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The Lessons Of 'Catch-Fools'

Tyler Durden's picture




 

Via Mark J. Grant, author of Out of the Box,

Spain
 
Events are rapidly unfolding in Europe which may bring something more than the “blink, wink and nod” of the famous children’s poem to the forefront of everyone’s thinking. The Prime Minister of Spain and his band of merry men are under investigation on charges of graft. Each time they respond to the charges the responses are louder, higher pitched and stronger in their denial which is leading me to the conclusion that there might be something there. This is often the way of it in politics and when the dial gets turned up to the present level of decibels then there are likely some grains of truth in the allegations. If much more comes to the public attention then Mr. Rajoy’s government could come under a suspicion that is so prevalent that it may topple, first as set-off by the corruption and then as a result of the economic conditions that are now present in Spain. If you paid attention to the equity and bond markets then you would think that the economy is improving but this is, without question, not the case. Spain’s unemployment has hit 26% and is vying with Greece as being the highest in Europe. Catalonia and several other provinces are eyeing  succession while the Spanish economy is deteriorating at a remarkable pace given the projections of the IMF and the European Union. Of course betting upon the projections of these two entities during the last four years would have bankrupted any money manager in Europe or America but they keep on with the fantasies none-the-less as political considerations overshadow common sense by a wide margin.
 
It is not just the Don Quixote game of windmills now in Spain that many truths, if discovered, would lead to the downfall of this government. The Spanish banks, by their own admission, deal in “dynamic provisioning” where capital reserves are surely moved by political will and not economic principles so that when you look at the financial condition of any of their banks, any of them, suspicion is high that funny accounting is the normal course of business in Spain and so the huge and real fear that if the IMF/EU/ECB showed up and did an actual inspection of not just the banks’ books but the sovereign’s records that all kinds of charades might become unmasked. I suspect that the EU is fully aware of the issue which is why they do not wish to come in either as they prefer the blind eye to finding out what they do not wish to know. Capital flows from the central banks, yields drop, reliefs are sighed but it can be no more than a temporary position as actual economic statistics may not only cause social unrest in the spring but have a way of catching up with the perpetrator at some point. It may well be that the leaders in Madrid, Brussels and Berlin think that they are fighting with windmills, it certainly is true that the printing of small pieces of green and blue paper with wild abandon has overshadowed financial fundamentals and that the Draghi promise of unlimited funds has lulled the markets into a restful state where no “unsettling event” will ever happen again but never fear, reality will eventually raise her thorn-pocked head, and then we will all stare once again into the brutish light of a glaring sun. There will be consequences; there are always consequences!
 
Italy
 
The olive oil is flowing, elections are coming and the slope is looking increasingly slippery. “Bunga-Bunga” is echoed once again in the marbled hallways of Florence and Rome, rather remarkable antics may be preferable to the bowing to Berlin that was the hallmark of the Monti administration. There is a general rebellion against austerity by parties of the left and the right and the Italians, with an unemployment rate of 11.1% are, one could state accurately I think; are dissatisfied. The polls are turning rapidly from the hopes of the policy makers in the EU and there is now a general concern in the capitals of Europe. Of course it may be just like Spain where debt limits are ignored, where economic policies have no more value than the paper on which they are written and where extensions are granted as a matter of course because no one has the stomach to do anything else. The debt grows, everything is fine and getting better and the fairy tales increase in grandeur and in number. Cinderella’s foot fits the glass slipper, Sleeping Beauty is resting comfortably and Carlo Collodi’s 1886 famous character, Pinocchio’s, nose is growing in a remarkable fashion but then the Italians are fond of distinctive noses.
 
There is great wisdom in Pinocchio actually beyond what is generally known. At one point the puppet heads into the “Field of Miracles” where he plants his gold and waits for it to grow. There is some disappointment with this outcome in the book as he returns to garner his gold and finds that it has disappeared. Pinocchio then heads off to “Catch-fools” which is a place where everyone has done something exceedingly foolish and suffers as a result. The puppet pleads for restitution with the citizens of “Catchfools” but receiving none; departs. You may recall that later Pinocchio ends up turning into a donkey in Toyland where “everyone plays all day and never works” which is, as the squirrel said in the book, what happens to boys who behave in this manner. Then you may further recall that it wasn’t until the end of the story, after many unpleasant adventures, that Pinocchio was reunited with Geppetto after escaping from the stomach of the “The Terrible Shark.” I fear that this fiction may be foretelling events once again as we appear to be leaving “Catchfools” now and heading into our own rather unpleasant adventures that I believe are to come. You may not have read this book since your childhood but you may wish to review it once again.
 
