This page has been archived and commenting is disabled.
Trouble A'brewing; This Time It Is Different
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
This time it is different, but not in the way that the cheerleaders intended.
We've seen a lot of extraordinary extremes and divergences in the past fifteen years, but nothing quite like this. Courtesy of longtime correspondent B.C., here is a chart of the Chicago Fed's National Financial Conditions Index, the Fed Funds Rate and the 1-Year Treasury Yield, and a measure of corporate bonds and the 10-year Treasury yield.
When the National Financial Conditions Index rises above the zero line, bad things tend to happen to the stock market and the economy. This index spiked before the recessions in 1977, 1981, 2000 and 2008, and rose before the stock market nosedived in 1987.
Meanwhile, the Fed Funds Rate and the 1-Year Treasury Yield have been bouncing along the zero boundary since late 2008. In the past 40 years, we've never seen the Fed Funds Rate and the 1-Year Treasury Yield effectively at zero for such an extended time, and the National Financial Conditions Index moving decisively higher.
This time it is different, but not in the way that the cheerleaders intended.
»
- 48142 reads
- Printer-friendly version
- Send to friend
- advertisements -
They will just seasonally adjust the GDP throughout the recession the whole time praying that nobody notices.
Here's the FRED Chicago Fed Adjusted National Financial Conditions Index Chart:
https://research.stlouisfed.org/fred2/series/ANFCI
Exhaustion. And what happens after that? A nap or a melt down. I expect the latter.
Sure it's always different. Different bullshit on any different day.
the next one won't be a recession....it will be depression with street violence.
Your chocolate rations will increase from 40 grams to 20 grams.
We are in recession now if you use accurate inflation data:
Let's not forget that US inflation numbers are completely fake - so real US GDP is much, much lower:
The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%. So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.
The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively.
What is the Chapwood Index?
"The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."
http://www.zerohedge.com/news/2015-05-29/inaccurate-statistics-and-threa...
We have been in a papered over depression for 7 years, and on the decline for 15, and 30 years before that started, the inflection point was hit leading to that decline. We are the Western Roman Empire in the early 5th Century.
Our panem et circenses are WAAAAAY better though.
Picking golf lineups on draftkings will hold me over until the NFL starts back up... That, and firing out knuckle children to HD porn on my 70 inch smart TV.
Our panem et circenses are only better because of the squeamish nature of today's public. They'd loose their panem if they had to watch a lion eat somebody.
Not if it was the right somebody.
Imagine watching banksters, politicians and presstitues competing to the death to avoid prosecution.
I would chow down on some In N Out burger watching that action.
I take Hitlery over Draghi in a heartbeat. It would be messy.
"They'd loose their panem if they had to watch a lion eat somebody."
I think not. It's all how you plan your demographics.
One night have a stadium full of "Democrats" and toss a Bush or two to the lions. The next evenings entertainment will be solely for the "Republicans". They'll be cheering as Obama and a Clinton or two are tossed into the arena.
Saturday nights will be reserved for about 60% of ZH readers and they'll be foaming at the mouth as they round up some of us Jews and feed us to the lions.
Sunday night will be the night when "Sensitive People" get to help toss in anyone caught wearing any apparel with a Stars and Bars motif.
Et al
If that day ever comes you will have the Likudnik psychopaths to thank.
Just pray that the bible-belt evangelicals don't realize what useful idiots they have been. Not to worry though, they are too busy frothing at the mouth thinking about all dem moozlims dat hates us for ar freedumbs.
We have been in a total dollar profits recession for the last 4 quarters...
We have been in a total dollar profits recession for the last 4 quarters...
The difference this time is that the Fed cannot cut rates to give a boost to profits.
"Ya I heard ya the first time... Winner to the king, 500 dollars."
"Shut up Ike..."
https://youtu.be/GGNdnlCbfMs?t=31s
Hence the desire for cashless + NIRP.
http://www.destinyland.org/Fonzie%20jumping%20over%20the%20shark%20on%20...
"The Chapwood Index for 2014 was 9.7% and official CPI in the land of the free was only 0.8%. So the Nominal GDP of 5.6% for 2014 becomes real GDP of -4.1%.
The revised real GDP for years 2011 to 2013 worked out to -6.2%, -6.5%, -6.5% respectively. "
These inflation percentages happen to correspond quite closely with the actual percentage of FED printing/dilution -aka QE- of the FRN as a currency. These are calendar years: so 2014 is registering less inflation/monetary dilution as QE was tapered in the summer of 2014 and discontinued -with exception of 're-investment' of satisfied MBS returns and Bond coupons.
Debt/money supply increases almost invariably lead to aggregate price increases throughout the economy. The asset bubbles make inflation attractive to levereged yield chasers.
It is also very likely that these 'negative' 'revised GDP numbers' are effectively an inverse reading of the generalized real estate 'price' recovery from the crash lows..
The next stop is NIRP. Mind the gap.
Purple Nirple.
Indeed.
Nothing a big false flag won't cure.
No such thing as a false flag. Sun Tzu was a conspiracy theorist and jet fuel DOES melt steel.
The whores on TV told me so...
Also, send your checks to Israel or burn in hell stupid goyim.
Are there ANY real flags any more??
"Are there ANY real flags any more??"
The Confederate Battle Flag (Stars n' Bars baby!).
How bout dat 6 pointed star?
ROTHSCHILD BABY!
lol
Sure, can get the ISIS flag put on a cake at Walmart still, so that counts, right?
Wait for it. Soon, short-sellers will be labeled as terrorists.
Well they need SOMEBODY for the government 'fun' camps and the special snowflakes have draft deferments......
It's easy for central planning to save the markets -- and difficult for it to save the economy.
CYA....http://goo.gl/xnz21s
Fed Funds Rate and the 1-Year Treasury Yield since 2008 look totally normal, free market-ish, and free of some other external influence......
Yet another factoid that proves everything is awesome.
Hey Tyler when r u going to get it? Charts and fundamentals went the way of alchemy, the markets r what the gov't says they are. Did the Chinese threat of arrest mean nothing to you?
Time for the FED to change their mandate from managing "unemployment and inflation" to "feeding the squid"
Pfffftttt... nothing a few years of NIRP won't fix (and when I say fixed I mean kick the can down the road a few moar years).
I think it's safe to say that the Fed has effectively destroyed the capital markets. This sucker is going down, no matter how much they attempt to manipulate the data.
My concern is that having thrown savers under the bus for the last two decades while debasing our currency, there won't be the necessary capital available after the mother of all corrections takes place. No capital, no prosperity.
We may not be facing Mad Max times ahead, but our short- to medium-term future is looking decidedly bleak. One can only hope that the billions of people who will be adversely affected will place blame where it properly belongs: central banking and central economic planning.
Short of firing squads, some bankers and politicians need to go to the gray bar motel for a very long time.
I thought you said Gay Bar-Hotel.
Totally different experience.
Well, maybe not so different.
The US is Greece on steroids, the only saving grace is that the squid has thus far declined to shit its own bed. That will remain so until the squid can profit from it.
When you arm vermin like ISIS you know checkmate is just around the corner.
Oh no!! This times it's different!! Well in that case I better take this shit seriously.
yawn...what time does Amerkan Idol come on the joob tube?
When does Ben Bernake and Jeh Johnston get arrested? That would be time to buy stocks with a 6 month time lag. Otherwise cash and pm's.