Guest Post: Hope Has Changed - It Died

Tyler Durden's picture

Originally posted at Monty Pelerin's World,

Hope is dying in the US.

The performance of financial markets affects everyone. For savers and investors, these markets represent the means to an improved life, at least as they define it. Savings and wealth provide options and opportunities, the quintessential aspect of being an American. These options and opportunities differentiated an American from someone who was born and destined to die in a hut or remain locked in a societal class from which there was no hope of escape.

Bonds and stocks were the primary means for savings and investments for generations of Americans. When these do not perform up to expectations, lives are changed. Plans and dreams are dashed. College educations, retirements and similar major events are deferred or never happen.

We are twelve years into this new century and Americans are losing their hopes, dreams and aspirations. Hard reality has crushed the optimistic spirit that once drove the country. The first decade rivaled the 1930s in terms of stock market performance. Twice, stock market wealth was halved in this ten-year period. Twelve years in, the S&P 500 has returned a total of 14%. That puny return has not come close to covering the decline in purchasing power of the dollar during the same period. Worse, a generation or two, has lost probably 33% of their wealth-producing years.

College graduates come out of school under-educated and buried in debt. Most cannot find a job commensurate with their education or aspirations. Taxes rise and will accelerate in the future as the federal debt and social promises become more binding. Young people find it difficult to imagine getting out from underneath their student loans or buying a home.

Outcomes in the housing and stock markets have affected millions. Equity in homes has dropped dramatically. Some have lost their homes as a result. Savings and wealth that were reasonably expected based on historical precedents did not materialize.

These outcomes are explained away in terms of markets "underperforming." To speak of housing and stocks as if they are independent entities that suddenly somehow turn bad is to miss what is really happening. Markets" are nothing more than millions of us making individual decisions intended to improve our lives. Markets do not under or overperform. It is people, the millions of buyers and sellers, that drive markets. When markets "underperform" it is because people have "underperformed" or more properly, bought less common stock or fewer homes.

People are acquisitative by nature, wanting more rather than less. When they "underperform" in terms of purchasing decisions it is because they had to. Unlike the federal government, people cannot print money or spend beyond their means, at least for extended periods of time. Eventually they hit budget constraints. That is what is being reflected in stock prices and home values. They are reflecting the lower standard of living of the country.

The feel-good spending of the prior two decades caught up with the American consumer. He was never as rich as he believed. Now, as a result of having to service this debt binge, he is poorer than he should be. That is why markets are underperforming. That and the fact that fewer people have jobs.

A recent article, "You Haven't Made Any Money In The Stock Market This Century," struck a nerve with some readers. Reader Chugar submitted comments that expressed the general sentiment of many (my emboldening added):

I am still in the stock market and hate it daily.


The feeling of it being a wise investment left long ago. I watch the flash crashes, read about HFT, the endless blabber on business shows about "buying opportunities" have grown old.


Since all these talking heads have a vested interest in keeping the game going, if we aren't buying their products they make no commission or their advertisers are not kept happy. It isn't hard to figure out.


With that said we are trapped, for my working career I was told, buy and hold, dump money into the 401k/457/ROTH or Traditional IRA. Not to mention an underfunded pension, which may run out of money before I can even draw.


I lost track of firms and brokerage firms over the years who not only had ethical problems but legal problems. So much for confidence in what appears to be a grand scam run by well-dressed crooks.


My local credit is advertising a 3 year CD for 0.7%... Thanks ZIRP and Mr. Bernanke


I was just reminded I never really own my home with a year end property tax bill.


Taxation,user fees, access fees on and on are coming our way to finance a government that will never get enough, whether its local, state or federal.


Its criminal what is taking place in this country.

The frustration and anger is apparent in these comments. It should be. When one thinks about what has happened, it is difficult not to become angry. The stock market is not the problem. It is merely a scorecard that reflects what is happening to the country. Here are but a few of the factors:

