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Paul Farrell's New Normal: Bankrupt Nation. Deflation. Zeros. Junk. No jobs. Depression
Paul Farrell is in fine form today, doing a fusion of Gary Schilling's less than rosy newsletter, voiced over by Julie Roberts of "Eat Pray Love" (which gets appropriately mangled, courtesy of the LA Times to "Buy, Sell, Hope." Farrell asks logically: "Hope? What's that? Good news about markets? You buy,
you sell, you hope? Is "hope" America's last market strategy?" - read the full post for some good comedy on the issue).
Regardless, here is Paul Farrell's logic behind the "mashability" of the 17 recommendations (6 buys, 11 sells), and the final outcome, for the second half of 2010.
Let's blend the two. See if we can brighten some of Shilling's gloomier forecasts and recommendations for 2010-2011 with some of Gilbert's upbeat advice ... imagining "Pretty Woman" Julia, the Eat-Pray-Love lead, doing a voice-over for Gilbert. So here we go: First, Shilling's 6 "buys," then the 11 "sells," 17 strategies for 2010. He admits some mixed results, but he's "sticking with them for the second half" and on into the coming dark days of 2011. I'm sticking with Julia:
1. Buy Treasury Bonds: Stay with this big winner. Stockholders hate them, but this is a safe haven in the coming deflation storm on into 2011. Long maturities. Zero-coupons. Lower commissions. That's "Insight." Now imagine Eat-Pray-Love's Julia's voiceover: "There's no trouble in this world so serious that it can't be cured with a hot bath, a glass of whiskey and the Book of Common Prayer." Okay, guys would prefer an NFL game with his buddies and a Bud. Winners all around.
2. Buy Income-Producing Securities: Still viable. Stock market's gone nowhere for 12 years, says Shilling. Pick selective income-producers: utilities, drugs, telecoms, hi-grade munis, preferreds, etc. Buy direct or ETFs. Then Julia reminds us: "God never slams a door in your face without opening a box of Girl Scout cookies."
3. Buy Consumer Staples and Foods: Less volatility than S&P 500. Hey, you gotta eat, brush teeth, wash your clothes. Good bet in good and bad times. Julia agrees: "In a world of disorder and disaster and fraud, sometimes ... the meal is the only currency that is real."
4. Buy Small Luxuries: Stay aboard. Yes, discounts, house brands, frugality's in. But still, we all want the best of the little things, "cheap chic," say Gary and Fred. Not Julia's Girl-Scout cookies, treat yourself with favorite chocolates, wine, cigars.
5. Buy The Dollar: Should continue to rise. Bet on futures, puts, ETFs on the dollar index. Julia is patriotic and spiritual: "Faith is belief in what you cannot see or prove or touch. Faith is walking face-first and full-speed into the dark."
6. Buy Eurodollar Futures: Unbelievable winner, and more to go. And if you're traveling, Julia tempts with this mouth-waterer: "Please go to this pizzeria. Order the margherita pizza with double mozzarella. If you do not eat this pizza when you are in Naples, please lie to me and tell me that you did." Yes, it's all in your head.
Okay folks, that's it, only six Insight "buys." Here's what our Eat-Pray-Love guru might add when you buy-sell-hope: "You have every right to cherry-pick when it comes to moving your spirit and finding peace in God. You take whatever works from wherever you can find it, and you keep moving toward the light." Yes, even with these 11 "sells."
7. Sell U.S. Stocks in General: Declines likely to continue. In May, Insight warned the recovery was "Four Cylinders, One Firing." Only inventory was firing. Missing? Jobs. Consumers. Housing. Slow growth. All in "secular bear that started in 2000 and has years to run." Yes, years. Can you still be happy? Yes, says Julia's guru: "People universally tend to think that happiness is a stroke of luck, something that will maybe descend upon you like fine weather if you're fortunate enough. But that's not how happiness works. Happiness is the consequence of personal effort. You fight for it, strive for it, insist upon it." Harder in a recession, but you just do it.
8. Sell Homebuilder & Selected Related Stocks: More weakness ahead. And it will get worse. Millions mortgage-holders under water, can't sell, can't refi. Families in stress. Solution: Eat-Pray-Love and listen: "Real, sane, mature love--the kind that pays the mortgage year after year and picks up the kids after school--is not based on infatuation but on affection and respect."
9. Sell Selected Big-Ticket Consumer Discretionary Equities: Still vulnerable: Autos, appliances, hospitality. Rebates gone. Postponing purchases. Save, get frugal, flow with reality. Julia: "Every day a person is presented with not two or even three but dozens of choices ... our modern world has become a neurosis-generating machine of the highest order." Stop, make time to eat, to pray, to love.
10. Sell Banks and Other Financial Institutions: Remain vulnerable. Including Fannie, Freddie, regionals, small banks. More regulations. By 2014 bank portfolios have $800 billion mortgages coming due, two-thirds underwater. Huge impact on capital. Sell. What would Julia say: Eat in moderation, love, pray a lot.
11. Sell Consumer Lenders' Stocks: More declines in credit cards, etc. Americans save more, cut their borrow'n'spend binge. Reduce stress says Julia: "The only thing the mind hears all day is clanging bells and noise and argument, and all it wants is quietude. The only place the mind will ever find peace is inside the silence of the heart. That's where you need to go." You too.
12. Sell Low & Old Tech Capital Equipment Producers: Falling trend. Mega excess capacity. Capital spending dropping says Insight. Julia worries that you're holding onto the past: "You must find another reason to work, other than the desire for success or recognition." Your passion "must come from another place."
