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There's No Upside Left
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
The upside is ephemeral, illusory or wishful thinking; the downside is real and lasting.
There's no upside left--not just in the real economy, but in jobs, politics or policy tweaks. Yes, there will be huge relief rallies in the stock market--relief that the Fed is still omnipotent, that the Fed didn't destroy the world by withdrawing liquidity, etc., etc., etc.--but in terms of sales and profits, there's no upside left: an increasingly nervous upper middle class is reining in profligate spending, while everyone below the top 10% is running out of credit cards, student loans, etc. to tap.
Whatever surplus the real economy generated has been skimmed by financiers, lenders and the central state. Stock buybacks have boosted the wealth of corporate managers and institutional owners while creating zero jobs; lenders have feasted on high-interest credit cards, federally backed student loans and subprime auto loans that are immediately spun off to credulous suckers (Widows and Orphans Fund of Norway, et al.) as high-yield securitized debt.
Anyone working for Corporate America or government has little upside but plenty of downside: bonuses are being slashed, divisions closed, sold off or privatized in the case of government, all to cut costs.
State and local pension funds, bloated by seven years of speculative frenzy, are about to start bleeding from every orifice as reality and risk intrude on the central banks' fantasy of never-ending asset bubbles.
Whatever pension and bennies you were promised--start practicing your fractions, because only a fraction of the bloated promises made by politicos desperate to get re-elected can be paid in the real world.
Doing a great job will either get you fired or overworked: no upside there. If you have the courage (or foolish devotion to truth) to be honest, then you'll be fired as a disruptive "non-team-player" who stepped on too many toes in the pursuit of excellence.
Or if you knuckled under and kept the truth to yourself but managed to get the impossible tasks completed despite the incompetence and/or shoddy work ethic of your managers and peers, you'll get promoted to a job that requires twice the responsibility and workload for a 10% raise.
Anyone taking one of the hundreds of thousands of low-paying service-sector jobs has limited upside in pay and benefits; the corporate owners skim whatever upside there is because labor is in surplus except for narrow fields of expertise.
Productivity gains have been skimmed by corporate owners or the managers: Wage Gains: For Your Boss - Yes; For You - Not So Much (Zero Hedge)
It's all downside, Baby.
It would be nice if an elected official could downsize the Empire or the Deep State, but this is wishful thinking. Can anyone force a radical downsizing (i.e. slashing and burning waste and inefficiency, eliminating multiple layers of management, unraveling cartels and monopolies, closing loopholes for patent-troll litigation, etc.) of the weapons acquisition monstrosity, the regulatory monstrosity, the litigation monstrosity, the healthcare/sickcare monstrosity, or the ineffective higher education monstrosity?
The legions living off these inefficient, bloated systems will destroy any real reforms and anyone who dares propose them. The only available process of radical downsizing /rationalization is collapse. That's The Upside of Down (a book I highly recommend).
I don't blame anyone for trying to save their job, division or agency; but the systemic cost of protecting privileges, bureaucracies and cartels is collapse.
But labor isn't the only thing that's in surplus--so is capital. That's why the yield on capital is near-zero or below zero. This has driven money managers to accept extremely dangerous levels of risk to chase yields. That central banks have masked the risk by claiming an omnipotence that cannot exist in the real world has only increased the systemic risks of implosion.
As for the central banks' favored optical distortion device, the stock market--what will drive long-term upside once the market is de-FANGed? Another raft of absurdly overvalued Unicorn stocks?
With risk piling up and yields crashing, there is only downside, Baby.
Meanwhile, the engine of distributed wealth creation, people willing to risk their labor and capital on new enterprises, is cratering:
There's no upside to risking everything when the commercial building owner, bank and local / federal government skim whatever you earn to the point that you're losing money every month.
Oh, wait--there is some upside: the black market/cash economy. Those who sidestep the burdens of regulation, litigation and taxes have plenty of upside. But it's all downside for everyone collecting government paychecks and benefits paid with taxes, because the cash economy generates zero income tax revenue and very little junk fees.
That only increases the burden being loaded on the tax-donkeys who have no choice but to pay higher taxes and the legitimate businesses getting socked with ever-higher junk fees and regulatory costs.
The upside is ephemeral, illusory or wishful thinking; the downside is real and lasting.
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<-----Long safety nets outside manhattan skyscrapers!
I was hoping for no safety nets. Takes the fun out of it.
