"Feel the Bern"...
"The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities.... As a result of the severe decline in real activity and subdued inflation, short-term Treasury rates fall to negative ½ percent by mid-2016 and remain at that level through the end of the scenario."
When people lose everything and they have nothing to lose, they “lose it.”
"The Fed should, given recent events, simply admit its error of pre-emptively raising rates before both its employment and inflation mandates had been met, and reduce the Federal Funds rate back to zero, pending further improvements in the economy. Certainly, the Federal Reserve risks its credibility by admitting an error, but that is a far better outcome than risking recession by not doing so"
"dip buying is officially dead and stocks (esp. US ones) are no longer impressed by promises of central bank largess. The reason the SPX has only witnessed insipid rally attempts during this weeks-long swoon is the absence of robust dip-buying."
Remember when Bitcoin and its digital currency cohorts were slammed by authorities and written off by the elite as worthless? Well now, as the war on cash escalates, officials from The IMF to China are seeing the opportunity to control the world's money through virtual (cash-less) currencies. Just as we warned most recent here, state wealth control is the goal and, as Bloomberg reports, The PBOC is targeting an early rollout of China's own digital currency to "boost control of money" and none other than The IMF's Christine Lagarde added that "virtual currencies are extremely beneficial."
"Lately, I must admit that my hostility towards your political ilk has ramped up, pretty dramatically...Everything that modern liberalism accomplishes is accomplished at the barrel of a government rifle...What angers me the most about you is the eagerness with which you allow the incremental enslavement to occur. I have the utmost respect for a slave who is continuously seeking a path to freedom. What I cannot stomach is a free man who is continuous seeking a path to servitude by willingly trading his freedom for the false sense of security that government will provide."
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.
The prospect that the leaders of our monetary politburo are about to be tarred and feathered by economic reality might be satisfying enough if it led to the repudiation of Keynesian central planning and a thorough housecleaning at the Fed. Unfortunately, it will also mean that tens of millions of retail investors and 401k holders will be taken to the slaughterhouse for the third time this century. And this time the Fed is out of dry powder, meaning retail investors will never recover as they did after 2002 and 2009.
Even though the odds are never in our favor, there is still hope. Not everyone has to make the extreme sacrifice in order to contribute to the revolution. There are thousands of small acts which will weaken the establishment: "Don’t be a slave to debt. Live beneath your means and accumulate some physical silver and gold. Don’t vote for candidates selected by the vested interests. Spread the message of liberty and freedom to anyone who will listen. Think critically. Do not trust your government. Prepare for the inevitable collapse of this rotten, fetid, corrupt paradigm."
"Security prices are not low. I wouldn’t say high, but full. So people are thinking cautiously but they’re acting bullish and they’re behaving in a pro-risk fashion. While investor behavior hasn’t sunk to the depths seen just before the crisis, in many ways I feel it has entered the zone of imprudence... The market is not an accommodating machine. It will not go where you want it to go just because you need it to go there."
Evil corporate America meets oppressive police state: “When we received word of potential strikes and disruptive activity on Black Friday 2012, that’s when we started to ask the ARC to work with us. ARC had contracted with Lockheed leading up to Black Friday to help source open social media sites.”
Since our Keynesian central bankers have no clue that their prodigious money printing resulted in the drastic underpricing of credit and capital over the course of the past two decades, they are flying blind. They simply fail to see that the global economy is now swamped in more excess capacity than at any time since the 1930s, and probably even then. So they keep expecting the commodity cycle to momentarily bottom and prices to rebound, thereby reflating CapEx and household spending.
If you missed the third democratic debate, don't worry, you are not alone: the President himself had much more important pursuits to attend to when the potential successor from his party was laying out her (or his) ideological vision for the future of America.
The upside is ephemeral, illusory or wishful thinking; the downside is real and lasting.