  • Freedom as a concept is praised, while government actions designed to reduce it for ordinary citizens continue.
  • Working longer and harder produces less wealth than was possible for your parents.
  • Living standards will be less for your children and grandchildren than they were for you.
  • Leisure (going on the dole) is now a choice unaccompanied by either shame or hardship.
  • Politicians have made dependency a tool to gain votes and power.
  • As freedom decreases, government becomes increasingly more violent in order to achieve the behavior it demands.
  • Laws are enforced selectively in favor of the political class and their cronies. No bigger rape of justice has ever been committed than the unwillingness to prosecute the banksters, regulators and legislators  responsible for the looting of taxpayers.
  • Government lies with impunity with respect to the true condition of the country. This behavior is obvious with respect to economic statistics but also spills over into all other areas, like personnel decisions.
  • Cover-ups like "Fast and Furious" and Benghazi are ignored by a corrupt and compliant media. Lesser problems (Watergate) were cause for removing a president in simpler more honest times.
  • Government's insatiable spending has decimated the private sector economy. Capital and talent increasingly flee to other countries to avoid economic persecution.
  • Eventually this spending will cause much of the economy and all of the government to collapse. Massive debt defaults, impoverishment and social unrest lie ahead.
  • The phrase "government ethics" is little more than a comedian's tool for generating laughter.
  • The Mafia has far better ethics. It treats its customers better than government. The key word is "customer" which they must attract. Government does not have customers; it has "slaves." That is how government views private enterprice.
  • Compare the payouts on illegal gambling to those of government sanctioned lotteries for a simple comparison between the two methods of organized crime. You do much better dealing with the Mafia.

The country's financial condition is deplorable and cannot continue much longer. So, too is virtually everything else the government has touched whether it be education, Amtrak, the post office, Social Security, Medicare, ad nauseum. Nothing government has done has not been a Ponzi scheme dependent upon additional theft from taxpayers to keep going.

The system is now broken. There is no one to blame for this other than government. Despite this obvious conclusion, government is still seen to be a savior by a large proportion of the country.

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GetZeeGold's picture



Through me you pass into the city of woe:
Through me you pass into eternal pain:
Through me among the people lost for aye.

Justice the founder of my fabric mov'd:
To rear me was the task of power divine,
Supremest wisdom, and primeval love.

Before me things create were none, save things
Eternal, and eternal I endure.
All hope abandon ye who enter here.

Such characters in colour dim I mark'd
Over a portal's lofty arch inscrib'd:
Whereat I thus: Master, these words import.

Dante Alighieri

brockhardman's picture

Unfortunately, the people who need to be reading this article are not smart enough to keep up with ZeroHedge.  What we need is for someone to interpret it for them.  Maybe if we say the gubment says it, they will make an effort.  </pipedream>

Zer0head's picture

author says: "The system is now broken. There is no one to blame for this other than government"


Sorry but .gov got its power from somewhere. While I  agree there is now no turning back, there was a time in our not too distant past when we the people actually made a choice. See Banzai's next post and think about Frau Hilda und Herr Gunter in the winter of '33.

trav777's picture

stupid fking article...Amtrak turns a profit.  Yeah, with its 80 year old infrastructure and 40 year old rolling stock, the NE corridor earns a ton of money and has 3/4 of the NY/DC traffic.

They have starved Amtrak for decades while funding the hell (subsidizing) out of car and plane traffic.  Amtrak was the whipping boy for the money wasted on roads and airports.

HoofHearted's picture

"College graduates come out of school under-educated and buried in debt. Most cannot find a job commensurate with their education or aspirations."


Might the undereducated part have something to do with not finding jobs??? And maybe McJob is commensurate with their crappy education. It's at least worth thinking about...

trav777's picture

and hope hasn't died at ALL.

Obama was just COMFORTABLY reelected.  Yeah, this means that there are still legions of 47%ers HOPing for more of the productive members' earnings, and there are still tons of illegals HOPing for promised amnesty (so they can become part of the 47%), and obviously still tons of yankee lib noncoloreds HOPing that colored people will like them and absolve them from the stain of perpetual guilt for something someone else did to somebody else 300 years ago or something.

Oh wait, that's IT, idn't it?  The author of the article, like the morons here, thought that the rest of everybody was hoping for the same things that he was!  LOL...they're NOT, morons.

People don't SHARE your values.  They don't want what you want; their definition of good, just, and right is totally different.  Alien even.

That is because you are clinging to principles from OLD America.  This is New America.  New America REJECTS almost EVERYTHING from Old America because Old America was racist.  Racism is such an existential sin that it totally nullifies anything, ever, for all time.  Consequently, there was nothing at ALL that was good about Old America.  This is why New America's values seem to be totally opposite and bizarro.

And yes, I seriously mean that you are all racists.  By definition of the word; it's a simple statement of fact.

AldousHuxley's picture



Below owners of capital are those who dish out false hope of retirement for hard labor (bankers), free lunch loss of private power (politicians), after-death rewards for morality (religious leaders), and today livinging the good life via fake cheap entertainment  (hollywood).