All the money for the financially-engineered buybacks came from debt AND stolen from R&D...nothing done for the next generation of innovation because it was deemed that the buyers of that innovation would not be there anyway...highway to hell
Why has no one invented the bungie-less bungie jump? Just put a fantastically soft pillow at the bottom, something like Yellens ass.
I think I would rather fall on pavement than Yellen's ass.
"pull it!"
"Reality is NOT optional" - Thomas Sowell
If they hike, what happens to residential real estate in the short-term?
I have a rental in suburban Los Angeles I am fixing up to sell, this spring...
Long safety nets outside Lost in translation's home!
This idiot believes in giving up and just succumbing to gangs, I guess he knows he's fucked living in the 2nd worst place in the world when the dollar collapses. Read it and weep:
http://dont-tread-on.me/?p=3174
100 miles and runnin' .....https://www.youtube.com/watch?v=hdv3HLBNc9Q
Thanks to the welfare safety net and the great society, the bloodshed is going to be biblical.
Thanks for the insult.
I don't believe in "giving in," as you suggest.
But I'm smart enough to know defending a fixed position against 18th Street or Mara is a lost cause. They have very heavy weaponry and the know-how to use. We discovered their membership surrepticiously serving alongside us in Iraq, there to gain experience.
I'm sad to see you resort to name-calling, as I was only expressing an opinion before. I respect you, even if we disagree. In fact, I just quoted something you wrote here on ZH about MyIRA in correspondence with a friend of mine earlier this morning, because I liked it.
Feel free to bash away, though.
I understand....I'm not insulting you - but the fact is there is still a chance to make it. You did insult me when you bashed my IQ level regarding my belief in Jesus. FYI. BTW, it's not quite as low as you think. Also, I'm quite young at 37 and I believe in Jesus.
I think maybe you misunderstood me.
I am not against believing in Jesus. I accepted Him as my Lord and Savior back in July of 1992. I read and believe the King James Bible, even though I don't profess to be an expert on it or understand 100% of it.
I often say I am not religious because I am an Ex-catholic. But I do believe in having a relationship with God, through His only begotten Son.
I was bashing Rawles' followers, and only them. Definitely not you.
Over many years I have seen and heard from a significant number of them who follow him and idolize him as though he were the Messiah. I think he's wrong to accept this following as he does, and I believe much of his advice is faulty and dangerously flawed - especially in the area of eschatology. It troubles me because he's creating potentially serious consequences for people he doesn't know, and can't help when the proverbial check arrives.
Like I said before, I think it was a misunderstanding, but I'm sorry if you felt insulted, and apologize. I meant you no insult or disrespect.
I see, i guess it was a misunderstanding. May God be with you and thanks for explaining. I've never heard of Rawles.
BTW I read that article about the worst places to be when it first came out and I lived near downtown San Deigo at the time, it scared me enough that I moved to another state in hte middle of nowhere.
I live back in the woods, you see
A woman and the kids, and the dogs and me
I got a shotgun rifle and a 4-wheel drive
And a country boy can survive
Country folks can survive
I have a couple rifles too, need a shotgun still, and need to replace the 4 x 4. Grew up working on a farm and worked my way thru college working p/t in a slaughterhouse. Hoping those skills may help somehow.
Trying to get out of the city permanently right now and am already p/t in the mountains in another state, but also try to configure my gear and belongings so I can keep moving if I'm conronted or cornered. Dmitry Orlov instructed me about that, hope I'm not making a mistake.
It has been awhile now but there was a ZHer (I forget his name) who once said, "it's decades too late to change things now. Keep a low profile, keep what you're thinking to yourself, reduce possessions for maximum flexibility, travel light."
I'm trying to follow his advice, the best that I can.
Take care and God bless, Brother.
If the balloon goes up, the gangs will present some problems. No doubt they will excel in home invasions, kidnapping and murder. They exist because they are protected by the state. Out here in the sticks, they won’t have air support and MIC supply chains. Once they get off their turf they will be strangers in a strange land. Lots of hog and deer hunters out here.
i am hedging with short equity possitions.
Thanks for the info!
No upside left?
There's plenty of upside left in the next world!
the economy is doing just fine. just BTFD
I'm thinking we're heading toward a world economic Flanders Fields...
In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.
We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.
Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.
Time to raise rates!
The sun also rises, Hugh. We wouldn't be alive if we all weren't (at least) closet optimists.
Just depends on what your asking me to optimistic about.....
Problem is, sewage also rises.
Cream rises, but turds float......
Jump mother fuckers jump!
