Recession

As the poor get poorer, so the saying goes, the rich get richer; and until recently that was not just true, but apparently mandated so by The Fed. However, the last few months have seen the so-called "1%" appearing to struggle a little in their largesse. As we noted previously, not only are luxury jet values dropping for the first time since 2009, London mansion prices plunging, San Francisco home sales collapsing, fine-wine and diamond prices at 2009 crisis lows, and Sotheby's laying people off, but now, as Bloomberg reports, Swiss watches - the ultimate in luxury extravagance - have seen exports crash by the most since the financial crisis.

What do you do when you're a government statistician and the economic data doesn't say what you want it to say? Why you "adjust" it of course.

Importantly, while the "bias" of the market is to the upside, primarily due to the psychological momentum that "stocks are the only game in town," the mounting risks are clearly evident. From economic to earnings-related weakness, the "bullish underpinnings" are slowly being chipped away.

The sums in play are so staggering (an estimated $11 trillion in emerging market debts denominated in other currencies) that even the Fed won't be able to stop the meltdown.

As Puerto Rico stares down a $355 million bond payment due in less than two weeks, analysts warn that without federal intervention, the commonwealth could face growing social unrest and a prolonged depression.

Janet Yellen’s astonishing letter to the Speaker of the House, Paul Ryan, is a sign that the central bank is panicking over the fact that Congress is unhappy with the job it has been doing.

"If you just exclude all the bad stuff, earnings look quite good."

Just a day after a dismal read on GDP, the latest data out of Brazil shows a spike in both inflation and unemployment, as the country's economic outlook continues to deteriorate at an alarming pace.

"The reason for our recession concern is not so much because of what the Fed is about to do – likely embark on a slow hiking cycle beginning in December – but because it did not start the tightening much sooner."

The Fed was out in force yesterday peddling some pretty heavy-duty malarkey about the up-coming rate liftoff at the December meeting..."If we begin to raise interest rates, that’s a good thing." That’s not a bad thing." Goldman is putting out the final mullet call for this Bubble Cycle because it knows that this bull is dying; that insiders still have massive amounts of stock winnings to unload; and that the clock is fast running out. The expiring clock is evident in the S&P 500’s one-year round trip to nowhere. Despite the fact that the Fed has ponied-up a stick save at every single meeting this year, the market’s 27 separate efforts to rally have all failed for the simple reason that the jig is up.

Having detailed the "perverted nonsense" that is the collapsing and negative US swap spreads (here, here, here, and here) and noted money manager's concerns that the big question remains whether there is "something bigger brewing under the surface that so far hasn’t been pinpointed yet," it appears Goldman Sachs feels the need to 'explain' the anomaly in what appears an effort to calm fears about the broken money markets. Of course, we don’t have to figure out what the “market” is saying about a negative spread because it isn’t saying anything other than “something” is wrong and even Goldman admits this signals funding and balance sheet strains are worsening since August.

There are seemingly always “good reasons” why troubles in a sector of the credit markets are supposed to be ignored – or so people are telling us, every single time. Some still recall how the developing problems in the sub-prime sector of the mortgage credit market were greeted by officials and countless market observers in the beginning in 2007. Meanwhile, the foundation of the economy continues to look rotten (the newest round of Fed surveys has begun with another bomb and other manufacturing-related data continue to disappoint as well). This isn’t going to end well, if history is any guide.

In 2016 just three countries will grow above Goldman's blended global average growth rate of 3.6%: India, China and Indonesia.

The Fed has created a dead end street for everyone not in their .1% clientele... We’re all muppets to the banking cabal running this morally and financially bankrupt military empire of debt.