The A.I. Economy: "Why The Market Never Crashes"

Tyler Durden's picture

Authored by Mac Slavo via SHTFplan.com,

How are they keep this dying patient, the economy, together?

Perhaps we are long past the point of an organic, “real” economy. Instead, autotrading and artificial intelligence appears to be auto-investing into the stock market and other parts of the economy in order to keep it afloat.

Meanwhile, the individual will be increasingly barred from using cash, and forced onto a digital, tracking system.

Matthew McKinley of Texas Shrugged Books explains why he thinks that the system hasn’t crashed yet in spite of overwhelming systemic problems, and plenty of room for crisis.

Basically, everything is rigged, and we are at the mercy of a more organized, data-loving computer.

via Texas Shrugged Books:

I am sick of the talking heads who all swore up and down that 2016 would be the year of collapse, and of course, it didn’t happen. All of these talking heads are so arrogant, they can never admit they were wrong. Saying “I was wrong” allows one to stop running down the wrong path, reassess, and find the right track. In my opinion some form of A.I. and supercomputer is injecting the system with “printed” money so nothing really fails. I am not just talking about banks. I think, at this point, “regular industry” of a certain size is also getting these magic funds. This is almost the only way to explain how nothing has really failed since 2009. This magic show will go on for as long as the rest of the world still covets our fake monopoly money painted green. So, if no group of countries begin using real money or any other way of rejecting the dollar by bartering locally for example, this system will go on that long. It could be another decade I just don’t know at this point, but it cannot go on forever. A system based on lies, manipulation, and fakery can’t go on forever.
So, is a supercomputer running the economy? Is that the big secret as to why things stay afloat – ultimately making the system more and more dominated by technology. Things have been awfully shaky, and as McKinley argues, it only makes sense that a different kind of manipulation is taking place to keep things afloat. As SHTF has previously reported:

Today’s financial ‘ecosystem’ is a set up for unfair advantage to those playing a game controlled by high frequency trading (run by automated computer algorithms) and secret ‘dark pool’ investors, as Ramsay sees it... the market is rigged against retail investors, has questioned the tactics involved in using algorithms to buy and sell shares in fractions of a second. 

Financial trading expert and critic Max Keiser called the entire system a hologram, capable of masking deflation and inflation through the feedback loop of these computer algorithms, programmed behind the scenes to manipulate for human interests:

 

In place of reliable price signals (based on the supply and demand of buying and selling) we have price signals that are generated by computer algorithms; i.e., computers executing program trading, high frequency trading and algorithmic trading — that account for up to 70% of the trading activity on the NYSE (or 100%, if you consider any shares traded — not involved in program trading — can’t buck the pricing monopoly of the computers).

 

Program traders have a virtually infinite line of credit, pay virtually zero commissions, and are backed by banks on Wall St. with strong political connections who are ready to bail out any losing bets these computers make.

 

Plus, the computers are able to do something normal buyers and sellers can’t do. They can pick a price they want a security to trade at and then fill in all the necessary trading volume needed to get the price of the security to that point. In other words, you can program computers to rig markets.

High frequency trading – done in milliseconds by computers working on behalf of quasi-anonymous, dark pool investors – has already outpaced any/all human trading, certainly for the average schmo.

Things are not what they seem; it isn’t your granddaddy’s financial market.

Real money no longer exists, and the rest of us are trapped inside of a system of debt slavery, fake news and bad info, and rule by fake money.

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DontWorry's picture

As long as the Fed prints up free money and gives it to their buddies, things won't change.

stinkhammer's picture

Pin your diapers on, Lebowski. Jackie Treehorn wants to see you. 

DEMIZEN's picture

all I ever wanted was my carpet back.

stinkhammer's picture

They're gonna cut your dick off Larry. 

NoDebt's picture

Ah, fuck it.  Let's go bowling.

 

Escrava Isaura's picture

Bad thinking not related to reality.” — MEFOBILLS

DEMIZEN:  wonder why goverments are stupid and how they get caught in hyperinflation spiral…refuse to share financial power with the middle class or "proletariat "

Are you talking about Trump tax cuts to the rich? Also, how are you going to get inflation if less income is available?

äger: same half-assed Central Planning as the Soviet Union- economy still barely running is that the USpetrodollar is the world's reserve currency 

Isn’t the Petrodollar central planned, because US economy started declining in the 70’s?

DEMIZEN: not even putin wants america to fail.

How do you know that? If the conservative crashes the US economy would the world get a major kick the can for themselves?

 

 

DEMIZEN's picture

1 what tax reform are you talking about? 

 

regarding putin it is my best guess, i didnt talk to putin, but he said it many times.  how do you know putin wants the opposite?

