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What Hardcore Pornography Can Teach Us About Asset Bubbles

Tyler Durden's picture




 

Submitted by Omid Malekan via Visual Stories blog,

Last week, the stock of an otherwise unknown company named Cynk Technology went parabolic, even though per its own filings the company had only 1 employee, no income or revenues and a poor looking website as its only asset. Although this sort of shenanigan is common in the shadowy world of micro-cap penny stocks, what caught everyone’s attention was the fact that at one point the company reached a value of over $5 billion, reminding some of similar moves in worthless stocks at the peak of the last stock market bubble.

A few weeks before that, the cost of borrowing money for the Spanish government collapsed to an all-time low. The biggest determinant of what interest a borrower has to pay is its perceived ability to repay the loan, and it was only a few years ago that Spanish rates spiked to almost triple what they are today on account of an economic crisis born out of too much debt and not enough growth. So what changed for Spain that led the market to suddenly believe its now safer than ever? It certainly wasn’t the amount of debt the country still carries:

 

Nor was it a rebound in economic growth, or a significant drop in unemployment:

 

The only explanation that remains is a sharp appetite for risk.

Turning to something less pedantic, the contemporary art market has gone parabolic as well, and whispers of a bubble abound. What is unusual about the current art boom is the fact that buyers are tripping over themselves to bid up the works of living and active artists, where theoretically there is endless supply.

Some may argue that contemporary art is the playground of stuffy society types and has nothing to do with the rest of society, and they would mostly be right. So what’s the furthest place we can go from the confines of a fancy auction house? How about a mechanic’s garage. The classic car market is also on fire, and the gains are not limited to just fancy German sports cars:

 

It wasn’t that long ago that everyone – including the hardcore car guys – understood a car to be a “depreciating asset” – something that almost always lost value over time and should only be purchased as a toy by those with cash to burn.  Now any old Porche is an investment in your kids future.

If real estate is more your speed, then there is the booming New York City luxury apartment market. Current stories of people entering complex contracts to buy expensive housing a few days after only seeing a floor plan are unheard of, except for right at the peak of the last property bubble. One57, the building made famous by its crane collapsing during Hurricane Sandy, will be the tallest residential building in New York when its finished this year, and it reportedly has multiple units in contract to be sold for over $90 Million. Rumors have it that some brokers are pitching the units to be as safe as Treasury Bonds. Not to be outdone, a few blocks away is 432 Park Ave, which when completed in 2015 will not only be the tallest residential building in New York, but its tallest building period. Since no real estate bubble is complete without plans in the works for something even more outlandish, enter the proposed Nordstrom Tower, also on 57th street. This one will not only top all other buildings in New York, but all residential buildings anywhere on the planet.

Its hard to have an asset bubble without a concurrent debt binge, so here we areDon’t worry if you don’t understand the technical details of the latter article. The main takeaway is that what is happening now is one of the few things that most people agreed was a major cause of the last financial crisis, so much so that the wildly popular This American Life radio program dedicated a full episode to it.

Exactly 50 years ago last month the US Supreme Court ruled on the now famous case of Jacobellis v. OhioAt stake was whether a French movie with graphic sexual content could be outlawed by the state via its obscenity laws. The court ruled that it could not because the film wasn’t hardcore pornography. How could they tell? In an explanation that has now turned into one of the most famous quotes in court history, Justice Potter Stewart explained that although he could not define exactly what hardcore porn was, “I know it when I see it”

Like porn, asset bubbles are also hard to define, but given our economic history, and especially our recent economic history, we know it when we see it, and now we see it everywhere. There is a good reason why this was one of the most emailed stories in the New York Times recently. We all see it. Apparently the only people that don’t see the bubbles are the people creating them.

The one common diagnosis by experts in the worlds of stocks, art, cars, real estate and debt is the the role central bank money printing is playing in their industry. Since the start of the financial crisis 6 years ago banks like the Federal Reserve, the European Central Bank and the Bank of Japan have printed trillions of dollars. We know that money has not gone towards much of the real economy because growth remains weak, jobs remain scarce and wages remain low. But the money had to go somewhere, and the asset bubbles listed above show us where. Although we’ve all seen the destruction that bubbles cause when they burst first hand, the Central Banks go on pumping.

When the last bubble burst, only 8 years after the previous one, many asked why the Fed and other Central Banks didn’t see the problem coming. Then Fed Chairman Ben Bernanke, the godfather and primary architect of the current money printing regime, had this to say on the subject:  “Although the house price bubble appears obvious in retrospect – all bubbles appear obvious in retrospect.” In other words, you can’t see the bubble when its happening. Bernanke’s professional and philosophical heir Janet Yellen has recently said its too hard to see if Federal Reserve policies are leading to bubbles, so they’ll just keep printing as if everything is fine. 