13. If You Plan to Sell Your House, Second Home or Investment Houses Any Time Soon, Do So Yesterday: Too much inventory, and fear. Warning: Down another 20%. Julia says you will survive because "somewhere within us all, there does exist a supreme self who is eternally at peace." That's your true home.
14. Sell Junk Bonds: Rally's overdone, warns Gary. Slow growth recovery, deflation fears, "lethal for many junk bonds." The "New Normal" cuts returns in half. We chase junk. Bigger risks. Julia: "That's your problem. You're wishing too much, baby. You gotta stop wearing your wishbone where your backbone oughta be." Accept the New Normal. Stop chasing deals like a teenager in heat.
15. Sell Commercial Real Estate: Got ahead of itself. Hotel occupancies down. Office vacancies up. Refinancing trouble looms. Maybe short REITs and ETFs. Julia knows our "world is so corrupted, misspoken, unstable, exaggerated and unfair, one should trust only what one can experience with one's own senses." Are you trusting Wall Street? Or your own life experiences?
16. Sell Most Commodities: Soft economy, soft commodities. Insight warns of "unattractive investments in coming years of weak demand, excessive capacity and soft prices." China's a big importer, aggressively tying up global supplies. Risky bets. So imagine you're lost and listen to your Eat-Pray-Love guru: "When you're lost in those woods, it sometimes takes you a while to realize that you are lost. For the longest time, you can convince yourself that you've just wandered a few feet off the path ... Then night falls again ... you still have no idea where you are ... you have bewildered yourself so far off the path that you don't even know from which direction the sun rises anymore." Are commodities taking you off your path?
17. Sell Developing Country Stocks, Bonds: They depend on exports, are vulnerable to global weakness. China overheating. Risks in India, Brazil, Vietnam, etc. Wall Street pushes overseas investing, they love the commissions. Warning, go slow cautions Julia: "Time, when pursued like a bandit, will behave like one; always remaining one country or one room ahead of you, changing its name and hair color to elude you, slipping out the back door of the motel just as you're banging through the lobby with your newest search warrant, leaving only a burning cigarette in the ashtray to taunt you." The only real winner investing overseas is your Wall Street broker collecting all commissions you pay.
And lest Paul be accused of being far too fatalistic, here is his conclusion:
What a combo: Warnings from Gary Shilling's "Buy-Sell-Hope" Insights
newsletter. Plus Girl Scout Cookie advice from our Eat-Pray-Love guru,
with "Pretty Woman" Julia Roberts' voice-over. Let's top it off with one
more of her jewels: "The Bhagavad Gita, that ancient Indian Yogic text,
says that it is better to live your own destiny imperfectly than to
live an imitation of somebody else's life with perfection. So now I have
started living my own life. Imperfect and clumsy as it may look, it is
resembling me now, thoroughly." Get it? The market, the economy, the
whole world may crash ... but will you crash with it? Or will you still
be the "best you?" Will you fulfill your destiny?
»
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ok, so Long Sustenance and Short Opulence (I has it).
and keep savings the monies
I have yet to not laugh every time he says "I johmp een eet."
blah, blah, blah...same ol same ol..i'll keep buying stocks while you whine...
WOW! Youre a-buyin stawks? Which ones?
http://www.telegraph.co.uk/finance/markets/7950771/George-Soros-slashes-exposure-to-US-equities.html
That just means more stocks left over for our friend bulbar. Get them while they're hot and in short supply.
Yet another talking head on CNBC referring to the "jobless recovery".
I sure get tired of that -- and I have a job! If the jobless actually have a TV left I'll bet they are pissed.
That's what the unemployment checks are for. Fuck the rent or mortgage. But they must be able to pay the cable bill in order to get their daily indoctrination and conditioning.
And I'm being completely serious. Seriously. :>)
You do that .. CNBC needs viewers.
homer,
They have viewers, all the Left Wingers watch...........all 3 million.
1% of Americans.
add MSNBC + cause i was one of them, up until 6 months ago. honest, dylan, chris, ed, rachael, keith. blinded, buying into NBC's propaganda, until i met U.
my sister made me stop calling obama, hopey over christmas in front of her (disclaimer, never has time to read, anything).
bulbar, then do so. Why waste your time here? You have buying to do.
Probably because you are really not buying. Because you have nothing to buy with so that makes you a troll.
See ya!
I'll believe in deflation when gasoline is $0.50 per gallon. Disinflation in levered assets is not the same as deflation.
Don't confuse supply and demand antics with a decrease in the money and credit supply.
@ spartan++
@ reave: clearly that is not a mistake spartan has made.
Regards
@ spartan
Yeah, I will follow suit when gasoline pierces the $ 2 mark on the way down...... per litre that is.
LMAO
spartan,
We will not have Deflation, I agree ( except in Durables).
All else is INFLATION, before Hyper Drive.
Wal Murt, has raised their overall prices 6% in 6 weeks, and some items as much as 60%............and it's ALL the things we must have to live,that are blowing out the roof.
Stuff at Wal Mart that went up...soap, various detergents, Windex... all this stuff can be replaced by using the detergent the Romans used... urine.
Next time you load up the washing machine just piss on all those clothes and turn it on. Whiter whites and no color fade. Fantastic. :)
Remember, you heard it on ZH first!
You taking the piss?
agree on the urine potential, it is a mordant (co_ol word). but really borax is the product to replace all things W A L M A R T . been walking around all day yesterday looking for this simple product, in this here Wholisteric than thou town. nope. got to go to Wall Mart, well Target really. that is the only drug store in rocks.
hahaha, deflation, what a brain dead fool.
When the US economy contracts enough, who the hell is going to service the US debt ?
