"Loss Of Faith" Escalates As Markets Enter Reality "Discovery Phase"
Submitted by Howard Kunstler via Kunstler.com,
It looks like 2016 will be the year that humanfolk learn that the stuff they value was not worth as much as they thought it was. It will be a harrowing process because a great many humans are abandoning ownership of things that are rapidly losing value - e.g. stocks on the Shanghai exchange - and stuffing whatever “money” they can recover into the US dollar, the assets and usufructs of which are also going through a very painful reality value adjustment.
Of course this calls into question foremost exactly what money is, and the answer is: basically a narrative construct. In other words, a story explaining why we behave the way we do around certain things. Some parts of the story have a closer relationship with reality than other parts. The part about the US dollar has a rather weak connection.
When various authorities - the BLS, the Federal Reserve, The New York Times - state that the US economy is “strong,” we can translate that to mean giant companies listed on the stock exchanges are able to put up a Potemkin façade of soundness. For instance, Amazon.com. The company continues to seem like a good idea. And it reinforces that idea in the collective imagination by sending a lot of low-priced goods to your door, (all bought on credit cards), which rings your (nearly) instant gratification bell. This has prompted investors to gobble up Amazon stock.
It’s well-established by now that the “brick-and-mortar” retail operations are majorly sucking wind. Meaning, fewer people are driving to the Target store and venues like it to buy stuff. Supposedly, they are buying stuff at Amazon instead. What interests me in that story is the idea that every single object purchased these days has a UPS journey attached to it. Of course, people also drive to the Target store, though I doubt they leave the place with just one thing.
That dynamic ought to call into question just how people are living in the USA, and the answer to that is: spread out all over the place in a suburban sprawl living arrangement that has poor prospects for being reformed or mitigated. Either you drive yourself to the Target store for a slow-cooker and a few other things, or Amazon has to send the brown truck to each and every house. Either way includes an insane amount of transport, and sooner or later both the brick-and-mortar chain store model and the Amazon home delivery model will fail.
Now I don’t believe that will be the end of retail trade, but it will open the door for a painful transition to whatever the next iteration of retail trade will be. Probably much smaller and more local with less stuff. Unfortunately, it is difficult to imagine a resolution of that without also imagining a transition away from suburbia. The loss of faith in the suburban disposition of things will probably represent the greatest loss of perceived wealth in human history — which is how it should be, since it also happened to be the greatest misallocation of resources in human history. It seemed like a good idea at the time, and now its time has passed.
I suppose the loss of faith in value of all kinds will play out sequentially. It is starting in financial “assets” because so many of these are just faith-based stories, and in this quant-and-algo age it has gotten awfully hard to tell what is good story and what is just a swindle. One wonders, for example, how many well-dressed young people at the bond desks have been able to pawn off sub-prime car loans bundled into giant, tranched bonds with attractive yields to hapless counterparts at the asset allocation desks of the pension funds and insurance companies. My guess is the situation is at least just as bad as it was 2007.
The problem is that when this sucker goes down, to paraphrase the immortal words of George W. Bush, you have to wonder how much other stuff of everyday life for everyday people it will take down with it. The discovery phase of our predicament began ever so crisply in the very first business week of the new year. I’m going to hazard to predict that the damage halts briefly in mid-winter and then resumes with a vengeance in March. This may give thoughtful people a chance to rest and assess.
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Reality. Like the 150 point ramp in the Dow over the past half hour or so?
Reality.
Edit: Make that 175 points. Straight up. Now tell me, do you really want to love me forever?
It is sickening.
Was there another audit the Fed bill being considered that was ash canned?
"Unfortunately, it is difficult to imagine a resolution of that without also imagining a transition away from suburbia. The loss of faith in the suburban disposition of things will probably represent the greatest loss of perceived wealth in human history — which is how it should be, since it also happened to be the greatest misallocation of resources in human history. It seemed like a good idea at the time, and now its time has passed."
LOL Whut?
Suburbia doesn't exist because Shopping Malls exist you dolt. Suburbia existed because jobs existed. The malls were invented to make sure that stay-at-home-moms didn't have to drive 50 miles to go shopping with their husbands income.
Suburbia will die when the last working-class job in America is gone.
Shit, even before Amazon, there was the Sears and Roebuck catalogs. American's are no stranger to having items delivered to their door. We practically invented that shit in the 1800s
The general probably wasn't discussing price discovery, but here's a quote anyway:
"A good plan, violently executed now, is better than a perfect plan next week."
- George Patton
Nah, this guy wants everyone living in a city and walking to the butcher, the baker and the candle-stick maker. No cars, no sprawl, just his idea of utopia.
There are a lot of people who seem to systemically and irrationally hate suburbia. City dwellers without yards, trees, grass, a bit of quiet, ...?