Totentänzerlied's picture

Do you have anything else to contribute, except blame for blacks?

Thomas's picture

"Worse, a generation or two, has lost probably 33% of their wealth-producing years."

'Nuff said.

JR's picture

Exactly. But it's hard to forget, in those two generations, the aggressiveness of the banking families: ever pushing government in their direction, prostituting regulators, congressmen and presidents, and financing wars, helping themselves to the treasure called the U.S. Treasury. How could a government of the people allow this to happen? Answer: the chokehold on political control called the Federal Reserve Bank.

By the way, this is one of the greatest articles ever to come down the ZH pike.

Lordflin's picture

The article is good so far as it goes... Makes a needless distinction between government and mafia however.

AldousHuxley's picture

Government cops and paper pushers retire wealthier than retired mobsters...

Aurora Ex Machina's picture

AMTRAK (express) makes all of its profits off commercial freight, fyi.


Shipping people? Not so much.

Woodyg's picture

How about blaming the damn corporate criminal class who have Bought our political system off lock stock and 2 smoking barrels.

Dingleberry's picture

Government is not the problem. Voters are. The good news is that reality is a bitch, and they get what they truly deserve, not what they thought they would.

smlbizman's picture

i downed you dingle for this reason; there is not one govt. operation from the tippity top to lowest state agency that is honest.  so to believe the elections are decided by the people, and not by deceitfull tactics is a bit nieve. but i could be wrong......

scatterbrains's picture

OT:  show of hands bitchezz...  how many yah niggas seeing the gasoline breakout?


unwashedmass's picture


you ain't seen nothing yet....wait till wall street takes the last of everyone's savings with this "bull market climb".....

Sudden Debt's picture

I don't think Obama's public relations department will agree with you on this...

SmallerGovNow2's picture

Public disinformation department...

marathonman's picture

Hype and chains.  Forward....

r101958's picture

Exactly. Every time the talking MSM heads spout about how the Dow is just about to reach historic highs I want to shout 'SO WHAT?'. All one needs to do is go to and enter the 2007 Dow peak of 14093 and then hit the calculate button. They would see the 14093 in 2007 is worth 15605 today. So we actually have another 1800 to go before the market level is comparable. Of course, nobody mentions this. Another diversion and farce courtesy of the MSM.

marathonman's picture

I haven't used ShadowStats inflation factor, but I would not doubt that in real terms the current highs are well off the highs of 2007.  In nominal terms it looks like a fantastic break out, but those are the games that central banks use to steal even more wealth.  Numbers look like shit?  Inflation makes them look better and even produces capital gains that they can tax, reducing your purchasing power and actually losing you money!  It's all bullshit, but a game I am forced to play.

Raymond K Hessel's picture

Thanks for the link.  

I usually junk those but this one seems to be legit.  

I know the reported CPI is junk but I like how you use the calc to show that even by generally accepted manipulated methods, the market is still a sucker's graveyard.  If we were to use ShadowStats, even would even be worse.

Abrick's picture

Government is a slave to concentrated wealth. Big business will only be too happy to remove them as middle men. Good luck with your Mafia bosses.

Turin Turambar's picture

Hope and Change?

"Dopes left with change" is all I ever heard.


Spastica Rex's picture

"Broken?" "Broken" for who? For everybody?

I don't think so.

BLOTTO's picture

Nothing New Under the Sun


History is repeating itself.


"Surprise, Surprise"
~Billy Talent

You got the look, but not the credit
They wrote the book, on how to sell it

From cigarettes, to skinny jeans
You got the money? They got the means

All you upper class daughters, and working class sons
It's hard to save a dollar, the way the world runs
You're the target market of a corporate joke
It won't be so ironic when your daddy is broke

Surprise surprise, surprise surprise
You're much better looking when you're in disguise
Surprise surprise, surprise surprise
And this revolution has been brought to you by

El Oregonian's picture

Our whole financial system, political system, judicial system has underperformed for their citizens...

Totentänzerlied's picture

Well then, seeing as this place used to be a democratic republic, ipso facto, the citizens underperformed their duty to secure and maintain their rights and liberties. You reap what you sow. In other words, GIGO.

fonzannoon's picture

"Investors are feeding money to stock funds at a record-breaking pace this month, according to TrimTabs Investment Research.

$55.0 billion has bee invested in all equity mutual funds and exchange-traded funds in January, by the firm’s count. The previous record: $53.7 billion in February 2000, “which was just before the technology bubble popped.”