When our current asset bubbles finally burst and cause the usual havoc, the central bankers and economists that helped create them will yet again claim they could not have seen this coming. This time around we will know they are lying, and would be wise to ask what drove their willful ignorance.

 

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Mon, 07/14/2014 - 13:25 | 4955973 Satan
Satan's picture

Ask the SEC...

Mon, 07/14/2014 - 13:39 | 4955982 hedgeless_horseman
hedgeless_horseman's picture

 

 

Not only are the tits in porn fake, but according to The Atlantic, so are claims that the recovery is mostly part-time jobs...

The Spectacular Myth of Obama's Part-Time America—in 5 Graphs

 

But what about part-time employment for non-economic reasons? The story here is short and sweet: There is no story here.
The share of Americans working part-time for personal reasons—they're
in school; they're raising kids; they're ill—is flat and trending down,
according to the San Francisco Fed.

According to The Fed, everything is totally fine with this recovery that was engineered by The Fed

Mon, 07/14/2014 - 13:40 | 4956013 TBT or not TBT
TBT or not TBT's picture

Did you use the search term "natural"?   Don't be so hard on pornography.  

Mon, 07/14/2014 - 13:53 | 4956043 hedgeless_horseman
hedgeless_horseman's picture

 

 

The best way to be sure is to go back to a time before they manipulated the numbers...

Mon, 07/14/2014 - 13:57 | 4956058 TBT or not TBT
TBT or not TBT's picture

I posit a theory, that people manipulate numbers, subconsciously or unconsciously, in order to have permission to manipulate....those.  

Mon, 07/14/2014 - 14:05 | 4956080 old naughty
old naughty's picture

Jacqueline and Sophia !!!

Mon, 07/14/2014 - 14:13 | 4956140 SoilMyselfRotten
SoilMyselfRotten's picture

And here i thought Paul Wolfowitz made up that line, the douche

Mon, 07/14/2014 - 15:43 | 4956552 CheapBastard
CheapBastard's picture

HH, I was surprised to see that Atlantic aticle myself.

Mon, 07/14/2014 - 15:17 | 4956418 teslaberry
teslaberry's picture

HEDGLESS---you old fart. those picture are manipulated. the makeup clothing and photoshopped or other methods of photo-manipulation. 

 

i know the classic beauties are lovely to look at, but it's all from the marketing age of magazines. and manipuation is as par for the course in the 50's as now. 

you old farty fart.

Mon, 07/14/2014 - 13:58 | 4956062 post turtle saver
post turtle saver's picture

more posts like this please

Mon, 07/14/2014 - 15:05 | 4956348 HardAssets
HardAssets's picture

I didn't bother reading the article - just charts, no pics.

Thankfully, the comments section makes up for that (and will hopefully offer more of the same).

Mon, 07/14/2014 - 14:06 | 4956082 sleigher
sleigher's picture

They really don't make 'em like that anymore do they...

Mon, 07/14/2014 - 22:37 | 4957818 HardAssets
HardAssets's picture

Its nice to see women who are beautiful and who don't have faddish tatoos from head to foot. Nowadays they seem to be copying Army sargeants, outlaw bikers, or cons in prison.

Tue, 07/15/2014 - 05:26 | 4958286 IronForge
IronForge's picture

Copying?

With all due respect, those women are probably dating them - or - "are" among them.

It would appear to be part of the couterculture in most Modern Societies.

Mon, 07/14/2014 - 14:07 | 4956085 New_Meat
New_Meat's picture

whew!!!

thanks H_H ;-)

Mon, 07/14/2014 - 14:33 | 4956228 Whalley World
Whalley World's picture

Boy, do I miss Robo Traders commentary, never a shortage of skin.

Mon, 07/14/2014 - 20:06 | 4957453 Fish Gone Bad
Fish Gone Bad's picture

Yeah, Robos post were pretty much eye bleach.

Mon, 07/14/2014 - 15:58 | 4956628 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

I think I prefer living in our modern times for obvious reasons, but thanks.

Mon, 07/14/2014 - 17:53 | 4957078 TBT or not TBT
TBT or not TBT's picture

I posit a theory, that people manipulate numbers, subconsciously or unconsciously, in order to have permission to manipulate....those.  

Mon, 07/14/2014 - 23:13 | 4957914 Wild Theories
Wild Theories's picture

I've been told by a female friend, on no uncertain terms, that's exactly why those dresses cost such an exhorbitant amount, they have hydraulics built-in.

