The second great depression, which for industrial bellwether CAT started in December 2012 and has since resulted in 32 consecutive months of declining global retail sales and over a year longer than the decline observed during the great financial crisis, refuses to go away.
Last year, when alternative economic analysts were warning that the commodities crush and oil crash just after the taper of QE3 were blaring signals for a downshift in all other financial indicators, the general response in the mainstream was that we were overreacting and paranoid and that the commodities jolt was temporary. Perhaps the fact needs repeating that it’s not paranoia if they are really out to get you. Only a short time later, it is truly amazing how the rhetoric from the mainstream economic yes-men is changing. So now that the mainstream is willing to report on clear economic dangers, what happens next?
When we see guys like Bernie Sanders get visibly angry at guys like Alan Greenspan it behooves all of us to go beyond the entertainment of it or some prima facie agreement and to truly understand why the anger is justified. If we were to all take the responsibility to understand the lifeblood of our American existence i.e. the economy, we will most certainly be moved to remove not only the policymakers but the system that together serve only those at the top of the economic food chain and at a cost to the rest of us. When we do we will be asking why in the hell is no one yelling at Janet Yellen??
Take a step back from the media, and Wall Street commentary, for a moment and make an honest assessment of the financial markets today. If our job is to "bet" when the "odds" of winning are in our favor, then exactly how "strong" is the fundamental hand you are currently betting on? This "time IS different" only from the standpoint that the variables are not exactly the same as they have been previously. Of course, they never are, and the result will be "...the same as it ever was."
While the PBOC was literally everything in its power to keep the Shanghai Composite above its 200-day moving average as some sign of 'stability', it forgot about that other proxy of overall Chinese economic health: copper. And just as we warned previously, ever since the CCFD crackdown in 2012, copper has been tumbling and more crucially has just broken a 15-year trendline. The plunge in copper means almost one in five mines globally is losing money.
If we call stagnation progress, what have we accomplished?
A rate hike is coming. It is coming because the economy is not in crisis and zero rates are crisis rates, Bloomberg’s Richard Breslow writes. It is coming because the benefits of starting down the path to monetary policy normality are vitally important to the future health of the economy and restoring the Fed’s reaction function. The world can share the benefits and the costs. But one thing we do know, is that with all the hinting and polling and talk of trajectory, it is not priced in.
The American dream has become perverted into the equivalent of hoping to pick a winning economic lottery ticket: hoping that you somehow will become one of the lucky 0.00001% who strike it big and make millions upon millions of Dollars.
Saddled with a corporate media that marches in lockstep with the government, elected officials who dance to the tune of their corporate benefactors, and a court system that serves to maintain order rather than mete out justice, Americans often feel as if they have no voice, no authority and no recourse when it comes to holding government officials accountable and combatting rampant corruption and injustice. In the face of such abject injustice, outright corruption and overt inequality, it’s hard to feel empowered to believe the average citizen can make a difference.
Until recently, the "socialization" of New York under newish mayor Bill DeBlasio mostly involved snowfall snafus, exploding manhole covers, giant sinkholes in the middle of the city, and boycotting NYPD cops. The rest was mostly still on auto pilot, and as a result, worked. However, slowly but surely, even the mecca of crony capitalism where at least 1% of the population has never had it better, is starting to succumb to the general economic malaise of the second great depression. Case in point, crime in Central Park is up 26% this year, which at a time of record wealth, gentrification and all time high stock prices, should be unheard of. It also confirms that not all is well with the "recovery" propaganda.
Preppers talk about the day when paper currency becomes worthless and how they plan to barter when things fall apart. But, what will most people do when the government check they depend on stops forever more. Over 50% of the people in America now get some kind of government check every month. That is a question that we think many people have not come to grips with yet. You can ignore reality, but you cannot ignore the consequences of ignoring reality. When the government checks stop and your savings are gone, what will you do?
The robo machines pushed their snouts through 2100 on the S&P index again yesterday. This was the 13th time since, well, February 13th that this line has been re-penetrated from below. But don’t call it an omen of bad luck; its more like monetary rigor mortis. The bull market is dead, but the robo-machines and talking heads of bubble vision just don’t know it yet.
With Bloomberg's IPO index down 20% from its late 2014 highs and pressing 10-month lows (having gone nowhere in 2 years), all is not well in the private-to-public transaction market. Despite the multi-billion-dollar ponzi valuations of various 'disruptors' and leaked data opening the kimono on how insane this reality is, we thought the following clip perfectly summed up how it's different this time...