action.

Yes, that's rather harsh. But Todd baby, when are you going to walk the walk rather than just talk.

VK's picture

Chaos and anarchy have only been delayed not avoided. Marginal returns across society are falling, the limits to growth have been hit. Peak oil, resource limits, financial ponzis all point to one inevitable conclusion -> Collapse. It's only a matter of when, not if.

downrodeo's picture

you know, a little anarchy might be just what the doctor ordered…  


personally, I would have preferred the food riots and breadlines if the exchange for that was the destruction of these ‘too big to fails’, especially since it’s the case that there is a decent chance that we will still see bread lines and food riots in our future. the difference is the degree of freedom that we will experience while standing in said bread line.

SWRichmond's picture

+1.  We have cemented in place the notion of the permanence of the oligarchy, and done so publicly, even overtly.  Is genuine reform even possible now?

spekulatn's picture

Agreed, downrodeo. 

    "What signify a few lives lost in a century or two? The tree of liberty must from time to time be refreshed with the blood of patriots and tyrants. It is its natural manure."

Apostate's picture

Nothing wrong with a little anarchy.

mcguire's picture

ok, todd, cd... i have no idea if this is what you both mean, but this is what i have come to know as true.  this sort of outlines it:

1.  the entire fabric of world history, and especially since the rise of central banking and the ascent of the nation state, has been manipulated by a select group of occultists/luciferians, who since the 1700s have been known as the 'illuminati', or 33rd degree freemasons.

2. the financial system is only one aspect of their domain of control.  it happens to be one of the realms where their control is particularly evident... and tyler, this goes for you too, the reason why we keep on watching, it is not just for profit... it is because in the financial world, the lies are so blatantly obvious, we are drawn to the truth, we cant look away, there is a DRIVE towards truth.  we see the numbers, and then see the spin on mainstream media, and we know the game is rigged, we see the hands behind the curtain...

3. the fact is, the final bubble IS coming, and the result will not be anarchy... at least not for long.  there will be just enough pain, gnashing of teeth, anarchy, so that the people cry out with one voice for salvation.. and it will come in the form of "one world government".  never forget, the illuminati motto is "ORDO AB CHAO"...

so, if this is indeed the conversation we are having, then this is my contribution.  yes, i am preparing, on every front.  and, what keeps me strong is the belief in two principles: 1.  love is stronger than hate... i disagree about apathy.  this fluoride induced indifference will be jolted one way or the other into action; there will be no sitting on the fence... we will all choose, and it will be towards the good or toward evil, and my guess is that these sick fucks have no idea how strong is the power of love, having brewed their hatred in the darkness for so long... the biggest impediment people have for not believing that 9/11 was a false flag event is that they cant believe that such evil exists (like you said, "greatest trick the devil ever pulled..").  but we will all wake up soon, and I think they have grossly miscalculated the human heart.  2.  the law of unintended consequences foils ALL plans...

if this is /not/ what you guys are talking about, then just leave me here to my tinfoil hat...

no say's picture

 in response to mcguire's post;

read the law of one @

it says that the Illuminati came to earth to offer mankind evil as a choice, so as to make choosing good a more potent tool of evolution . 


SayTabserb's picture

Ripper:  Ice cream, Mandrake?  Ice cream?

Geoff-UK's picture

Stuart Mackenzie: Well, it's a well known fact, Sonny Jim, that there's a secret society of the five wealthiest people in the world, known as The Pentavirate, who run everything in the world, including the newspapers, and meet tri-annually at a secret country mansion in Colorado, known as The Meadows.
Tony Giardino: So who's in this Pentavirate?
Stuart Mackenzie: The Queen, The Vatican, The Gettys, The Rothschilds, *and* Colonel Sanders before he went tits up. Oh, I hated the Colonel with is wee *beady* eyes, and that smug look on his face. "Oh, you're gonna buy my chicken! Ohhhhh!"
Charlie Mackenzie: Dad, how can you hate "The Colonel"?
Stuart Mackenzie: Because he puts an addictive chemical in his chicken that makes ya crave it fortnightly, smartass!

