"Historic Crazy" - Inside The Everything Bubble

Tyler Durden's picture

This won't end well...

Source: Contra Corner blog

As Credit Bubble Bulletin's Doug Noland concludes today after a deep dive in the Flow Of Funds data...

Credit Bubbles survive only so long as ample new Credit is forthcoming.


Asset Bubbles persevere only so long as new “money” flows readily into the asset class and prices continue to inflate. I have argued that the current Bubble is deeply systemic, impacting virtually all asset classes. Undoubtedly, however, the most spectacular Bubble excesses continue to unfold throughout global bonds and fixed-income.


I can appreciate Bill Gross discussing a $10 TN “supernova” that’s going to explode catastrophically “one day”. I can also respect legendary speculator George Soros’ decision to return to active trading with a host of bearish views and bets he expects to pay off one day soon.


Gross and Soros are examining the same world as we are and must be in similar utter disbelief at what has transpired. Things turn notoriously Crazy near the end. We have witnessed Historic Crazy.

And even central bankers are getting anxious (as The FT reports)...

"A small change in central bank interest rates risks triggering an abrupt reversal in global markets, in echoes of the last financial crisis, the head of the German Bundesbank has warned.


In his latest warning on the unwanted side effects of persistently low interest rates, Jens Weidmann said investors and asset managers could become ‘increasingly nervous’ in a world stuck with near negative rates as it raised the possibility ‘of a sudden hike in risk premiums’.


He said monetary policymakers’ attempts to issue forward guidance hinting that rates will stay lower for longer, and lengthy aggressive bond-buying, had ignored consequences for financial stability..."

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DownWithYogaPants's picture

What did the Florida shooters gun sound like?


Poo poo poo poo poo

Jerky Miester's picture

While he was murdering his targets, he was singing the Allahu Akbar Song.

itchy166's picture

A Muslim walks into a gay bar.  Bartender asks, what can I get for you? Muslim says shots for everybody... 



Rage Against Your Face's picture

William Hill has 9/4 odds on Britain to enter a recession by end of 2017. Virtually giving their money away.

WTFUD's picture

Do they mean maintain this current recession up to end of 2017? Those are long odds if you use fundermintels . . you remember fundamentals.

Paul Kersey's picture

Wonder if a vote for Brexit could serve as the lynch pin. A Brexit followed by a Grexit would certainly take down the EU, and if the EU goes down, even the big timber will fall. I love to watch that big timber fall.  Meanwhile, you've gotta love Doug Noland:


"I had no idea that by 2016 the Fed's balance sheet would have inflated to almost $4.5 TN. The thought that the BOJ and ECB would each be expanding their balance sheets by about $1.0 TN annually never came to mind. I did not at the time contemplate that the ETF and hedge fund industries would both balloon to $3.0 TN. I would have argued against the possibility for negative interest-rates and $10.0 TN of negative-yielding global debt securities. I expected a Bubble in China, but a $35 TN Chinese banking system and $8.0 TN of so-called "shadow banking" were inconceivable back in 2009. And clearly I expected this "Granddaddy of all Bubbles" to have succumbed before now."

consider me gone's picture

Relax, it's all gonna be aaaalllright.

Taint Boil's picture

In the most simplest of terms: Water always finds its own level.

Mr. Kwikky's picture

Well at a certain level the water spills over and somebody needs to clean the MESS.

AGuy's picture

In the most simplest of terms: Water always finds its own level.

Especially if it turns Red. Not only is this likely to "End in tears", but with blood on the streets.



Cult of Criminality's picture

Hillary and Soro`s for prison 2016

Makes the FBI look like Andy of Mayberry,Keystone cops,Larry,Mo,Curly

or just plain shit.

Anyone that cannot see that the criminal justice system is just that,is truly missing the point.

The criminal just us system is, justice only for the true criminals.The FBI or others by law and Constitution could march right in and nab these global killers of Humanity at anytime for decades but choose not to.,

Your on your own peeps and they are coming for your girlfriend,wives,daughters,husbands,boy`s

pets,defense items ,asset`s...every fucking thing you got.... including your breath and brains , blood.

And they insist all is well and everything is fine.Everyone is pedalling fiction but the house ,senate,president and vice pres.They are here to help you.Thats just your government

Now imagine infested,infiltrating infidel`s

Trust at your own discretion.

My advice would be to arm up to the teeth.The clock keeps ticking.


Good luck

Zerohedge your awesome...Thanks for your in depth research... lamestream media cannot touch or even compare to your team > of real critical thinking Humans..

Again Thanks ZH




Five Star's picture

At the core of the 'everything bubble' is government debt. In the US alone $9.6 trillion of federal debt comes due in the next 5 years. That means 50% of 2015 tax revenues every year go to nothing more than servicing the debt already accumulated.

Can't be done...



Vageling's picture

Another bubble? Gee, and here I was thinking people smartend up. Shit, give me a unicorn and I ride it up the rainbow, Put on my naughty shoes and go for the pot of gold.

navy62802's picture

#Gold It's the only way to preserve your wealth in such uncertain times.

BurningBetty's picture

I own both gold and silver. Though in a state of emergency, given that gold is trading at ca. 1:65 of silver, silver will become metal of choice for many, due to golds "high" price. Even at this price, gold in real terms is cheap. But many people hardly have savings and will spend whatever they can on silver (if such situation evee occurs).

Hakunamatata's picture

Huge asset bubbles have been spawned by borrowing from future incomes today. As it becomes clear that those incomes will not quite materialise as planned, confidence will wither and crises will precipitate.

Unfortunately it is the basic American lifestyle that causes it. First the individuals were given easy money to spend through credit cards on the assumption of ever expanding incomes till they were inside an inescapable credit trap. Then easy money was given to buy homes on the assumption of ever expanding house prices, till the sub prime crisis precipitated. Then easy money was given to banks and corporation on the assumption of ever expanding business profits. This will probably lead to another crisis as well.

The people are encouraged to consume what they really dont need with borrowed funds. This creates a false picture of demand at the micro level. Reality becomes apparent at some point and the game is over. New game is started somewhere else.

Whereas debt is good for efficent capital allocation, it is very bad when it becomes the driver of consumption or business activity. Ever since the world moved from asset based secure lending to cash flow based lending, all sorts of problems have materialised. And now this culture of needless consumption has been exported even to the historically wiser cultures in Europe and Asia. Till people keep believing that prosperity lies in superfluos consumption, the marketers will take people for a ride and new bubbles will be spawned.

Let us not forget that the basic resources like food, water and minerals still provided free by the earth. Nature survives on pure capitalism which has no room for bail outs and that is what keeps the system in balance. This is known as Karma. Artifical supports through social security and corportate bail outs corrupt the whole system and create moral hazard. Political promises of dole dont help the world.

When the corporations made profits, they shared 30% in taxes. When they goofed up, the public bore the brunt of 100%. Individuals like financial traders who put the system at risk, took home their bonuses. When losses happenned they merely lost their jobs. So where is the risk really?

I think all these problems cannot be solved in a day. But the beginning has to be made by making information about all large transations public. Ignorance is the biggest bane of the world today. The data about the incomes and wealth and their sources of the top 2% populations needs to be public and the data of all people in a locality needs to be public to everyone. Only then will I believe in the charade of "liberty" and "freedom"