Logged in just to up vote you
PLACE YOUR BETS (someone is)
http://www.benzinga.com/media/cnbc/15/12/6051454/dan-nathan-sees-unusual...
DOW 18k today after announcement, whatever it is.
Those who sidestep the burdens of regulation, litigation and taxes have plenty of upside. But it's all downside for everyone collecting government paychecks and benefits paid with taxes, because the cash economy generates zero income tax revenue and very little junk fees.
OMG this idiot actually believes we are still under some kind of tax and spend budgetary system?
HO LEE Phuk I didn't think this level of stupidity still existed.
There's some A-Hole pimping stocks on CNBS because he thinks markets breadth is going to catch up to markets values, and he thinks the FANGS aren't over priced. Some of the stocks he's mentioning are tied into student loans and housing lending.
He keeps bragging about their buyback programs as the corporate bond market implodes and interest rates are on the verge of rising. When anyone with an ounce of sanity questions him, he says I'm in it for the long haul, and the POS is ex Goldman and looks like he's 80+ fucking years old.
Those fuckers will still be lying as they slip on the banana peel in front of the entrance to Hell.
Leon Cooperman and his fund has performed well for quite an impresive stretch...not discounting your hatred for another Goldmanite, just saying, he probably will be fine...his take on oil was pretty spot on in my opinion...but yeah...he probably should at least get a dedicated lampost in the background somewhere, maybe a side alley...save the guilotines and public squares for the likes of Lloyd and Diamond
The guy is an idiot! He's trying to pimp equities that people have no business buying in the current climate. Sure his fund is doing well, he's got a direct line to the clubhouse office.
At this point, I really don't mind Pimps pimping...I mean anyone blindly following these assholes need to get burned and burned bad enough to never ever BTFD...the insanity has gone on so long at this point, seeing the sheep get slaughtered is going to be entertainment vs. disheartening.
I think I must be being drawn into the dark side...really it's fucking time for blood in the streets, this death by a thousand cuts is boring. We need a civil/not so civil reset or else this ponzi sees the dieoff of the remaining few generations that actually still give a shit and see the tyranny for what it is...then its game set match for the "club"....once the millineals start squirting out kids with no priciples or points of reference we are truly fucked...if not already
Don't worry.
Some of the good stuff will grow back once Amurika has been cauterized.
The entertainment value of a global economic implosion is the upside, along with Popcorn sales, and blackmarket contraband, eh. In brief, the entire upside in this crash will be the new Monster house I appropriate when SHTF and the masses rise up to annihilate the status quo of Corporatist thieves, kleptocrats, and organized crime Mafiosi.
Watching these motherfuckers hang from oak tree limbs, and lamp posts, is worth the cost of admission.
must,
keep,
stocks,
up....
Must make sure market goes higher AFTER fed raises rates (if they do).
PPT, use everything you've got and buy buy buy!
They'll print money and raid pensions at the same time in the coming year.
Colonel Sandurz: But sir, your ring! Don't you have the schwartz too?
Dark Helmet: Nah, he got the upside, I got the downside. See there's two sides to every Schwartz.
the maggots got the upside. we got the downside.
TRY 300 points on the DOW for upside, around 2 p.m. EST ... stay long my friends.
No! There's no upside left! Just look at the air pocket that's formed under the futes! Big 'ol hairy double top, and timberrrrrr!!!
This sucker's goin' down today!! At 2:00 eastern, the market is heading straight into the abyss. You heard it here first!
One quibble to the author's otherwise spot-on article.
The cash economy is nowhere to hide now that your local police department can steal whatever money they find under the legal smokescreen of Asset Forfeiture. For our international readers, any time any US law enforcement discovers a largish amount of cash, they can declare it drug sales proceeds, take it, and start spending it. No proof the owner is connected to the drug trade, no hearing to prove any transaction going on. Just the cop's word for it. And the American justice system turns ass-around, making the victim prove he's innocent to get any of it back.
There's really no limit to who can be victimized or how much. All you need is someone with a badge saying 'That's drug money' and it gets thrown into the agency's fun money account. Right now it's unusual rolls of bills, tomorrow it's anything you have in your pockets.
So, going into a cash economy isn't the solution. Instead of getting robbed with a fountain pen, by 'fees' and 'investment losses', we'll just get robbed by the local beat cop.
Wrong AGAIN, doom porners. Look at the bright side, we can always be hit by an astroid, CME, or EMP bomb. Never give up hoping.