Events
 
The world presently believes that there is no “event risk” and upon this foothold and the money poured into the streets by the central banks the markets rest in peace. Roads do not go on forever, the day eventually fades into the night and the peace of the morning is often shattered by the shrill cry of the dove being attacked by the falcon. The Great Game is not “Toyland” and great care is now called for before we awaken to find that we have turned into donkeys, or worse, ourselves.
 
"You know, my dear, it isn't safe for a little girl to walk through these woods alone."
 
                       -The Big Bad Wolf

 

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Fri, 02/01/2013 - 11:39 | 3206278 buzzsaw99
buzzsaw99's picture

The bankers did an even more thorough job of ruining europe than they did in the usa.

Fri, 02/01/2013 - 11:47 | 3206309 kliguy38
kliguy38's picture

Time will be the judge of that.....

Fri, 02/01/2013 - 11:46 | 3206313 buzzsaw99
buzzsaw99's picture

Spain’s unemployment has hit 26% and is vying with Greece as being the highest in Europe.

Fri, 02/01/2013 - 11:57 | 3206356 kliguy38
kliguy38's picture

We'll look back in 5 years and wish we had 26% unemployment....right now if we reported our real unemployment it would be over 20%....Even the gov's U-6 in the mid teens is not reflective of our real unemployment. On the other hand, things are good for the bedpan industry and Big Pharma psychotropics and "homeland terror prevention".........green shoots......

Fri, 02/01/2013 - 12:19 | 3206405 hedgeless_horseman
hedgeless_horseman's picture

 

 

The world presently believes that there is no “event risk” and upon this foothold and the money poured into the streets by the central banks the markets rest in peace. 

Remind me again...what does Taleb say about the turkey and the farmer? 

 

Fri, 02/01/2013 - 12:42 | 3206479 SafelyGraze
SafelyGraze's picture

mister taleb says turkey should be observing the increased inflow of rice and vegetables at the farmer's house. and beer.

these foodstuffs portend a convivial ritualistic celebration of epicurean excess, which will ultimately resut in the carnal music-fest that characterizes thanksgiving around the world, with rogue drunkards relieving themselves in the pens on the guinea-fowl and turkey alike. 

 

Fri, 02/01/2013 - 13:04 | 3206553 Enslavethechild...
EnslavethechildrenforBen's picture

There is no such thing as paper money. Gold and Silver are money. Paper is counterfeit money, they call it currency because it flows away.

Fri, 02/01/2013 - 14:16 | 3206609 Manthong
Manthong's picture

"Gold is money, everything else is credit."

-J.P. Morgan

I believe that silver was beneath ol’ JP because back before he and his cohorts sent us all off on the road to serfdom, valuations were not artificial and banks held gold as the ultimate reserve for their fractional Ponzi.

Silver was money for the masses and moved pretty much freely between the government treasury/mint and the people.

He would include silver today were he here and not in hell.

 

Fri, 02/01/2013 - 12:23 | 3206425 buzzsaw99
buzzsaw99's picture

And if they reported their "real" unemployment number it would be over 50%. Do you think the usa is the only one that fudges numbers?

Fri, 02/01/2013 - 12:00 | 3206362 negative rates
negative rates's picture

Once our unfunded liabilities are included on the books, the usa has the worst balance sheet in all catagoies, but hey, lets over look that and target anyone not competent enough to notice.

Fri, 02/01/2013 - 12:57 | 3206501 TheGardener
TheGardener's picture

Germany is not far behind on real unemployment, it
is just that the PFIIGS beggars have been disincentivized
to massage their real numbers downwards, after all they
are begging and should be exaggerating if they could after
years of fudging their numbers downward too.

Similar to the 99 weeks in the US, Germany limits unemployment benefits and conveniently bases her statistics
on those claimants.

The next level unemployed people get handed down to in the social mafia industry`s level of humanity is no longer calculated on years worked as on the former.

They also no longer have any rights including human rights,
(but dictators love those cynical non-rights) but in order to qualify for further benefits they have to leave their
self respect on the wardrobe and disclose anything dear personal to them, whether it be 20 bucks from grandma or the boyfriend occasionally staying over (all deducted from benefits, of course). Safe disability or taking care of
children they need to be willing and able to work to
collect any benefits under the scheme, which sounds reasonable to many.

But signing up for full employability and not being counted as unemployed is just statistical noice , I assume.

Fri, 02/01/2013 - 11:42 | 3206294 caimen garou
caimen garou's picture

yes and everyone is believing what obamocchio is preaching! forward catch-fools!