 

I am also replying just for the sake of replying to pics of hot chick with tits.

Tue, 07/15/2014 - 07:43 | 4958429 SmackDaddy
SmackDaddy's picture

i hate being critical of women's' bodies (they do enough of that).  but look at the legs on that first picture.  that's from a lifestyle of fad diets and sitting down a lot.  or just bad genetics.  in either case, not good breedin' stock.  I need a bitch a little sturdier than that....

Mon, 07/14/2014 - 19:46 | 4957407 r00t61
r00t61's picture

If you want to be depressed, read the comments on the Atlantic article linked by HH, and see in its full glory how many people still believe in "This is all Bush / Obama's fault" ideology.

Mon, 07/14/2014 - 23:45 | 4957994 StychoKiller
StychoKiller's picture

Well then, let's GET REAL:  Danni Ashe FTW!

Mon, 07/14/2014 - 13:30 | 4955992 I am more equal...
I am more equal than others's picture

 

 

The valuations are like erections and growing larger with anticipation only to find that it is Pee Wee Herman waiting breathlessly under the covers.

The secret word for today is....

     wasted wad

Mon, 07/14/2014 - 13:44 | 4956021 slaughterer
slaughterer's picture

BREAKING
ECB's Draghi says the ECB is "Positive" on NFLX, TSLA, PCLN, AMZN, and CYNK.

Now that is porn. 

Mon, 07/14/2014 - 13:26 | 4955975 New_Meat
New_Meat's picture

where are the pictures???

Mon, 07/14/2014 - 14:18 | 4956163 tarsubil
tarsubil's picture

In my neocon days, I watched O'Reilly and was always bemused by his using of boobs to string along his audience. He'd start off with what are your kids doing at spring break? story showing girls in bikinis, then would talk about other stuff until the last 30 seconds and have some worthless story with bikinis in it.

Well played zerohedge.

Mon, 07/14/2014 - 13:26 | 4955976 Jigsaw
Jigsaw's picture

Porn Bitchez

Mon, 07/14/2014 - 13:27 | 4955980 Muppet
Muppet's picture

Pornography is more interesting than bubbles as this article makes abundantly clear.  

Mon, 07/14/2014 - 14:02 | 4956073 pods
pods's picture

Unless her name is Bubbles.

pods

Mon, 07/14/2014 - 23:55 | 4958012 StychoKiller
StychoKiller's picture

Dixie Bubbles (NSFW), her boobs aren't real, but her legs most certainly are!

Mon, 07/14/2014 - 13:28 | 4955984 newdoobie
newdoobie's picture

all it takes is a little prick

Mon, 07/14/2014 - 13:46 | 4956031 Agent P
Agent P's picture

So she says to me, "Who do you expect to please with that little thing?" so I told her, "Just me, baby, just me."

Mon, 07/14/2014 - 13:28 | 4955986 Otto Zitte
Otto Zitte's picture

Enjoy your STDs. Your children will.

Mon, 07/14/2014 - 13:29 | 4955991 Shizzmoney
Shizzmoney's picture

Who pays for porn anymore?

Mon, 07/14/2014 - 13:43 | 4956022 TBT or not TBT
TBT or not TBT's picture

Someone is subsidizing it.   My bet is on George Soros more so than the Kochs, given their propensities, but the latter would make for better headlines.  

Mon, 07/14/2014 - 13:30 | 4955995 Make_Mine_A_Double
Make_Mine_A_Double's picture

Wait..what???

Spanish bank porn??

 

Mon, 07/14/2014 - 15:49 | 4956577 TheFourthStooge-ing
TheFourthStooge-ing's picture

Go ahead, take a peek under that Spiderman® beach towel.

You know you want to.

Mon, 07/14/2014 - 13:33 | 4955998 SillySalesmanQu...
SillySalesmanQuestion's picture

I see porn all the time, tv, commercials, etc. If someone asks if I've seen it, I just say "I don't know..." kinda like the SEC & DOJ.

Mon, 07/14/2014 - 13:46 | 4956030 TBT or not TBT
TBT or not TBT's picture

In European shampoo ads, the women in their shower have nice young lathered up tits on display, in primetime, since decades now.   Beaches are topless or clothing optional, mostly, on the continent.   You should see them playing frisbee.   

Mon, 07/14/2014 - 14:09 | 4956101 BobTheSlob
BobTheSlob's picture

That all sounds good in theory, then some fat slob shows up wearing a pair of speedos.