Escrava Isaura's picture

Trump’s tax cuts will bankrupt and demoralize America

Conservative Economists: Think tank finds Trump's tax plan would increase deficit by $10 trillion

http://www.politico.com/story/2015/09/donald-trump-tax-plan-analysis-deficit-214211?cmpid=sf

how do you know putin wants the opposite? 

“Is not how do you get good people to rule, most people who rule are mediocre at best and usually venal. The worse it gets, the more they will retreat into self-delusion.” — Chris Hedges.

 

Condition 1SQ's picture

"Demoralizing" tax cuts.  Lol.  Thanks for the laugh.

The Management's picture

The trading AI and algos will continue to react to one another pushing everything higher.

Problem is they were based on some fundamental principles, like ... The fed prints endless money @ zero.

If any structural changes happen that cannot be absorbed by the platform, the residual effects will be quite entertaining...and possibly random.

Hardcore entropy.

unsafe-space-time's picture

Trump is as much a conservative as you fag ass is. Deficit doesn't matter. US is bankrupt and demoralized. The best he can do is give everyone free money while it has value then end the fed and start minting gold and silver.

Please move back to brazil.

DEMIZEN's picture

you are out of your fucking mind. at least i have a theory, you have  period. 

prime american's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

monk27's picture

Things will most definitely change, as money become worthless... Money becoming worthless is why the "free money" concept stops working after a while.
There is no perpetuum mobile, neither in physics nor in economics. All scientists worth their salt know this elementary truth. Economists don't. Draw your own conclusions... 

Escrava Isaura's picture

I know that many here wants the dollar to become worthless.

I know many here wants the US economy to crash.

It ain’t gonna happen, stupid.

Many other nations will go first.

 

The Merovingian's picture

Let's start with Brazil ... oh wait.

unsafe-space-time's picture

The dollar is worthless. The economy is worthless. And so are you.

DEMIZEN's picture

It is always the same story. You wonder why goverments are stupid and how they get caught in hyperinflation spiral, but is really simple when the elite or the "communist avantgarde" refuse to share financial power with the middle class or "proletariat " print money for themself to the oblivion and float on the top like an old turds until a bad storm flushes them away when they chose the austerity,  the pitchfork crowds clean them up.

 

 

Doña K's picture

<<<<<< You wonder why goverments are stupid >>>>>

Goverments are not stupid. They get cought helping their friends and paymasters to steal from the treasury to a degree that it is now visible and must be supressed and be blamed on something else. 

brushhog's picture

"I am sick of the talking heads who all swore up and down that 2016 would be the year of collapse...."

2016?? You must have just tuned in. They've been saying it every year since 2009! Every year, every quarter. This is it, the year it all finally collapses with charts, graphs, and complex explanations like "super-computers", and "super-cycles". They've been consistantly wrong for a decade. Maybe, just maybe, they dont know what the fuck they are talking about and the predictions of the end-times are a clever marketing scam targeting people who have lost faith after the '08 collapse.

MrNoItAll's picture

A clever, deceitful and determined group of elites are stretching this shit show out for much longer than could ever have been possible based on legitimate and accepted rules of financial process.  If your favorite football team truly sucks, but they have the power to change the rules whenever they want, then of course they can stretch the game out into overtime.  But eventually, that shitty football team will run out of tricks, and that's when they get crushed into the mud with a roaring fucking vengeance that includes all the pent-up anger and malice that their constant cheating deserves.

NoDebt's picture

That's because they know the next crash will be the widowmaker.  They'll do anything to stop it from happening.  All levers have been pushed into the "run until failure" position.  Trying to pull them back down now will only serve to strip the gears out of the transmission that much sooner.

 

Haus-Targaryen's picture

I respectfully disagree.  

I used to follow this thought process.  

I have come to believe that:

1) Our overlords have a plan

2) The will not crash the system until they are ready

It has nothing to do with "This is it".  If they wanted to keep this shitshow going they would have fixed it a few decades ago.  But, no. They stepped on the gas.

They're definitely going to kill it ... but they're going to provide us with a solution the chaos that comes with them firmly in control.

This ends with more dead people than all previous wars mankind has endured combined.  

 

Arnold's picture

This summer of recovery, I am going to have no tan lines.

Rufus Temblor's picture

There was a guy who called himself the Mogambo Guru who was predicitng doomsday, due to money printing, well before 2009.

seataka's picture

What he and I and many others did not grasp, was this is what the NSA and CIA domestic and international spying has been USED to accomplish.