Nobody is going to service the debt, we don't even need money printing to have hyperinflation. All we need is the bond bubble(that backs the dollar) to explode.
I know Peter Schiff has been "wrong" about the dollar for the last couple years but he was "wrong" about Fanny/Freddie for a couple years too. So keep laughing at Schiff and inflation, you will probably star in the next "Peter Schiff was right" video.
agreed, kapoom is coming.
Everyone clowning Schiff again as 'wrong'? Since the last time everyone was calling him nuts and the markets did implode, he's been 'wrong' since only because he didnt factor in financial terrorists actually printing and monetizing the stock and bond markets with $25 (or so) trillion dollars. These morons will be starring in the next 'Peter Schiff was right' video as they go on to claim they were short.
No, the next stars of "Peter Schiff was right" will be deflationists(dollar bulls) like Prechter,Denninger, Keen and Mish.
now, now children, there's plenty of clusterfuck to go around...1st Deflation THEN hyper to finish the survivors off....
You have a weird view of what hyperinflation is that I can't even begin to wrap my thoughts around. Please explain how we would get hyperinflation without money/credit expansion based solely on bonds exploding (interest rates rising)????
Hyperinflation can happen without massive money printing. Half of our debt is held by foreigners, if they start dumping the debt that backs our currency, prices will rise overnight.
As soon as they see there is no recovery, and that the interest rates can't be serviced they will all start dumping it. It could happen by the end of the year.
But you've got it entirely backwards. Rising prices without rising wages would be *deflationary* because economic activity and money velocity would slow down. People would have less money to service their existing debt, which would mean more bankruptcies, more debt destruction. Also, unemployment would rise, which is also deflationary.
In that case, Zimbabwe was in a deflation this whole time and we never knew about it!
PROTIP: hyperinflation never, ever, EVER comes about as a function of rising wages. NEVER. As in, not one time in all of human history. Wages ALWAYS trail the rate of inflation during hyperinflation.
Man, such ignorance. Zimbabwe had hyperinflation because wages went up. People were making $1B Zimbabwe dollars per hour. If wages didn't go up in Zimbabwe, how did people acquire the $100B Zimbabwe dollar notes??? If you say the government gave them away, then you are splitting hairs because government handouts can be thought of as wages (being paid for doing nothing). There is more ignorance about inflation/deflation/hyperinflation than anything else. Your statement is completely absurd. The only way hyperinflation can occur is by an exponential increase in the supply of money and credit that gets into the hands of the public.
Incorrect.
Just one example proves otherwise: the Argentinian semi-hyper-inflation of 2002. Granted, prices increased only by 300% within six months, but that devaluation occurred WITHOUT a concomitant significant increase in the creation of money. It was a loss of confidence in their (fiat) currency, and a flight from that currency, that led to its devaluation, NOT a 300% increase in the money supply.
But now we're arguing over the definition of hyperinflation. I would argue that Argentina did not experience hyperinflation (Zimbabwe or Wiemar Germany style) because the Argentine government pulled back from the brink and did not completely monetize the debt. Yes, prices went up but Argentines didn't have to pay $2B pesos for an egg. What happened in the Argentina was that the middle class got crushed, lost the value of all of their savings, and then the country went into a period of deflation and that 600% inflation rate came down.
Well, I am sure it is small comfort to all the Argentinian savers and investors who "got crushed" and lost most of their accumulated wealth, and standards of living, that they technically did not experience hyperinflation! There is not a giant difference between losing 80% or 90% of one's savings, and losing 99.999% of them.
By the way, I see what happened in Argentina in 2001-2002 as the most likely scenario for what will happen in the USA within the next two years.
It's called cause and effect. The rise in wages in that case was an effect, because the Zimbabwe central bank printed vast amounts of currency to buy foreign currency in order to pay down its debt. Foreign companies then used that money to come in and buy up all the goods in Zimbabwe as well as to bid up labor. Wages rose last.
You're only thinking about the money supply side. This money is a demand for goods and services. If less of these are created because people aren't working, prices rise because goods and services are in short supply.
H-inflation of a currency requires only one thing, loss of confidence. If (1) China looses confidence and sells its Ts (h-inf!), (2) if the debt can not be serviced and dollars are unmasked (h-inf!), (3) continued massive printing leads to increased straws across camel's back breaking into (1) and (2).
And there are so many increases in monetary velocity, which can create h-inf with NO more money printed. Just NO one wants to keep their Wealth in dollars, so V goes to the moon, and Purchase Power ($) goes to Zero. Practically overnight.
Did that help?
Okay, what you're saying is true but only if the government increases the supply of money and credit by printing money to buy the treasuries that the Chinese and others will supposedly dump - i.e. monetizing the debt. You contradicted yourself, because your point (3) implies what I said in my first sentence but then your second paragraph says no more money is being printed. You can't do (3), monetize the debt, without printing money.
If confidence is lost, it does not matter how much of a currency is in circulation... it would take an infinite amount of it to be exchanged for production or the manifestation of production. What keeps our confidence?
Look at it this way, if bonds denominated in a currency are universally shunned, what does that say about the confidence in the underlying currency? What reasons would cause someone to dump said bonds?
To put it differently, if I have a warehouse of... food and you bring me a dump truck full of dollars and want to exchange them for my food, after our international creditors have thrown in the towel on the dollar, then I will promptly send you the fuck home without any food because confidence in the dollar as a fruitful medium of exchange will have been lost. (I may do this anyway).
Read what others are saying to you, Mr. Dog. They are right. Don't confuse the amount of dollars it takes to buy, or how many are in circulation, with hyperinflation. Inflation, per se, perhaps. But not HYPERinflation. There are some preconceived notions that you'll need to discard to get on board the info train here.
