Confronting Brutal Facts: The US Market Is A Fly In Search Of A Windscreen

Tyler Durden's picture

Submitted by Tim Price via Sovereign Man blog,

On September 9th, 1965, US Navy pilot James Stockdale was shot down over North Vietnam and seized by a mob.


He would spend the next seven years in Hoa Lo Prison, the infamous “Hanoi Hilton”.


The physical brutality was unspeakable, and the mental torture never stopped. He would be kept in solitary confinement, in total darkness, for four years.


He would be kept in heavy leg-irons for two years and put on a starvation diet.


When told he would be paraded in front of foreign journalists, he slashed his own scalp with a razor and beat himself in the face with a wooden stool so that he would be unrecognizable and useless to the enemy’s press.


When he discovered that his fellow prisoners were being tortured to death, he slashed his wrists to show his torturers that he would not submit to them.


When his guards finally realized that he would die before cooperating, they relented.


The torture of American prisoners ended, and the treatment of all American prisoners of war improved.


Jim Collins, author of the influential study of US businesses, ‘Good to Great’, interviewed Stockdale during his research for the book. How had he found the courage to survive those long, dark years ?


“I never lost faith in the end of the story,” replied Stockdale.


“I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining moment of my life, which in retrospect, I would not trade.”


Collins was silent for a few minutes. The two men walked along, Stockdale with a heavy limp, swinging a stiff leg that had never properly recovered from repeated torture.


Finally, Collins went on to ask another question. Who didn’t make it out ?


"Oh, that’s easy,” replied Stockdale. “The optimists.”


Collins was confused.


“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’


And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’


And Easter would come, and Easter would go. And then Thanksgiving. And then it would be Christmas again. And they died of a broken heart.”

As the two men walked slowly onward, Stockdale turned to Collins.

“This is a very important lesson. You must never confuse faith that you will prevail in the end - which you can never afford to lose - with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

At the risk of stating the blindingly obvious, this is hardly a ‘good news’ market. Ebola. Ukraine. Iraq. Gaza.

In a more narrowly financial sphere, the euro zone economy looks to be slowing, with Italy flirting with a triple dip recession, Portugal suffering a renewed banking crisis, and the ECB on the brink of rolling out QE.

What are the implications for global stocks?

On any fair analysis, the US market in particular is a fly in search of a windscreen.

Using Professor Robert Shiller’s cyclically adjusted price / earnings ratio for the broad US stock market, US stocks have only been more expensive than they are today on two occasions in the past 130 years: in 1929, and in 2000.

Time will tell just how disappointing (both by scale and by duration) the coming years will be for US equity market bulls.

But we’re not interested in markets. We’re interested in value opportunities incorporating a margin of safety.

If the geographic allocations within Greg Fisher’s Asian Prosperity Fund are any guide, those value opportunities are currently most numerous in Japan and Vietnam.

The Asian Prosperity Fund is practically a poster child for the opportunity inherent in global, unconstrained, Ben Graham-style value investing.

Its average price / earnings ratio stands at 9x (versus 17x for the S&P 500); its price / book ratio stands at just one; average dividend yield stands at 4.2%.

And this from a region where long-term economic growth seems entirely plausible rather than a delusional fantasy.

Vice Admiral Stockdale was unequivocal: while we need to confront the “brutal facts” of the marketplace, we also need to keep faith that we will prevail.

To us, that boils down to avoiding conspicuous overvaluation and embracing equally conspicuous value – where poor sentiment is likely to intensify subsequent returns.

In this uniquely oppressive financial environment where the skies are darkening with the prospect of a turn in the interest rates, optimism could be fatal.

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q99x2's picture

The FEDs have no intention of losing that is why they created the DHS and bought all the ammo. They plan to kill us.

RafterManFMJ's picture

A windshield named Ukraine, perhaps?

El Oregonian's picture

Well "Songbird" McCain could never tell you just how terrible the Hanoi Hilton was since he was a collaborator. Hence, the nickname "Songbird". McCain can't even loosen the boot laces of James Stockdale's boots.


TeethVillage88s's picture

Thanks for that info on McCain.

Sovereign Man's Article is a Good Idea and the analogy goes a long way. Most of us can just try to live in the solution instead of blaming others or crying about things. But sometimes life is much tougher. US Politics is asinine of course...Hence John McCain being there.

- Federal Spending, Federal Reserve Monetary Policy, US Wall Street Banking Monopoly System, and the US Stock Market all have a Wind Screen in Common.

Jumbotron's picture

The thing that makes McCain so dangerous is he is still trying to fight the gooks over in Viet Nam and try to assuage his guilt over being a songbird.

So he sends your sons and daughters to die in his stead in the Middle East.

Time to tell McCain to fuck off and die already.   Live with your guilt and anger alone and away from the public with your trophy wife and leave our sons and daughters alone.