--"So I Married An Axe Murderer"

bonddude's picture

Perhaps Macke came to the same conclusion.

Haven't seen a MV article from him since mid-June.

"I'm going to speak to you like a child..."

spartan117's picture

Cannot believe your post was junked.  It was spot-on.

woolly mammoth's picture

Right on Cog Dis. Todd is reflective of our society. The all mighty doller comes first. Kill the doller (meaning fractional reserve banking), kill the beast. It is really hard to talk to most people about the true issues because they are so scared to upset the apple cart and every thing they have been told to believe.

Cognitive Dissonance's picture

We are all to some degree or another hostage to our own beliefs and our worldview. We wind up supporting a facade because we lack the moral, intellectual and spiritual courage to look beyond our own (purposefully) narrow point of view.

We become paralyzed by our own polarized consciousness.

trav7777's picture

I used to think that only America's way, way was right...

but now the Holy Dollar rules everybody's lives; gotta make a million, doesn't matter who dies

curbyourrisk's picture

He sounds so tired........


Good thing he don't work in the post office.

Cognitive Dissonance's picture

I just recognized that I might be poised on the edge and about to plunge into the sweet bliss of senility. Because it took me three different reads over 4 hours before I got your joke.

Now I'll just step outside and go postal if you don't mind. :>)

BlackBelt's picture

kondratieff winter...

crzyhun's picture

Bingo and could you expand on that?

Geoff-UK's picture

I'll expand on that.  What happened to Kondratieff will happen to the U.S. middle class.

Robert J Moran's picture

"It could have created a domino effect that toppled corporate America..."

The author says this like it would be a bad thing!  I wholeheartedly disagree!!

Cognitive Dissonance's picture

It would have hurt the author first and foremost. It would have hurt the author's employees and family. It would have destroyed the author's worldview. Thus is should not be allowed to happen.

This makes the author a party to the Ponzi, a willing participant at the same time the author bitches about the Ponzi.

RockyRacoon's picture

The whole thing is bad, but it's his bad.  N'est pas?

Wyndtunnel's picture

America's product cycle has reached its end.  To know what America's future will look like one need only take a glance at Brazil, China, India, Russia...  America and her Western allies pushed to globalize trade and now it is time for the countries that imported our labour to export their social problems back to us... Extreme gaps between the rich and the poor, rampant corruption of officials, gangster politics, and so on, and so on. 

At the end of the day does it really matter? Life will go on. The rich will continue to be jerks and the poor will hate them, and suffer, and try to tear down their castles.  Meanwhile many of those who break through and become rich themselves will join the league of jerks and perpetuate their age-old vendetta against the poor, in full denial of the exogeneous causes of their suffering now that they have moved beyond it. 

RockyRacoon's picture

People moving, going about their day,
People planning, knowing just what to say,
In one year we'll have money to spare,
And in five all we require,
In ten years we'll have a place of our own,
And in forty we'll retire.
So we do what we must, before we turn to dust.

aerojet's picture

All I can tell you is felt murderous outrage when I heard that Chelsea Clinton's wedding will cost $5 million and that $500,000 was spent on fucking flowers!  My net worth is so far below that half mil figure...well, it makes you want to do do...something.

The Clintons are some of the biggest crooks the US has ever experienced.  Bill Clinton put the massive housing bubble into motion.  He and his ilk have been the beneficiaries of a massive wealth transfer mechanism that is now impoverishing a large swath of the US population.  All I care to know is:  When does the revolt begin?  Our situation has nearly all of the initial conditions for a French Revolution type moment.


lynnybee's picture

good !  I'm glad you said it !!!   How did Bill Clinton go from earning $35,000 being Governor to being worth over $15,000,000 today !!!   I sure wish I knew so I could do it to & not worry about my elder years with no social security !!!   .......... Oh, I know !   He HOOKED UP WITH ROBERT RUBIN & LARRY SUMMERS !!   I may be old, but, I'm madder than hell.