Mon, 07/14/2014 - 15:46 | 4956561 CheapBastard
CheapBastard's picture

TBT, I'm kinda glad the beaches in merika are not topless. Might turn me off to sex forever seeing those Walmart Whales stuffed into tiny neon bikinis.

Mon, 07/14/2014 - 13:38 | 4956009 q99x2
q99x2's picture

Then  and now roadshow items have decreased in value.

Mon, 07/14/2014 - 13:41 | 4956017 Make_Mine_A_Double
Make_Mine_A_Double's picture

I happened to be in a large mall for the first time in years last week and seems like the only growth industry is whore wear for pre teen girls, hard core whore wear for teenage girls and over the hill aging porn star look for young adult females.

Would have to say the porn industry has enough raw material here in the USSA to keep their impute costs down for a generation.

Mon, 07/14/2014 - 13:47 | 4956035 p00k1e
p00k1e's picture

The only thing left to monetize is booty? 

Mon, 07/14/2014 - 14:10 | 4956109 Platinum
Platinum's picture

Hedging buns?

Mon, 07/14/2014 - 14:07 | 4956087 BobTheSlob
BobTheSlob's picture

Well everyone is going to need gainful employment once the bubble does pop! Nothing like preparation.

Mon, 07/14/2014 - 13:45 | 4956025 Thomas Aquinas
Thomas Aquinas's picture

"The straight line rules both itself and the crooked line"- Aristotle (De Anima 1;5)

Mon, 07/14/2014 - 13:46 | 4956026 alexcojones
alexcojones's picture

"Let he who has never Porned, cast the first Prude Stone."

What Jesus might have said, had He been bored in Porn Valley

Mon, 07/14/2014 - 13:52 | 4956050 TBT or not TBT
TBT or not TBT's picture

Boredom is quite the motivator.  

Mon, 07/14/2014 - 15:31 | 4956502 kaiserhoff
kaiserhoff's picture

The remark you are paraphrasing, "let he among you, who is without sin, cast the first stone,"  was my favorite as a child, but no Jew named Jesus ever said it.  It does not appear in any manuscripts before the middle ages.

  Source:  Bart Ehrman - Misquoting Jesus.

Mon, 07/14/2014 - 13:47 | 4956036 i_call_you_my_base
i_call_you_my_base's picture

They see it coming, they saw the last one coming, blowing bubbles is their goal. The only mistake this author made was to ever believe the fed in the first place.

Mon, 07/14/2014 - 13:47 | 4956037 alexcojones
alexcojones's picture

Porn ? Hardcore? Ass Eats? Bubble?

Zerohedge: Where Onion Writers go to retire

 

Mon, 07/14/2014 - 13:51 | 4956044 TBT or not TBT
TBT or not TBT's picture

.

Mon, 07/14/2014 - 13:52 | 4956048 phijammaslamma
phijammaslamma's picture

 

"It's not a bubble if it doesn't pop."

Mon, 07/14/2014 - 13:55 | 4956053 frankTHE COIN
frankTHE COIN's picture

Is quicksand still quicksand if you don't fall into it ?

Mon, 07/14/2014 - 13:59 | 4956055 HardlyZero
HardlyZero's picture

Spain went over the 93.9% Debt/GDP top in 2014...membership has its price.

Spanish Caravan...Doors.

Carry me Caravan take me away
Take me to Portugal, take me to Spain
Andalusia with fields full of grain
I have to see you again and again
Take me, Spanish Caravan
Yes, I know you can

Trade winds find Galleons lost in the sea
I know where treasure is waiting for me
Silver and gold in the mountains of Spain
I have to see you again and again
Take me, Spanish Caravan
Yes, I know you can

Mon, 07/14/2014 - 14:00 | 4956070 worbsid
worbsid's picture

There are no bubbles until they break.  What appears to be bubbles are simply certain sectors of the economy advancing rapidly and who couldn't like that?  When they break, "WOW!, that was a bubble.  Never saw that one coming." It seems like food prices and gas prices are advancing.  Are those bubbles?  Can we have a reverse bubble?  Was the stock market in a reverse bubble about March 2009?  Was silver in a bubble at $48 or gold at $1800+?  Did you see that as a bubble and sell all you had to buy it back later and make 50% or more on the trade?  There are no bubbles until they break and whoda thunk?  

Mon, 07/14/2014 - 14:03 | 4956072 Bemused Observer
Bemused Observer's picture

If this market is like porn, then they're faking the penetration and cum shots. And it's obvious enough to be distracting.