TeethVillage88s's picture

Yeah, I heard that US Vets had been petitioning McCain for assistance for Medical Care for Vietnam Vets and Benefits Assistance and for help with MIAs... back in the 1980s.

McCain could have stood for the Vets over the last 30 years.

Instead he told Vets he was done helping them.

He got in the House in 1983, then into the Senate in 1987.

Herd Redirection Committee's picture

I think their primary goal there was: Make sure the public doesn't get to stock these rounds.

They couldn't ban ammo sales, so they bought them up themselves.

Whether they will use them...  I think that decision is in the hands of the individual men and women in the 'service' of the people of America.

ZerOhead's picture

"Whether they will use them...  I think that decision is in the hands of the individual men and women in the 'service' of the people of America."

If they are instructed to use them they will use them. (I am not an optimist)

El Oregonian's picture

Not the boys I know that are embedded for this very reason. They're committed to the principle of liberty.

So take heart.

ZerOhead's picture

The NSA knows who they are.

These terrorists will be liquidated first...

El Oregonian's picture

I think not. You'd be surprised, especially the caliber of the embeds.

himaroid's picture

Not to mention the pop gun caliber of DHS.

Freddie's picture

As of 2013 - 14.6 million licensed American hunters.   My guess is most of them have scoped .308 rifles.

CheapBastard's picture

"They're jealous of our Freedom...."

jaxville's picture

 Hard to imagine ayone with a government job who is committed to liberty.  Hard to imagine the same with a sense of human decency. 

  I suppose there are exceptions out there but current events make those even more exceptional.

Rat Race Winner's picture

I have a "government" job.  Once, I offered a small, time-off incentive for those willing to take a 15 minute computer based course on the US Constitution and Bill of Rights, seeing that they take an oath to "support and defend",  10% took me up on the offer...

Freddie's picture

Ammo is a lot more plentiful now especially .223.

Seize Mars's picture

We're all Palestinians now.

XitSam's picture

They are going to try to enslave us, not kill. Resisters will be shot.

I aim to misbehave.

PS. Admiral Stockdale: my hero.

pakled's picture

"They are going to try to enslave us, not kill. Resisters will be shot."


I think that's about it. That's what the 6 million plus DHS rounds are for. They're erring on the side of caution (it's only Federal Reserve notes).


But, the threshold for who is a "resister" may be quite low. I met A DHS agent once. He was freak. Also reminded of how the police behaved across the nation durihg the height of the Occupy movement. Many were enjoying themselves.


And then there is the quesiton of how extended the "cull the population" movement has become. Of course they may have Ebola for that.

TeethVillage88s's picture


What is a little Fascism between friends buddy? /s joking

USA went Sideways in an Obvious way in 2002. Not sure when the Coup took place and the Constitution was scuttled:

A) 1913 Fed Act
B) 1886 Corporate Personhood
C) 1947 National Security Act
D) 1963 Assassination of JFK
E) 1964 Gulf of Tonkin False Flag
F) 1949 Syrian Coup aided by CIA
G) 1945 US Covert Assistance to Nazis & Set up of Nazi & Fascist Networks in Europe

goldsansstandard's picture

1862 Endof gold as currency in the Us. Establishment of the National Bank oligopoly, and end of Free banking. AfThe money is still green, not gold. This was the real bankster takeover, the Fed just perfected the system put in place by Secretary Chase. Note the name.

TeethVillage88s's picture

Remember the Wizard of Oz.

I heard the story is about how Farmers needed Silver Certificates to have currency to work with. Looks like the Forth Coinage Act put us on a Gold Standard which hit rural people very hard. They needed smaller denominations.

Silver certificates are a type of representative money issued between 1878 and 1964 in the United States as part of its circulation of paper currency.[1] They were produced in response to silver agitation by citizens who were angered by the Fourth Coinage Act, which had effectively placed the United States on a gold standard.[2]

Free silver was a Central United States policy issue in the late 19th century. The Silverites promoted bimetallism, the use of both silver and gold as currency at the ratio of 16 to 1. The issue peaked from 1893 to 1896, when the economy was in a severe depression—called the Panic of 1893—characterized by falling prices (deflation), high unemployment in industrial areas, and severe distress for farmers.[1]

garypaul's picture

I believe this article could also be called "Keeping It Real"

order66's picture

The only quesion that matters is this:

If the economy is doing so well (as reflected by asset prices), why do we need 0% rates?



LawsofPhysics's picture

How else will those bankers get paid and make it possible for the goverment to fund it's liabilities?

Shit, that was easy.

ZerOhead's picture

Fair point...

I can still remember the announcement of the "temporary" action that allowed Investment Banks to become 'Bank Holding Companies' to access tons of free Fed cash until things improved...

What's that? ... 6 fucking years now?