Larry Summers is a Bilderberger, a member of the Trilateral Commission and a member of the Council on Foreign Rlations.

Robert Rubin is a Bilderberger and a member of the Council on Foreign Relations.

Bill Clinton is a Bilderberger, a member of the Trilateral Commission and a member of the Council on Foreign Relations.

Clinton is also a member of the Pilgrims Society as are all serving and former U.S. Presidents.

For more info about the Pilgrims Society see the free on-line book (PDF format) “Meet the World Money Power” by Charles Savoie.

PS: 911 Inside Job

trav7777's picture

chump change: Lakshmi Mittal spent like $70M on his daughter's wedding.

There is NO decency or shame anymore in anyone.

RockyRacoon's picture

What the hell else would he do with all that excess cash?  Give it to me and you?

We'd just spend it on women, dope, and other useless stuff -- or so they think.

There will be no changing that attitude in the top 1%.  I guess the good part of it is that some of the cash worked its way down to the flower shop, the waiters, the seamstresses, and the caterers.

Geoff-UK's picture

Guess who Chelsea's betrothed works for? 

Goldman Sachs.

Someone should make a conspiracy movie.

weinerdog43's picture

While I like Mr. Harrison's note, he leaves out a critical component, namely the prosecution of those that got us here in the 1st place.  If you don't punish the wrongdoers, they'll keep doing it over and over.  Hello!  Until I see Rubin, Summers, Cheney, etc... in jail, I won't be satisfied.

downrodeo's picture

Yep, my suspicion that Obama is a fascist was confirmed the moment he got into office and did not prosecute bush for war crimes. Still, it's very difficult to serve justice to those who own the justice system. Pelosi with her 'impeachment is off the table' bs, it all makes me sick.

resipsaloquacious's picture

Oh for fuck's sake, is Obama a socialist or fascist?  Can the Grand Poobah of the Teabaggers make up their mind already! 

Because he cannot be both.  They are at opposite ends of the political spectrum. 

downrodeo's picture

Sorry, poor choice of words. You can replace fascist with 'bad guy'. My point is that they're all on the same team.

Also, in my view, they're not necessarily opposites as they both tend towards totalitarianism, the true opposite of which is anarchy. I don't view the political spectrum as a line with communism and fascism on opposite ends, they're much more closely related when you view it on a scale of relative individual freedom. I think it is more accurate to view it as a circle or corkscrew.


ps, I am not a tea bagger, and i resent the implication. thank you. 

nhsadika's picture

Obama is a fascist (wolf) in communist (sheep's) clothing.   Obama is there to enable the use of the state for corporate and pseudo-corporate (military) powers.  He is also there to speak out about mundane useless things in pseudo-populist disguise (for the people).   What has Obama really done that is "communist" other than elect a bunch of pointless "Czars" (obviously the use of this name is to allude to communism while the truth is 180 degrees from).

Do you really believe Summers, Rubin, Bernanke, Immelt, Buffet, and a whole host of corporate pillagers have any communist intent hahahahhaah.


RockyRacoon's picture

I like your avatar!

Walked out this morning
Don't believe what I saw
A hundred billion bottles
Washed up on the shore
Seems I'm not alone at being alone
A hundred billion castaways
Looking for a home

barkingbill's picture

obama is as much a communist as limbaugh. there are just some who are little bit slow and think even sauron from lord of the rings must be communist. talk about one track minds. the military industrial complex grins as they steal more and more. 

RockyRacoon's picture


Communism -- a totalitarian system of government in which a single authoritarian party controls state owned means of production with the pro­fessed aim of establishing a stateless society; a theory advocating the elimination of private property. (The state holds power not only over property, but over every aspect of life. In practice, communism eventu­ally requires control over all human activities, for all of life is interrelated. If the state is to control one aspect of life, then it must control all aspects to be effective.)