I sometimes wonder if the word "hyperinflation" was invented by central bankers to purposely obfuscate and cloud what that process actually entails. So-called "hyperinflation" is not just accelerated inflation, or an escalation of what we normally call "inflation", but is the death of a currency! It really should be called "hyperdevaluation".
PS: Before the middle 20th century, what we now call "inflation", meaning the rising of prices due to the fall in the value of a currency, was universally and more properly called "devaluation". How inconvenient such terminology would be for the existing central banking power elite! Kind of like the Orwellian renaming of the "Department of War" after WWII to the "Department of Defense", despite the fact that it was precisely the pursuit of (aggressive, interventionistic) war that had become its reason d'etre.
It's almost as difficult as teaching Johnny you-know-who that gold is actually money.
...and just as fruitless. No discussions can proceed without an agreed to definition of terms. Do you recall a past discussion about gold and the commenter insisting that "stock to flow" did or did not mean what it actually means as laid forth by FOFOA? It was a hair-pulling experience. He wanted to redefine "stock to flow" according to his own terms, not those already established and agreed upon. Aaaaargh.
http://fofoa.blogspot.com/2010/06/how-can-we-possibly-calculate-future.html
Agree 100%, hyperdevaluation.
hyperinflation is not inflation+++.
hyperinflation is not inflation "squared"
hyperinflation is not inflation x5 or x10 or x20.
hyperinflation is not a monetary event/phenomenon.
hyperinflation = loss of confidence in a currency.
hyperinflation = evaporation of demand for a currency.
If OPEC drops the petrodollar and demands payment in Euros or gold, then the $USD will experience hyperinflation almost overnight... demand for $USD will evaporate.
If China starts dumping US debt (for any number of reasons), then the $USD will experience hyperinflation almost overnight... confidence in the $USD will plummet.
Again, the key thing to know here is that hyperinflation is not monetary in nature - it is psychological, and very real.
BINGO!
Just like the Euro in early June, as a currency gets sold off, it loses value and oil and gold get more expensive.
Spitz,
You got it..........the Junkers will get it..soon.
Which culture on Earth would claim entitlement to irrational optimism?
Maybe the new crop of bankster shills (GOP) can return God's favorite nation to greatness?
To the printing presses Batman!
USA is the greatest irrational optimists around!! As the rest of the world starves in vast numbers as the norm, these american genuises believe 'naw, it can never happen here! Something always comes to the rescue to allow us to live in pointless hedonistic opulence while the rest of the world gets by on peanuts, and so it shall be, forever and ever'.
One thing the US of A has going for it, SheepDog, is it is self-sufficient in food production. BTW, what is the source for your hatred of all things American. I can't help but think it clouds your judgement.
Sorry but wrong. If the oil stops, big agriculture stops. Big agg stops and there are food riots in the US. As a country we are massively dependant on cheap oil, at every level of our society. Sure we have the land that the food grows on, but we need the imported energy to get and move the food.
Okay, relatively speaking, the US is self-sufficient in food. If cheap oil stops, most countries will be in much worse situation than we are. And how exactly is the oil going to "stop"? We still produce 6 million barrels a day in this country. The cars may stop, but I'm guessing if starvation was on the horizon, the oil might be re-directed to the agriculture sector. Saying "If the oil stops" is like saying "If a meteor strikes Kansas".
If the oil stops, we could use our natural gas reserves. Conversion could occur very quickly.
Especially in Texas...
Oh, I thouhgt you meant "conversion" in the criminal law sense. That would seem more likely.
Ah why would a dollar crash force worldwide oil prices higher? Seems like it would be lower since there would be no US consumption because no one would want Uncle Ben's Fun Bux anymore. And 6 million barrels sounds like a lot, but then look at the huge pop we have and the infrastructure. The whole infrastructure is based on using oil, how do you think your foods gets to market? So lets say that we could still grow those crops...how would we move them? I mean I would love to see truckers pushing the semis down the highway! Keep on truckin!
And as to changing to natural gas, good luck with that. That would only happen post dollar collapse and not many would be interested in building a whole new energy infrastructure here in the now broke US. Also you think the Greenies would allow that, without a fight?
"So lets say that we could still grow those crops...how would we move them?"
KUNSTLER'S TINY TOWNS!!!!!
Shameful,
As stated we HAVE crude, billions upon billions of bbls of it...........we do not have to depend on ANYONE else for crude, just get the Green Nazi's back on a leash.
Folks start hurting, trust me, the resources we have not been allowed access to,...............will be, or else.
LPG, can be used till we get the rigs up and producing.............
We are still a NATURAL garden of Eden of natural resources..........Politco's and Special interests have stood in the way..................but, the items we need are HERE.
BINGO Shameful!! I live in "small town" America and without Ag. (oil) we can kiss our ass goodbye, and never mind just big ag. Horses, Shovels and hoes to feed 300,000,000? Surely you jest! And winter coming...?
The PTB had better have some firepower or they are going to be doing a Joan of Arc gig in Central Park. Milestones
We have everything we need here, to be great again, if we simply told these fkrs go to hades, we're drillling, and we're growing, and we're going to Mfgr again.........
We have all the Crude we need, and all the Nat Gas.........and all the airable farmlands with great soil on the planet.
For my whole life I have been pissed, ALL I have heard about the US has only 3-4% of the Worlds Population, and we consume 40% of the energy.
Meanwhile WHO is, has been, always FIRST at every disaster, and giving away trillions even to our enemies?.
The USA.
Where did everyone want to come and live?...........IRAN?