Trimtabs is the fat guy sitting on the deck who went 100% short in August right?

eclectic syncretist's picture

Yeah, the one who looks like he's gotta be tased before he'll wake up.  Is it alcatrazz or the golden gate bridge in the background?

d edwards's picture

Wow! Pretty much sums up what's going on and the pain felt by people outside the DC-NYC fantasyland.

NoDebt's picture

I'm out of order!  You're out of order!  This whole damned place is out of order!  (Scent of a Woman)

It's called corruption.  Get used to it because it's in it's ascendancy. 

Do you get the feeling that those who are the most corrupt have any fear they will face retribution?  Do they even seem to recognize there is anything wrong with their behavior?  I would say no and no.  So strap in.  Ride's nowhere near over yet.

20834A's picture

I am well aware that corruption has been part of our national history, to some degree. What absolutely terrifies me is that it is now so pervasive and TPTB don't even care if we know it. Dangerous times, because the mask is off.

escargot's picture

You're right about the corruption and the corrupt.

You're wrong about Scent of a Woman.  You're thinking And Justice For All.

Whoa Dammit's picture

Can we still even call what we find ourselves living in in the USA a country? Can we still call the government that ignores the wishes of the majority of the people a government? or should we just start calling it what it is,:a police state, whose only allegiance is to money, that tolerates its people only as long as it can profit from them.

francis_sawyer's picture

Most peoples 99 weeks of unemployment are up already... Time to get in line for your flu shot...

deerhunter's picture

I am helping a friend run for city council in a midwest city of approx 100k residents.  Said city council just awarded a 12 million dollar no bid contract for new communications system for fire department.  Yes,  no other bidders.  One.  Does anyone think money did not change hands under some table in a dimly lit restaurant on a rainy/snowy evening??  We have met the enemy and its name is indifference.  This is not and cannot be maintained.  We have to stand up and make a difference one person at a time or live with the consequences of our inactions.  Maybe I am still jaded enough to think we can still make a difference but hope deferred makes the heart sick.

aerojet's picture

The problem is that your friend stands no chance--even if elected, the knuckle-draggers will threaten him and mess with him endlessly until he toes the line. Nobody is against fire fighters. 

That $12M, is chump change, btw.  Every city council in every city in the country is overrun by real estate developers and their messes.  We're talking billions and billions of misallocated dollars.

H E D G E H O G's picture

ditto here 'hunter. the government is wasting $30 million on refurbshing the Federal building here in my city. The fucking building ITSELF is not worth $5 million! The state just wasted $26 million of Federal stimulus money to put thousands of Cisco routers ($22,000 each) across the state in one room libraries and outlying voluntary fire depatments,etc. These routers can serve Major universities or large cities. Investigation is underway from public outcry? The USA's largest and most covert "Boy Scout Camp" aka state of the art FEMA Camp is being built on thousands of acres in the middle of the state.(Google IT!) We can go on and on, bottom line is that this Homeland Security(government spending) bullshit is out of control. NO  acountability, covert, kickbacks, NO bids, cronyism, pork, etc. By the time the sheeple come around(if ever), it will be too late. Just like a forrest that needs a fire that cleans and renews itself naturally, so goes for the state of affairs in this country.

otto skorzeny's picture

the traitors in the US senate are giving hope to all of the 12 million mexs that they want to make legal with the wave of a wand

Gimp's picture

Unfortunatley the illegals, excuse me "undocumented future citizens" don't understand that this is a ploy to get more registered taxable payers into the system.

Ponzi schemes need more and more people....


trav777's picture


It is to get more registered democraps into the system.  You think these democraps in the Party care if this is a 3rd world country?  Hell, they WANT ONE.  In the 3rd world, people like them get richer and are in power longer...forever.  And they can always hire security.

Mexico, Brazil, Argentina...all have some really nice places, as nice as anywhere on the planet.  The rich people live there.

Gimp's picture

Good point. That is why the rich have no allegiance to country or flag, that is left to the peasants.

falak pema's picture

Hope has died; here is a nail driven into the coffin of the Great Rotation from bonds n cash into assets, by someone who understands that for each buyer ther is a seller and the only movement today is by printing money which just increases PUBLIC debt. 

HUSSMAN: Anyone Touting The 'Great Rotation' Doesn't Understand How Markets Work

Read more:


Dr. Engali's picture

Do not give up your semi-auto "assult rifles" they aren't giving up their full-auto "personal defense weapons"

otto skorzeny's picture

so-if those are for ICE-and we are effectively legalizing illegals-what the fuck do we need ICE for?