By Robert Schroeder, MarketWatch

WASHINGTON (MarketWatch) -- In yet another extraordinary development for Wall Street, the Federal Reserve said late Sunday night that venerable investment banks Goldman Sachs and Morgan Stanley will become bank holding companies, subjecting themselves to stricter federal oversight.

The Wall Street titans will be allowed to transition into holding companies following a mandatory five-day waiting period, and will be able to take advantage of credit from the Federal Reserve Bank of New York in order to complete the transition.


theprofromdover's picture

5-day waiting period?

I don't think they even had to wait 24hrs

theonewhowaskazu's picture

This article... is very optimistic.

LawsofPhysics's picture

Please, look around, I see a lot of dirty shirts out there.  Wake me when a government adopts a real commodity-backed currency (PMs or otherwise).  Until then, why would I put on a dirtier shirt?

RiderOnTheStorm's picture

Because no one here wants to see you naked!

Squid Viscous's picture

Vietnam, lol... and anyone who went

TabakLover's picture

Talking my book for sure......but it just feels like this time the dip buyers are goona really get hammered.

himaroid's picture

They ask "Why would you want to live in such a collapse scenario?" I gotta believe that there will be an end to the hell, and the chance for a whole new beginning. Thinking it will take extra determination for a middle age guy. "Defining moment" indeed.

SmittyinLA's picture

Sad he had to run for veep and couldn't just watch America burn from a recliner, sadder still America rejected him and Perot in favor of Ameriquest and Bush, and our media didn't help, most didn't even know Stockdale's story, or Perot's for that matter, instead we got the drunken liar legacy.

phaedrus1952's picture

That election in 1992 was a watershed event for me in regards to America as a society and politics in particular.

When an acknowledged rapist (see Juanita Broderick's 60 Minutes interview) was elected president, narrowly beating out a recognized serial killer -  GHW Bush - over two outstanding Americans of demonstrated integrity and intelligence, it was more a reflection to me on America's character as opposed to merely differences in political views.  I have never since looked back with much sense of optimism or pride for this country.

SanfordandSon's picture

Faith is reality based, and reality is faith based - no more, no less.

CHX's picture

Sounds good, but is complete rubbish IMHO, at least in most cases. Reality is whatever is "is", and has nothing to do with what I, you,  or anyone believes. Reality just is. Faith on the other hand may or may not have some anchor in reality. If someone has the faith that there is eternal live and bliss after death then this is hardly a reality, maybe a wish, hope, or simply a thought; a real thought, but that's not reality. It could be true, it may be not, we really do not know.

SanfordandSon's picture

Just don't agree with you.  Watch the movie about the Nobel Prize winner - "A Beautiful Mind".  What "is" to some people is not reality, possibly more than one might think.  This brilliant mathematician lived portions of his life totally not in reality.  Unlike many, once he became aware that whatever "is" wasn't, by faith he believed that whatever "was" actually "wasn't".  You took my statement and read it as whatever is "is" but you looked at it through a predisposed opinion of eternal life.  It's funny, you didn't read and react to my statement based upon your own arguement.  Hope you take my reply as it is intended to be - one of respect to you.

CHX's picture


Respect to you too, and we can just agree to disagree. I have faith that we agree that perceived reality (whatever neurons' works do to our thoughts) is not reality ;-) I just took eternal life as an example of (religious) faith. And no, I do not have a "predisposed opinion" on that topic, as a 99% agnaustic it's a moot point to discuss. Best to you and all. x 


Frank N. Beans's picture

His name was James Bond Stockdale.   Quite the warrior even if you disagree with the politics of the Vietnam War.

sunkeye's picture

Props to a true - TRUE - tough guy - Airman Stockdale.  But I'm still PO'd @ Perot for what he allowed to happen vp debate-wise.

Freddie's picture

Not to be a jerk but his rank when he was shot down was Commander.

Airman is usually an enlisted rank for sailors in naval aviation.  The whole thing is a scam anyway for the banskters like all wars.

Quinvarius's picture

This market has had a nice little technical bounce off of the 200 DMA.  But the fact remains.  It is up entirely on the flow of QE money which is shrinking and ending fast.  No money means no rally.  There is no money coming to chase this bounce and it will be sold.

orangegeek's picture

Q:  What's the last thing to go through a bug's mind when it hits the windshield?


A:  Its ass.

trader1's picture



Death is everywhere
There are flies on the windscreen
For a start
Reminding us
We could be torn apart

Death is everywhere
There are lambs for the slaughter
Waiting to die
And I can sense
The hours slipping by

- Fly on the Windscreen by Depeche Mode
MBB's picture

The world is a total fuck up. Both economically and politically. All you can do is try and pre empt the end result and protect yourself accordingly.

Clesthenes's picture


A major lesson of history is that an attempt to survive tyranny as a lone individual is always a mission of suicide.

Making the same attempt thru the mechanism of a First-Amendment assembly is sometimes successful: nothing else in human history has ever succeeded (only three times).