But, we are the most hated bastards on the planet......go figure.
Ungrateful bstds..............
Hell we even go to war, and pay to build back what we blew up, or what some other soverign did.............BUT, we can't take care of our OWN, we're BROKE.
No Shit?....Suicide time, I feel like such a loser.
All the triple stack Monsanto corn you can eat.
It's revenge that makes Sheeper act this way.
Revenge for being born.
Haha!
*
Deckard: Have you felt yourself to be exploited in any way?
Zhora: Like what?
Deckard: Well... well, like to get this job. I mean, did... did you do, or... or were you asked to do anything lewd... or unsavory, or... or, otherwise repulsive to your... your person, huh?
Zhora: [laughs] Are you for real?
Food, water, electricity, etc. are all increasing in price. Asset prices for real estate, cars, consumer durables, etc. are falling in price.
Paul Farrell should be reading John Williams (www.shadowstats.com) rather the idiot Schilling.
Gold stocks and gold in a bull market and everyone is now preaching depression....again. Looking at the weekly charts for XAU and gold/silver I think another run could be at hand.
It's a FIAT world and there are sooo many ways to print money AND create velocity of money. Start too soon and we get too much inflation before the 2012 election. Be patient and watch the charts. The yearly chart trend in inflation going back to 1913 is UP. There are dips here and there but they are and have been insignificant. History is 100% on paper money with a sizeable statistical data set:
Inflation and perhaps hyperinflation is the end game.
Do NOT fall into the group think of deflation and depression. It is incredibly unlikely. It is trumpetted by the press to start group think and create a backdrop for more inflation and printing....and to get all the sheeple to keep the faith in the good ol' US dollar (and yen/euro/etc.).
Yes everything is always incredibly unlikely until they happen, such as 1,000 point flash crashes, 40% market crashes, depressions. Always highly unlikely, until the day they happen. Of course nevermind your assertion that 'a depression is highly unlikely', just have to overlook the fact that it already IS a depression by really any measure. Naw, its highly unlikely.
followed by a crash in the bond market and then we have hyperinflation. Nobody ever said we would have demand pull inflation.
The bond market ISN'T crashing though is it? ie. Deflation IS happening, hyperinflation is just a mere possibility.
Tell that to anyone with an underwater mortgage and an inflating heating bill. That's the essence of Double Whammy which will keep on deflating everything you're worth while inflating everything you need.
BULLSEYE
AAA
The market is bifurcating. Deflation in hard assets (think houses) and inflation in food, commodities, energy, etc...
We are not in a normal world where we can just look at economic factors in the old way. Forex, EU and other factors makes the "deflation" story seem real. I don't buy it... we are in a bifurcating market where PMs are a good storehouse for what is coming.
When the USD defaults, you'll see PMs rise in a way that you'll think you are dreaming.
So Futuramas 'Hedonist-bot' is going on the scrap heap already? Maybe Leo can sell him to China for salvage at a solar company looking for scrap metal.
Maybe if those people with access to MSM start pounding this message home, then the masses will start paying attention.
Yes, this is all old news to readers of ZH & similar blogs, however, I'm still glad the message continues to get broadcast.
Hey guys - a LOT of sharp people commenting here. Please add to my "Obama Economic Metaphor" post below. I know it can be expanded greatly and with more humor. Thanks!
http://cretincountry.blogspot.com/2010/08/obamas-moronic-metaphor.html
I think bonds are dangerous surely they will bomb when everyone realizes the Fight Club moment is coming eventually.
"...the Fight Club moment is coming eventually"...
me likey!
Remember, in the movie Independence Day, when all the new age flakes gathered with signs on top of the tall building to welcome the flying saucer? This is the investor/financial community equivalent. This won't be pretty. I'm gonna go looking for a subway tunnel.
http://www.youtube.com/watch?v=ivQWJn5yrUg&feature=related
From the front page article summary.
There is a world of difference between real genuine hope and false hope derived from deep seated denial. One, real hope, is based upon a realistic view of the situation and a belief in yourself (and others around you that can affect you and your situation) that something concrete and viable can and will come from your personal and collective efforts.
The other, false hope derived from deep seated denial, is the act of a desperate man or woman that has abandoned personal responsibility for his or her own well being, usually in the pursuit of crass self interest, and now recognizes that he or she in deep shit and fully caught in the current of the onrushing river. They now face the understanding that they are basically powerless to effect change unless they are willing to accept the pain that comes with real change, starting at the personal level and working outward from there.
Since it's easier to escalate to a higher level of false hope that it is to untangle to web of the self deceit and deception he or she has engaged in for months, years or decades, the eyes are closed and the praying is increased as they totally abandon all self respect and honor to the very thieves they trusted in the first place to share the unearned and now spoiled pie.
Abandon all (false) hope all who enter here. Time for some reality. It's coming anyway. Might as well accept the reality of the coming pain. But of course for those who are in deep denial, this is currently impossible, thus ensuring themselves of even greater pain down the road. As father time likes to say, you can pay me now or you can pay me quadruple later. It's entirely up to you.
+10 CD!
I always knew we were in trouble once our leaders started preaching "Hope" and "Shop" as a national agenda.
CD: On a separate note, I see that it is your one-year anniversary on ZH. What are you going to do to celebrate?
I find that amazing. Thank you for the reminder.
While I've been around ZH much longer, it was first as a lurker and then as an anon. I didn't feel, and to a certain extent still don't feel, like I was worthy of the intelligence and wisdom displayed not only in the articles but most especially in the comment section. Wow.
I think that on my way home I shall stop at my favorite (red neck) barbecue joint and pick me up a pile of hot wings for my evening repast. Yes, that sounds like a great idea.