Fri, 02/01/2013 - 13:11 | 3206580 Colonial Intent
Colonial Intent's picture

In 30-40 years the only time you'll even hear the Republicans mentioned is when they mount a "parade" and block traffic in some midwestern or southern village. They will be outnumbered by "curious onlookers", taunted by the children and generally dismissed as they motor past in their "mobility scooters" shouting "we gotta take back our America".

Fri, 02/01/2013 - 11:44 | 3206305 Xue
Xue's picture

No quotes from The Wizard this time? I'm quite disappointed..

Fri, 02/01/2013 - 11:54 | 3206348 SheepDog-One
SheepDog-One's picture

Keepin it Fight Club reelz...quote of the day for you- 'Stickin feathers up your butt does NOT make you a CHICKEN!'

Fri, 02/01/2013 - 12:09 | 3206389 caimen garou
caimen garou's picture

keep up with the theme xue, it's not hard to do. just ask the tylers

Fri, 02/01/2013 - 11:52 | 3206317 SheepDog-One
SheepDog-One's picture

So some bad shits gonna happen sooner or later....but once again it's definitely not today! Oh no, not today not today...we're having an equity fiesta!!

Perhaps the excuse can now be '2016 election season for ObaMao'? Seemed to work well for all of last year at least....and continue on aftwards when everyone said the shit waves would come crashing back in right after election. Total bullshit world. 

Shit Waves. shit waves - YouTube

Fri, 02/01/2013 - 11:51 | 3206328 Inthemix96
Inthemix96's picture

To be fair, its not just Europe, its the whole fucking world thats fucked.

Thats what banking, fiat fucking spend today with fraud, and pay back tommorow with added fraud, while paying corrupt fucking bankers and politicians with even more fraud has baked into the cake.

A whole fraudulent shit smelling pastry full of deciept and corruption.

Cunts.  Each. And. Every. One.

Fri, 02/01/2013 - 12:55 | 3206526 Obama4Ever
Obama4Ever's picture

I wish there was less corruption in the world or more opportunity to take advantage of it.

Fri, 02/01/2013 - 11:59 | 3206334 Quinvarius
Quinvarius's picture

30 minutes from Mises.org on why the markets and the whole planet are so messed up:

http://www.youtube.com/watch?v=MJQXlx0jmzM

This is what Keynesianism is really about.  A fantastical Socialist idea used to justify government control and corruption.  Everything from rigging stock markets to murder was directly espoused by Keynes.  It is more than just printing money.  It is pure delusional insanity.  30 minutes from 1997 will enlighten you.  You will see this is the script we have been following.

Fri, 02/01/2013 - 14:50 | 3206896 steelhead23
steelhead23's picture

Why must all idiotic government behavior be labeled socialist?  Further, Keynes is being blamed for actions his thesis would never support - like gifting $800 B to the banks (including foreign banks).  A more socialistic response would have been to nationalize the banks and send their criminal leaders to jail.  I see what is happening more as a wealth transfer from working class folks to ultra-wealthy folks - a bit unlike socialism, don't you think?

Sat, 02/02/2013 - 09:40 | 3208906 Quinvarius
Quinvarius's picture

Don't talk out your butt until you actually listen to the presentation.  You sound like an idiot with that reply to the link.  Seriously.  This IS his plan.  THis is EXACTLY what he wanted to do.  Cripes man.  Just STFU and listen if you can't understand what the big boys are saying.

Bro, do you even lift?

Fri, 02/01/2013 - 17:56 | 3207652 e-recep
e-recep's picture

enough already, socialism and crony capitalism are two different shits.

Sat, 02/02/2013 - 09:37 | 3208913 Quinvarius
Quinvarius's picture

Bro, you don't even lift.

Fri, 02/01/2013 - 11:53 | 3206341 HedgeHammer
HedgeHammer's picture

so the huge and real fear that if the IMF/EU/ECB showed up and did an actual inspection

 

Give me a break , these fuctards are all complicit with this entire global market. Seriously, Pinochio is the best you could come up with. We all know that manipulation and lies are the new norm so please tell me something I don't allready know and this time try the more adult approach.

 

Fri, 02/01/2013 - 12:27 | 3206350 buzzsaw99
buzzsaw99's picture

the imf, ecb, fed, etc., are the ones that need inspecting and then shut them down. imf exists so that bankers never take a loss. the fed exists to make sure the bankers never take a loss. they are great public institutions serving the public at large for generations. [/sarc.]

