It is generally conceded that we are living in an era of Peak Everything: peak central bank omnipotence, peak powerless of the non-elites, peak wealth inequality, peak media-induced delusion, peak market-rigging, peak bogus official statistics, peak propaganda, peak bread and circuses, peak deception, peak distraction, peak sociopathology, peak central statism, peak debt, peak leverage, peak derealization--need we go on? Peaks generate bubbles. Bubbles reach extremes and then they pop. What do we do when the bubble economy cannot be reflated?
The global power shift from the West to the East is alive and well
Imagine… if you could press a magic button… and your wealth expanded by hundreds of thousands…if not millions of Dollars.
"Just when did Central Bankers become world media superstars and when do we get to put them back in their box?" Strutting the world stage, flitting from press conference to rubber chicken dinner, dispensing what passes for wisdom and prognosis as if the court astrologers have toppled the mighty Nebuchadnezzar and now rule in his place. Whatever happened to discreetly overseeing the balance of payments and facelessly staunching the worst panics only when absolutely necessary? This is clearly Japan’s last stand and there is no real exit strategy except to explicitly default on its debt. But an economic collapse and a sovereign debt default on the world’s third largest economy will contain massive economic ramifications on a global scale.
NAHB homebuilder sentiment rose to 58 in November, from 54 in Oct, beating expectations but remains below the 59 cycle highs in September. Since those highs, Prospective Buyer Traffic is down the most but remains near cycle highs. The Northeast saw a huge spike in Prospective Buyer Traffic (from 39 to 51) and The West bounced back from its plunge in October. So if everything's so awesome, what's wrong with these two charts...
If only George Orwell could see us today. When he wrote “1984” back in 1948, he probably never imagined that the “totalitarian, bureaucratic world” that he imagined would ever actually become a reality. But that is precisely what is happening. The control freaks that run our society are absolutely obsessed with watching, tracking, recording and monitoring virtually everything that we do. We truly are becoming a “1984” society, and if we continue on the path that we are currently on eventually our world will be transformed into something more hellish than anything that George Orwell ever imagined.
Politicians, Media and Wall Street May Be Trying to Hide the Size of the Gap
“In a Ponzi game you exhaust the lenders eventually, and of course Japanese taxpayers may revolt. But otherwise there are always new taxpayers, so this is a feasible Ponzi game, though I'm not saying it's good.”
Anti-HFT Revulsion Grows: IEX Ties For Fourth In Dark Pool Trading Thanks To World's Largest Wealth FundSubmitted by Tyler Durden on 11/17/2014 14:56 -0500
While Wall Street is certainly free to broken record that Michael Lewis' hugely popular story about HFT and market rigging did not impact the natural course of events, the reality is it did: the collapse in Barclays' dark pool LX (shown in the bolded red line on the chart below), in the aftermath of the NY AG case against the British bank, has been documented in the past, and is just one example. An even more vivid case study comes from the surge in popularity of upstart dark pool IEX (green dotted line below), the protagonist of Lewis' Flash Boys book, and which out of nowhere, has just tied with Lavaflow's dark pool for fourth spot in ATS trading with just over 200 million shares in the week ended October 27. The catalyst? Norway's sovereign wealth fund just said not to HFT parasites.
As the generational war heats up, we should all remember the source of all the bubbles and all the policies that could only result in generational poverty: the Federal Reserve.
People blame human nature as the source of our global problems, but they rarely see themselves as part of the problem. And yet there they are, smack dab in the middle of the mess, demanding someone else clean it up.
It’s amazing to watch, particularly when you consider that it is now public information that Draghi actually didn’t have a plan when he first claimed this and is effectively making up policy on the fly.
Dumb and Dumber To, the sequel after 20 years, was released recently. However, when it comes to real humor, the Dumber slapstick was easily upstaged over the past few days by the G20 summit in Brisbane. The lunatics are guiding us off the cliff. We know most people feel there’s nothing they can do to change the course their countries and governments have taken, but we also think that perhaps all these people need to realize they don’t have much of a choice anymore. If getting up from your couch for your own sake isn’t enough of a incentive, how about doing it for your kids and grandkids? The dumber-ass approach is the same one they use for their economic, what shall we call it, ‘policies’(?), it’s the exact same thing. It’s the surface that counts, not what’s underneath it. It’s the storyline, not the veracity of it.
Following last month's collapse, hopes were high for the Keynesian data mean-reversion to bounce Empire Fed Manufacturing data solidly higher... it didn't. A small bounce to 10.16 (against expectations of 12.2) is the 2nd miss in a row and below January's mid-polar-cortex levels. Under the covers, it was even uglier as average workweek and prices received plunged to their lowest levels in 2014 (as prices paid only inched lower - sparking fears over margins). The number of employees also fell (despite a rise in new orders?) but the headline print was saved from worse by a surge in 'hope' yet again as the business outlook jumped by 6 points to 47.61 - its highest since Jan 2012!!
Washington’s ability to rig markets has allowed Washington to keep its economic house of cards standing. The extent of financial corruption involving collusion between the mega-banks and the financial authorities is unfathomable. The Western financial system is a house of cards resting on corruption. Can it stand forever or are there so many rotted joints that some simultaneous collection of failures overwhelms the manipulation and brings on a massive crash? Time will tell.