Thanks again for the tip of the hat heads up. :>)
CD....Didnt think you were worthy? You are probably the wisest one among us. Many of the other true luminaries have left, but you remained.
Thankyou.
Thank you for your kind words.
But ZH was a much different place 17 months ago when I first stumbled in and began lurking. It was much more technically market orientated back then and the articles were intense and very focused, with the comment section even more so. My knowledge base is much more broad and diverse so even though I have several financial professional designations (I test well) I'm not a trading (derivatives) pro by any stretch of the imagination.
So at times I felt like a fish out of the water because while I understood much of what was being said, I was in way over my head and I knew it. Still am at times. I'm a big picture guy, able to absorb great quantities of seemingly nonconnected data/information and then step back and see the bigger patterns and trends. I get lost in the minutia that others love so much.
Still going through this process and I just wanted to thank you (as well as all the others) for helping educate me...happy anniversary CD
Totally agree with tedog. (And we're all just bitches, bitchez, whether au fait with TA or unable to accurately differentiate an Eliot wave from Eliot the Dragon.)
and here's a random junk rate just to remind you of ZH's more peculiar charms...
If Mother Theresa posted here she'd be junk rated to oblivion.
At times it's almost like, "How ya doin you old cocksucker?"
edit: CD mentions " trolls, shills and the black ops psyops operatives" below, which of course makes total sense
As described in Zen & the Art of Motorcycle Maintainence, some people like to know how a motorcycle works, others where it can take them. You may be a member of the latter....
how about both, monkey man. wHOLE.
Good observation.
Happy Anniversary CD! Have a cold one on me.
+1, happy anniversary of your handle on here CD
and +1000 for stopping by a redneck joint for food!
The place I'm talking about really is a "red neck" joint, owned and run by great people. I still has a residual Yankee accent and everyone there just loves to hear the damn fool Yankee talk. You know "pac da kaa" sort of stuff. So it's a mutual love affair that I cherish to no end.
I was born and raised in New England and while I love my origins, I have little doubt my fellow New Englanders would not have accepted a "red neck" me as willingly and as fully as the Yankee me was and is accepted by the locals here in the south. That both humbles and delights me.
I learn about compassion and empathy on a daily basis by interacting with people who embody those very qualities every day of their lives. Salt of the earth and I'm honored to be welcomed into their fold.
CD congrats on the anniversary. The south is a special place. Being a "Texas Boy" born and raised it's a special place. I have no doubt that if this country continues it's idiotic policies "The South" would band together to go it alone and look out for one another. We are greatful you have come sit down stay awhile and enjoy the company!
+1 for a year out of anonymity! Keep asking the hard questions!
A rather sad day i must say seeing as only a few guests have turned up to CD's party.Well,might as well put a nickel in the jukebox......
http://www.youtube.com/watch?v=S-Xrlf3taEo&feature=related
......what the hell.Damn stupid machine.I want ma' nickel back!
Happy Anniversary CD.
You have some of the best commentary I've seen on this site.
Thank You for your contributions and please continue.
We are fortunate you share you wisdom and insight with us.
CD I kinda followed the same path of lurker/anon.
Quite a few have, judging from the comments I've read.
I am guilty of one thing. I first approached ZH with almost a sense of shock and awe that such a place could possibly exist. As I slowly immersed myself into the waters and was accepted as an equal, I began to develop a fierce loyalty and protective sense for "my" ZH. As ZH has become infiltrated with trolls, shills and the black ops psyops operatives, at times I can be too quick with the sharp tongue when I feel someone has crossed the line and is "harming" my ZH.
So people, if you see CD going off the deep end, please pick up any nearby 2 x4 and whack me in the head. Then gently remind me that my beloved ZH will still be here tomorrow in spite of all those foul creatures pissing and shitting all over the place.
happy birthday to you
happy birthday to you
i really quite frankly can only sing along, don't have them words memorized.
...and yet... am more hopeful now than a year ago... when the entire media drumbeat supported a fairy tale... a good cleansing... soooo much better when Americans are underestimated... its the beginning... not the end...
I do not think there is "end" coming but rather great change. How we view that change is entirely dependent upon the individual. That said, I do have great hope.
However (you knew that was coming, right?) may I caution you that people who are engaged in deeply ingrained cultural, social and political denial do not just snap out of it. Just as people slowly baby step into the lies and self deceit, so too will they exit in the same manner. The great unwinding and coming awareness will happen over a much longer period of time than might appear to be the case at this time. And there will be enormous steps backwards along the way as so many of our fellow earthlings bargain with the pain and suffering that so obviously is staring them straight in the face.
I hope to see the apex of this change during my lifetime, meaning within the next 20 years. But I'm not too sure it will be that short a period before things begin to get better rather than steadily worse. People do not give up their sense of entitlement very easily. For the more stubborn, death is the only way change comes. For others, near death experiences are the preferred way, usually by liberal beatings with any handy 2 x4. Some are ready now. Flexible thinking and perception is our friend.
Au contraire, my friend. In Great Depression I, the stock market crashed overnight, and bank runs shut doors quicky. Panic has no patients. In the early 80's, Gold/interest rates zoomed with a blitzkrieg speed and awe.
The same public that ate up pap ala "Pretty Woman" will not be soothed by the soothing platitudes of "Eat-Pray-Love" this time around. Anyone paying attention could have seen this "perfect shitstorm" well before 2008.
The denial has been great, but the "baby steppers" are soon going to be like the victims of the last big tsunami in the East. Gone.