Fri, 02/01/2013 - 11:57 | 3206354 adr
adr's picture

Fuck the fucking fuckers with ever larger fucking fucks to be fucked over fuck with fucking fucking fuck.

Sorry, I can't argue with anyone anymore because somehow facts have become a figment of my imagination. I point to data to back up my fact, that I got from someone else, just so it isn't me creating the data, and yes somehow I made up the data and the fact is somehow just my opinion.

I think I'll just quit my job before the company goes bakrupt. I hear I wil probably be able to stay in my house for almost three years, maybe longer, and get $65k in welafre benefits. I also hear me goingon benefits helps the economy. Maybe if everyone who works at my company quits and goes on welfare, we can help the economy so much that our company won't go bankrupt.

WHAT A FLAWLESS UNBELIEVABLY SIMPLE PLAN!!!!

To keep people working and grow the economy, we all have to stop working. God Nacy Pelosi was right. If all of us are getting paid to not work, we can all spend money and grow the economy. Then we can have even more people stop working and grow the economy more. CAN YOU IMAGINE WHAT KIND OF GROWTH WE WOULD HAVE IF CHINA STOPS WORKING!!!!

Jesus fucking christ, what world am I living in? You can only take so much bullshit before you explode.

Fri, 02/01/2013 - 12:25 | 3206426 farmerjohn2112
farmerjohn2112's picture

+1 for such prosaic use of 'fuck'

Fri, 02/01/2013 - 12:29 | 3206440 buzzsaw99
buzzsaw99's picture

carpet f bomb them into submission. lulz

Fri, 02/01/2013 - 11:59 | 3206357 SmoothCoolSmoke
SmoothCoolSmoke's picture

Dow 14000.  Is Mr. Grant, perhaps, the broken clock........... that is never right?

Fri, 02/01/2013 - 12:26 | 3206360 alfred b.
alfred b.'s picture

 

      If Spain admits to a 25% unemployment rate while, on the other hand the US admits to only a 7.9% rate....in which of these 2 countries would you think Pinochio lives??   

 

   

Fri, 02/01/2013 - 12:10 | 3206393 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Perhaps all is nought in such analysis, while the Central Banks are running / funding the Governments in concert, globally.

We are all Chinese now. Hear that one, An Anonymous?

One global, centrally planned economy. Everyone is surveiled. Machines keep the equilibrium and skew to the right in inflation and asset prices.

Markets are just there to give an illusion of freedom.

Bread lines in the US ? No lines, EBT cards. No stigma, no hassle. EBT is free, FED prints for free.Government borrows for free.

The Chinese worked hard to employ Chinese. $3Tn forex reserves? It's just an illusion. Buy some hard assets around the globe, get sucked further into mutually assured gratification. America is hardly working. The playing field on labor cost has not been leveled enough yet, so bread and circus. In the meanwhile, robots will take new manufacturing jobs. It's a dilemma. But no one is looking for a solution, apparently. Just keep printing, an infinite, virtuous circle. Inflation? Hah, no worries, it will NEVER HAPPEN, they say.

 

Fri, 02/01/2013 - 12:12 | 3206400 Obama4Ever
Obama4Ever's picture

Yawn.

I wish any post on ZH didn't consist of 95% rehash of what's been endlessly repeated and 5% of new info.

Fri, 02/01/2013 - 12:53 | 3206509 Shizzmoney
Shizzmoney's picture

This article reminds me of a poker proverb:

If they look pretty poor..........they probably play pretty bad.

If they look really rich.............they also, probably play pretty bad.

Fri, 02/01/2013 - 14:44 | 3206874 dark pools of soros
dark pools of soros's picture

Spain must not have enough depraved, perverted, sexual deviants that can be controlled to keep the corruption controlled like a real 1st world country

Fri, 02/01/2013 - 14:57 | 3206921 Apostate2
Apostate2's picture

Thank you Mr Grant. Had not read this tale in many years. Sparked a few synapses. And it was written for the young, who all to swiftly forget the halting places. 

Fri, 02/01/2013 - 14:59 | 3206934 Herkimer Jerkimer
Herkimer Jerkimer's picture

'

'

'

'

Anyone who thinks Berlesconi wasn't up to his eyeballs in the crap going on over there, remember, he was the boss only 3 years ago, is a fool.

•J•
V-V

Sat, 02/02/2013 - 00:20 | 3208541 Element
Element's picture

So ... can we waterboard him to find out? ... I mean it's not like it's torture, and they all seem ok with it ... and its likely to be a whole lot more interesting than reading children's stories on zh.

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