Mon, 07/14/2014 - 14:16 | 4956113 palmereldritch
palmereldritch's picture

From the article above:

One57, the building made famous by its crane collapsing during Hurricane Sandy, will be the tallest residential building in New York when its finished this year, and it reportedly has multiple units in contract to be sold for over $90 Million. Rumors have it that some brokers are pitching the units to be as safe as Treasury Bonds.

And we all know how well living the high life worked out when Hurricane Sandy hit...such an investment pitch, as hilarious as it is on its face, would probably be more accurately described as the Bitcoin of Real Estate Investment...to wit:

http://www.forbes.com/sites/morganbrennan/2013/04/30/rise-of-the-super-towers-the-next-big-thing-in-luxury-housing/
 [snip] Expensive ultrafast elevators must be installed too, since regular models slow down as they move higher into the air, especially on windy days. New buildings are including back-up generators that can keep lifts running in a blackout.

But for the most part these facilities are grossly insufficient and do not serve individual units:

 http://www.thestar.com/business/2014/06/18/high_rises_need_backup_generators_says_icestorm_panel.html

Or the emergency services are intentionally reduced:

 http://articles.sun-sentinel.com/2011-10-11/business/fl-backup-generators-condocol-20111011_1_generators-condo-communities-condo-associations

That’s a long walk down a phallic pursuit of architectural largesse for groceries when the power goes out for an extended time period....good luck with that.

 

Mon, 07/14/2014 - 15:00 | 4956169 explosivo
explosivo's picture

Bubbles aren't difficult to define. They are the artificially inflated prices of asssets caused by excess money available for investement in the economy. It is the direct result of fractional reserve lending in the banking system. 

Mon, 07/14/2014 - 14:24 | 4956191 reTARD
reTARD's picture

Where's the anal report?

Mon, 07/14/2014 - 14:53 | 4956309 johand inmywallet
johand inmywallet's picture

Whats the ticker for youporn?

Mon, 07/14/2014 - 15:19 | 4956431 teslaberry
teslaberry's picture

uncle boron's rice, with TEN NEUTRONS!!!! FOR EXTRA HEALTH.

Mon, 07/14/2014 - 15:23 | 4956461 Goldilocks
Goldilocks's picture

Bombing of Gaza children gives me “orgasm”: Israelis celebrate slaughter on Facebook
http://electronicintifada.net/blogs/patrick-strickland/bombing-gaza-chil...

Mon, 07/14/2014 - 15:35 | 4956520 zipit
zipit's picture

Tease!

Mon, 07/14/2014 - 15:51 | 4956582 teslaberry
teslaberry's picture

i thougt the punchline was going to have to do with something like shoving it in the ASSet. popping your was of cash in the ass. or other some such anal sex metaphor to hard core porn. 

 

why is it that in pornography women seem to always love and desire anal sex, but in real life, this simply IS NOT the case. 

 

furthermore. why is that MEN WANT ANAL SEX WITH WOMEN ALL THE TIME IN PORN? 

IN REAL LIFE , I ALSO FIND THIS IS NOT AS COMMON. 

 

 

Tue, 07/15/2014 - 05:42 | 4958296 IronForge
IronForge's picture

I've concluded that it invovles some sort of Ritual Sex, Sexual Debasement, Hedonistic Gratification via every means possible(ncluding Paraphillia), and Sex Magic(that "circles" back to Ritual Sex). 

Nothing much than a tease for the Normal, Traditional Heterosexual Couple who actually engage in the acts "In Intimacy".

Therein lie the causes for Cognitive Dissonance regarding the motivations inherent in Pr0n and "Marriage". 

A bit simiar to the Cognitive Dissonance observed during Asset Bubbles, Devaluation of Currencies, Market Rigging, and other acts of disingenuous financial/asset schemes.

Interesting to note the Pr0n Analogy - even down to the Crashing and Burning in the End. 

Tue, 07/15/2014 - 07:01 | 4958393 AdvancingTime
AdvancingTime's picture

The Federal Reserve has failed to take serious efforts in pushing the government to take the necessary reforms needed to move the economy forward. Policy makers aided by the media thrive at presenting simplistic answers that solve both economic and society’s problems with little or no effort required from the masses.

What started as a program to support and prop up the economy has morphed into the main driver of economic data. Between the low interest rates that has propelled investors into high risk assets in search of a positive return on their money, and money being pumped into the system, the markets have become distorted and disconnected from the economy. The idea that investors will continue to pour money into the sky high equity market is flawed. More on this subject in the article below.

 http://brucewilds.blogspot.com/2014/06/exit-strategy-from-qe-remains-elu...

Do NOT follow this link or you will be banned from the site!