Last spring, Richard Russell said to sell everything--100% liquid. He said that by the fall of 2010, you would'nt recognize this place--unquote. Last scene of Fight Club. Boom, boom, BOOM!
It can, and likely will happen very quickly. I certainly dont wish this to occur, and it wont be like the Y2K crowd expects, but a single Black Swan event could start it, and the dominoes/ponzis will fall with unimaginable speed. True shock and awe.
I'm not saying "it" won't happen quickly. Never said that. Please read my comments again.
I'm saying that people's ability to change their perception will progress slowly. While the market may have crashed in a few days to start the Great Depression, people didn't fully accept they were in a depression, and then begin the process of changing everything they needed to change in order to drag themselves out of it, until they were knee deep in massive unemployment and long lines to the soup kitchen. This didn't really begin to snowball for a number of years later.
I'll add my congrats on the 1 year ZH birthday as well, CD. It is good to have you around. I, too, was pretty swamped by the degree of technical articles that festooned the early ZH. But, it educated me beyond my normal level. I just wanted to know, based upon a lifetime of joy of learning for its own sake.
I have been a reader of The Privateer since the late 1990s and have been astounded at the prescience of Bill Buckler, however slowly its coming to fruition. I get over 2 dozen daily email newsletters including most of the ones mentioned here from time to time.
I always read anything by Paul Farrell when it appears. He is no rosy-scenario prophet but he does tell it the way he sees it.
You are right in saying that the process of decay will be gradual in the sense that it will be tolerable by the prepared souls. Those with heads-in-sand will be taken totally by surprise. Therein lies the chaos and general malaise. A new society will rise from the base line but I'm afraid that I may miss the upside due to my age. I'd so dearly love to see a free and open U S of A.
Brilliant synthesis.
Hey Obama, you paying attention yet?
ahh, thanks for the hard truth CD - not the chewy, melty, sugary-sweet "just have faiths" non-sense that marks the easy way out. . . if you don't dismantle the ego-shield, you never get to "self" truths. . . the ego is just a big whiney baby of needs & control issues, hehe. . .
+++ as many BBQ wings as you "need" - thanks for being a contributor here, above & below the line, part of the "captcha" that makes Zero Hedge unique!
+ !!! Well stated CG
It's to early to drink yet where I am, but screw it, I'll have two of what he's drinkin (smokin) and keep em comin till I start quoting Julia.
Yowza! It's all good advice, straight with no kinks. Except one: Sell most commodities? That's an anti-decoupling bet that could blow up fast. Same with selling developing country bonds. In fact, the way things are going, that may fast become the "Hope" bet.
+1000
If we were headed for a depression....
Steel stocks would not be leading the rally.
Buddy,
You don't get it. It's not the economy that is going to sink us... it's the trillions that we owe and the eventually dumping of the USD.
We have been in an economic war with China for the last 30 years and have not known it. It is when they believe that they can accelerate out of USD and start denominating in gold or their own currency, that you'll see where things go.
That's what they said in 1929, I'm sure.
No worries unemployment checks for the new comers will now be deposited directly into their new E-Trade accounts opened up for them by the Fed itself. Now all the terminally unemployed can worry less about their job search and do all their favorites silutaneously.
Buy some high betas, watch Jersey Shore & Dancing with the stars, run down to the local Wal-Mart and pick up some high cal snacks and meals for the month with their food stamps, Write a letter to their Senate & Congress informing them how they will not receive a vote unless Tier 17 unemployment is created, play some Call of Duty 4 with the unemployed teens and newly graduated college students who cannot find a jobs, gear up for Football season and watch the money tree in their E-trade account magically grow and withdraw only to pay cable, cellphone, beer & smokes, the occasional dinner at Texas Roadhouse, blurays and Abercrombie jeans.
The founding fathers never realized their own genius..they created a nation so free nobody EVER would to work a day in their life again.
Genius! May Uncle Ben and the Magic Printing Press grant us their blessing. God bless America!
Yes sir, my consumerist friend. We Americans are the best in the world when it comes to consuming. Waistlines, love handles, saddle bags and man boobs are the new medals and stripes !
The rest of the world just has to face up to the fact that if we can't gorge and indulge on cheap stuff they make, they'll just have to go back to living in mud huts without any underwear.
The sad thing about this post...there's only one thing I see in it that's a prediction (jest) for the future...the rest can be seen by looking out the window today.
Pure fucking genius my friend!
Classic - bravo.
If Eat-Pray-Love's Julia is your investment advisor, good f*-in luck. Especially with that blind irrational faith thing.
A dramatic turnaround in gold.
I expected gold to crash today upon the resumption of the "risk off" trade.
However, it went the other way instead.
Contrary to what the gold bugs think, higher gold prices means stocks are going up and we are probably going to see an economic recovery.
What do stock prices have to do with economic recovery? Seems to me that stocks were pretty ragged from the 40s-80s...and history tells us that was one of the big economic growth periods.
Recovery Fall?
I sometimes wonder if some hacker killed Robo and hijacked his ZH account.
Honestly I do.
hehe. Been wondering if he got an offer he couldn't refuse from Timmay boy and now Goldman prop desk owns his account.
Indeed --- doesn't the current RoboTrader sound suspiciously like a hybrid of the old Harry Wanger and Leo Kovilakikakakis?
I'm pretty certain that Robo is Leo's alter ego, so you shouldn't be too surprised. The big tell, for me, is that they seem to like to one-up each other in the posting-of-hot-chicks department...
Another failure of my imagination. It never really occurred to me that what you're proposing might be possible.
So where there's smoke(ing hot chicks) there's fire? :>)
Works for me - let battle commence! (Nero's hogging the fiddle again anyway.)
