In China, the government reported 4Q GDP growth of 6.8%. However, during the same time period our China CAI (Current Activity Indicator) expanded at an average of just 4.5%, 230 bp slower than the official measure. Earlier this week our December CAI reading suggested China economic growth has decelerated to just 4.2%.
The fabric of the market is showing signs of fracturing, as 9 years of declining policy rates and 6 years of QEs failed to kick-off growth, while, as Fasanara Capital's Francesco Filia notes, further easing has a visibly decreasing marginal effectiveness. It is end-of-cycle-type policymaking and market responsiveness and while some markets and sentiment reflect the concerns of a tail-risk-like collapse, stocks remain dissonant in the medium-term to the ongoing rioting against monetary activism and market manipulation by global Central Banks.
Important pillars of the bull case evaporated throughout 2015. Global price pressures weakened, the global Credit backdrop deteriorated and the global economy decelerated. The huge bets on central bank policies left markets at high risk for abrupt reversals and trade unwinds – 2015 The Year of the Erratic Crowded Trade. Indeed, a global bear market commenced yet most remain bullish. Serious and objective analysts would view this ominously.
Rare is the ‘aware’ individual who engages in little more than window dressing in re-ordering our lives in preparation for the inevitable……that which is not self sustaining will not continue.
"I am not terrified of the terrorists; i.e., I am not, myself, terrorized. Rather, I am terrified of the terrorized; terrified of the bovine masses who are so easily manipulated by terrorists, governments, and the terror-amplifying media into allowing our country to slip toward totalitarianism and total war." – Dan Sanchez
"Eventually, all of America’s lesser problems will combine into one giant problem. The very survival of the society will feel at stake, as leaders lead and people follow. The emergent society may be something better, a nation that sustains its Framers’ visions with a robust new pride. Or it may be something unspeakably worse. The Fourth Turning will be a time of glory or ruin."
The institutional academic system is broken. We need less systemic, traditional education that only provides knowledge of low utility and more alternative education that provides the right high-utility knowledge to thrive during today's global currency wars.
Succinctly summarizing the state of the mainstream media's cognitive dissonance at the state of 'real' America...
It was clear what was about to happen in Syria only because we understood one important fundamental – that there are no “sides” in any modern conflict, only proxies fighting on a global chessboard controlled by the same elitist interests. Syria represented a perfect catalyst for a planetary scale conflict triggered between East and West in a way that could divert attention from internationalists. Modern war, whether through kinetics or economics, is almost always theater designed to distract and terrorize the masses, which are the true target of any conflagration.
"We believe that the path of least resistance would be to effectively ban capitalism and by-pass banking and capital markets altogether. We gave this policy change several names (such as “Cuba alternative”, “British Leyland”) but the essence of the new form of QE would be using central banks and public instrumentalities to directly inject “heroin into blood stream” rather than relying on system of incentives to drive investor behaviour."
“Capitalism is not primarily an incentive system but an information system.” Prices are the information. And the price of time itself is the single most valuable piece of information. Time, as we intuitively know, is money; they are two sides of the same coin. Mess with time and money, and you mess with everything else. Yet as with central planning in general, the central planning of either money, or time, cannot possibly work. Hayek warned the economics profession of precisely this in the 1970s. They didn’t listen, ensconced as they still remain within their interventionist Keynesian paradigm. Well that paradigm is about to be blown apart, time and money are about to return to the market, where they belong, and real, sustainable economic progress is about to restart once again.
These facts reveal the utter falsity of the propaganda drenched duplicitous data dumped by the BLS on behalf of vested interests who have captured our government and have an agenda requiring the public to be kept in the dark regarding their own dire financial situation. No matter how you slice the data, it reveals an absolute parallel to the situation during the Great Depression.
When you tell people in self denial the market could drop 40% in a few months, they think you are crazy. They declare this could never happen. They would get out of the market before it would fall vertically. Their memories are conveniently short as their normalcy bias and cognitive dissonance blind them to what happened over three months in 2008/2009. We wonder how many willfully ignorant investors can handle a 50% to 70% haircut in their 401k, especially if they are over 50 years old. We wonder how much angrier the populace will become when the current recession results in more job losses, bankruptcies and revelations of Wall Street malfeasance. Beware of the bear.
From a financial market psychology standpoint it is however very important that central bankers don’t appear clueless. A majority of market participants needs to be able to suspend disbelief to an sufficient extent, i.e., they must be able to share in the collective hallucination that central bankers actually do know what they are doing. When it is no longer possible to maintain this facade, many things are likely to be suddenly questioned – and among these is the question whether it makes sense to remain exposed to yet another gargantuan asset bubble.
We're beginning to believe the nation will not be unified behind a common cause when the coming financial eruption unleashes molten lava of chaos, punishing economic distress, civil strife, class warfare, race wars, and ultimately global war. As Strauss and Howe foretold, the establishment (aka corporate fascist military industrial surveillance state) has seen a sequential loss of popular trust as their blatant corruption, sociopathic stranglehold on the levers of power, and unrelenting greed have angered the critical thinking aware citizens of this country. The next leg down in this Greater Depression will sever the remaining trust, disintegrating any remaining support for the existing civic order. What comes next will be heavily dependent upon whether the 5% to 10% of liberty minded believers in the Constitution are able to gain the trust of the masses.