No, he lives rural. Been talking smaller self suficient communities for years. He dislikes cities.
PPT started slightly early today...
"It is sickening"
What part? the ramp up in stocks, or man love reference made by mark?
Not that there is anything wrong with that!
https://www.youtube.com/watch?v=Oj3VphK9AMk
Let them have one last hurrah. They're still dead.
3:15 EST someone just bitch slapped the VIX down .....algos obliged. Wonder who did that? LOL
I was reading another post a day or two ago and someone mentioned the "3;15pm" ramp. I have noticed many late day buy-ups, as well and I am not a trader.
So, today I look at the DOW and at 3:17pm it looks like someone put a bottle rocket up the rear end of the market...again! So, what the hell is this? Who is doing this buying so consistently? Is it a result of large fund algorythyms all kicking in on the same signals and timing?
If you are an individual trader rather than a bot can you game that? Seems worthy of a try, at least until someone reprograms the HFT-bot trades.
Reality like some digital digits flowing from one account to another the past half hour or so ?
Reality.
Edit: Make that 175 points. Straight up. Now tell me, do you really want to fuck me forever?
Parralel universe with a little twist
Chinese tomato soup !
Discover value
What do you got, at the end of the day
A bottle of whiskey, some digits an a new set of lies
O shit an incomming missle I hear it comming in i better get the hell ou............................................
as long as the Canadian Dollar falls faster than our market...I am fine. 70 cents and falling...isn't quasi socialism based on commodities and the french langauge just great! I think it is because their food is terrible!
dog shit wrapped in cat shit, dipped in chocolate.
who were we wearing last night at the globes? really? CNBC really? Idiots, why not talk about how oil is down 6% in one day? Fuck
Filled up on the way to Atlanta this AM in SC for $1.61 Gal. Reckon it will be under $1.50 by the time I drive back Friday?
LOOK AT GOLD GO!!! oh wait that the stock market LMFAO!...buy now or be priced out forever.
Midtown Manhattan is clearing out ... shredders buzzing everywhere.
http://www.bloomberg.com/news/articles/2016-01-11/midtown-manhattan-office-vacancies-to-rise-as-large-spaces-empty *
.* most since Lehman
<----Loss of faith in the markets
<----Loss of faith in America
<---- Both
This guy has an obsession with suburbia. He would no doubt prefer to shoehorn all 300M of us into cities to better align with his "plans." Hey Mr. Kuntsler: go fuck yourself.
Wasn't there a scene in Aliens where Hudson yells out, "elevator to Hell: goin' down!" just before the shuttle begins its descent?
I'm looking for it on the webz but can't find it...
...I need a motion sickness bag.
If you are standing next to Alan Greenspan, Larry Summers Samuelson, or Robert Rubin, you can start barfing at will all over their suits.
"My guess is the situation is at least just as bad as it was 2007."
no, houses have 50-100+ useful lives & tend to appreciate over their life before falling rapidly at end.
cars have 12-15 yr useful lives (w/the laster characterized by escalating maintenance/repair costs) & severely hyper-linear depreciation so this bubble pop should be a lot more fun!
bonus round: what do you think the recovery value of all those advanced degrees in literary deconstruction of gender fluidity will be when that unreserved, non-dischargable "money good" debt has to be written off when generation barista starts dying off?
jakesdadjake
Thank you for imploding the entire World economies, Jesus Christ & God.
Much appreciated.
I hope this sucker goes down...till it is raining bankers....with or without nail guns!
wtf are "usufructs"?
Good question. It's Latin: usus + fructus = use the fruit of something.
When a man dies, his children inherit his house, but his widow may go on living there till she dies also.
For so long, she has the usufruct of the house that is nog longer her private property, but she may enjoy the use of it.
Stuff from everyday life. Right. Here's one: http://www.dietdoctor.com/new-member?utm_source=Diet+Doctor+Newsletter&utm_campaign=a96749450d-Welcome_to_Diet_Doctor_Emails1_6_2016&utm_medium=email&utm_term=0_41db911777-a96749450d-463280389#presentations
Worked for me 6+ years in!
When GWB said those immortal words it was not inferred that the solution of his neo-con clique would be to CON the world upto the hilt and protect the scions of neo-con Oligarchy 5 times moar than when the crisis occurred...
The inequality divide has spiked in first world and the others are now in a vice where their lands, their RM, are up for grabs and their populations are just cannon fodder.
Some awesome fallout from "this sucker goes down".
He came in with the fall of the Twin towers as legacy from past Oil based cum MIC played Hubris.
He went out with the fall of US capitalism because of WS's unbridled hubris coupled to that of his own political clan; which controls all levers of power in the matrix.
Suburbia has an advantage. No big city politics.
The advantages of cities is lost to politics. Detroit.