Gold has been going up when stocks have been going down lately.
Gold is up on dollar anxiety. I'll leave it to you to figure out why.
Contrarian thinking, RBT? When everyone preaches gloom, it's time to prepare for boom (as in opposite of bust, not a cataclysmic explosion auguring The End of Days)?
I think gold could be rising for other reasons. The slow march before it turns into a stampede as fiats are trampled.
For the record, I miss the pictures you used to post.
Do you mean a real recovery or a "jobless" recovery?
So if ameriCON'd can't handle the illusion, perhaps reality will be much more enjoyable!! I'm beginning to think when bendover burnokio rose has us all assume the positions, jiffy lube will be in extinction!!!!
How can 2 opposing veiws both be true? Example: Reporter to the commanding officer at Khe Sanh, "are reports of you being surrounded true sir?" commander's reply, "absolutely not.. but we are engaging the enemy on all sides"
Nothing going to change until people stop putting their money in these markets period. Stop making the crooks richer and richer. Get your money out of these TBTF banks. While Americans are geting kicked out of their jobs and homes, the thieves are sitting in 5 star restaurants eating Caviar, drinking Dom, and laughing at the suckers.
Now all the criminals in their coats and their ties
Are free to drink martinis and watch the sun rise
- Bob Dylan, Hurricane
you know what matters? nothing
because we're totally being destroyed by the banksters
every manipulation is done with destroying the system in mind
might as well just off myself right here and now, if not for the hope of seeing these G7 demons guillotined on the washington mall one day
I have been looking for an appropiate thread to ask a question..
In the event of a currency restructuring, what would the impact be on contracts like Life Insurance and Annuities? I can find little what I would call informed opinion, and I have called the advanced marketing and legal departments of a couple of very large companies.. ... and none have any answer. My guess is that they don't want to think about it.
Anyone here have any ideas?
Billy Bob
I cant find any answers either...im licensed both Life/Health and Property Casualty.
Also I cant get a solid answer on hyperinflation vs deflation effect on Insurance industry and annuities.
For currency restructuring, if it remains the same legal denomination (ie., the USD remains the USD), then the contract is unaffected. In the event that the USD is retired and replaced with a different currency, then for the purposes of the contract, they would have to legally change the language and inform you of the adjustment, along with a set time period to respond and/or challenge the amended contract (ie., you are legally entitled to bitch about the exchange rate and sue if you think you're getting a sour deal. If the Euro conversion is a decent guide, I don't think most of those legal suits would have much in the way of legs as the government will likely give guidance on the appropriate rate of exchange).
This. Plus, on insurance, you're going to notice the currency change because they're going to force you to start paying your premium in another currency...
Also, you paid the insurance company in dollars... but you want them to pay you in the same number in an appreciated currency? In the event dollars cannot be obtained or are significantly revalued, impossibility and impracticability are defenses to contractual performance... the insurance company will likely be allowed to pay you in an amount of new currency that is the equivalent, through exchange rate, of the contractually stated dollar payout, if it chooses. The exchange rate on the date of the loss will be used... and you may get some statutory penalty/attorneys fees out of the deal.
This swings both ways though... you'll be on the other side of the coin with your mortgage.
I didn't see PM's mentioned. Are they still not on the radar?
First, Happy anniversay CD. I too enjoy your comments. I think I might smoke up some ribs just in your honor.
As for the latest posts on life insurance/annuities in the event of a currency crisis. Obviously your Insurance companies legal dept's aren't going to anser a "speculation" question. You're supposed to sell insurance and annuities, not ask questions -got it?
Start asking more questions and you might find the answers you seek.
What happens to a company in general during hyperinflation? What happens to the currency in question? What currency is your insurance contract written in? (If you receive $100,000 death benefit, but the $100,000 doesn't buy what it used to due to currency devaluation...You lost purchasing power! Same with an annuity. If you have an annuity that has grown to say $100,000, if the dollar declines in value, you can't purchase as much with it.
Of course, this all assumes your insurance company can still remain in business under a currency crash or a hyperinflation scenario, which is certainly not guaranteed. How diversified are the insurance company's assets -both currency-wise and investment-wise. Insurance companies tend to have a lot of their general account money invested in bonds -what currency are they in? What maturities, b/c if interest rates rise... There's many more questons to ask and answer, but you get the idea.
As for the Shilling bashing, well, I might get ripped for this, but I find him spot on in many regards. I've made $$ which is the bottom line, whether you agree or disagree with someone. As for his "avoidcommodities", he was saying this in the context of industrial uses (ie. copper), not necessarily gold. He's definitely in the deflation camp and has been for many years. Personally, I find both prices increasing and decreasing, depending on what item we're talking aabout. With capacity utilization so low and employment and thus wage pressures low, it is hard to see hyperinflation in the short run. After that, anything goes, as I agree it will turn on a dime.
But but but aren't insurance contracts guaranteed? Against high water and high inflation? Damn, I've got to dig out that contract and have a look again. :>)
I'm always amazed how wide spread insurance/annuity contracts are in the general population yet many have no idea what they own. And you might be surprised how many (fellow) insurance agents don't understand how these insurance/annuity contracts actually work nor much about the (underwriting) insurance company either.
I would say that half the agents don't know that the insurance company can suspend (insurance/annuity) distributions, including death benefits, for 6 months, a year or longer (read the contract, particularly if it's a new one) and there is nothing you can do about it.
Thanks for the kind words and do have some ribs on the house. Send me the bill. I would rather owe it to you than cheat you out of it. :>)
Ahh shyte!
1 year and 3 hours, I'm late for the party as usual.
Anyway, happy anniversary
LMAO