I lost a bundle on common sense, until I accepted that it is all a contrived, choreographed charade, and that I will have no way to know the date of doomsday, and that I should bide my time and investing accordingly..

brushhog's picture

Alot of things WILL happen, eventually.

DEMIZEN's picture

all things will happen, eventually..

 

:)

Haus-Targaryen's picture

If said doomsdays economic analysis was incorrect I'd up vote this.  

Regrettably, most of their economic analysis is spot on.  

Most of them however fail to appreciate that the group of people who writes the rules won't fail by the rules. 

Its something they aren't planning for that will get them.  Rumsfelds "unknown unknowns" 

shovelhead's picture

It will last until you hand someone a dollar and they push it back and ask what else do you have.

That's when they stop adding zeros to the currency. The jig is up.

Virginia Wooolf's picture

Exactly.  ZH too has been guilty of being too bearish. 

MrNoItAll's picture

They can (and do) manipulte stocks all they want.  Bonds, not so much.  There are real consequences to all this manipulation.  Reality can be denied for only so long.

shovelhead's picture

You don't find 100 yr. bonds at 1% attractive?

Guess you just can't please some folks.

evoila's picture

If you're running out of reasons why the market is staying afloat, then I feel pretty good staying in cash

Rufus Temblor's picture

This shit show continues until there's a major default that changes outlooks in a big way. When Chinese mega-companies can no longer pay dollar debts because the Chines government has no more foreign exchange reserves, that would be major. A few euro country's collapsing? No big deal, as long as Uncle Sam is still printing dollars and passing them out to his buddies.

dimwitted economist's picture

Fake News... LOL!!!!!!!

Virginia Wooolf's picture

This is probably the best article I have seen on here in a while.  Maybe the editors at Zerohdege will begin to use a little more caution in trying to create a bearish scenario for the markets and the econom. THis is six years now in a row that they have been trhying this. 

 

LIke many others on here I have been following the guys at Shepwave about two years ago and they have been calling every dip and rally. They called the trump win, the trump rally and even said to buy the inauguration while every other analyst on ZH was screaming to sell.  

 

proof is given by them as well, https://www.facebook.com/166578775325/photos/a.10153488951800326.1073741827.166578775325/10154415124400326/?type=3&theater 

Apeon's picture

Your use of farcebook casts strong doubt on your ability to rationalize.

TaaDaa's picture

I have found their old charts on their blog too at www.shepwave.com/blogs.  I don't know why there are so many people on here who talk about them and use their facebook listing.  Go through their blog and they show a lot of old calls that really do show they make some good calls. I have yet to see anyone on ZH show past calls that have ever worked out so well. I realize that comment will not go over very well but it is the truth. 

zeroedgesd's picture

You can't try to explain anything to the people on here. They are all perma bears and have all lost their money.  Every time someone mentions a legitimate analyst who has been actually making correct market calls like SW all the traders who are now broke chime in. I think it is jealousy and desperation. 

Condition 1SQ's picture

Virginia Woolf

Zeroedgesd

TaaDaa

 

Shepwave shill accounts.  Look at their post histories if you're skeptical.  They have dozens of shill accounts that all post around the same time, all supporting Shepwave.  Stop spamming.

DuneCreature's picture

Kind of OT but, not really,.....sort of....maybe. ... Good one for the weekend though.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I have a question for you high finance whiz kids.

(Full disclosure - I'm dumber than a rick of bricks about Wall Street investing. ...... Begs the question of why I post on ZH, I suppose, but we can visit that issue later.)

Background - My better half (Ms Creature) is working on a degree of some sort in accounting. Last night she came to me and asked a question; What was the biggest accounting scandal on Wall Street in the last 50 years? ....

"By USD amount? .. By negative publicity? .. By who got spanked (jailed, fined, punished) the worst?" ... I asked, and she said, "Take your pick."

"OK", I said and pondered and strained my brain for a minute and answered, "World Com or Enron, maybe?"

So, then I told her I would post the question on ZH for her and she said, "Great, I've got a paper due in a week."

What say ye, my good fellow sharp high finance types?

What was the biggest Wall Street accounting heist in recent history? .. And briefly why? ........ (Keep it short. We don't want to be doing the girl's homework for her. ... Trust me, she knows how to work a crowd for maximum yield.)

Live Hard, Ms Creature Says Thank Anyone On ZH That Throws Her A Bone Or Two, Die Free

~ DC v5.0

adr's picture

Enron would be the best scandal for a paper,  but the greatest scandal would be the change in GAAP to allow the Enron loophole to become quasi legal. 

The end of Mark to Market

The change that moved inventory from a liability to an asset

If I have an open PO for inventory I hold, I am allowed to write that inventory off as sold and borrow against the future booked revenue. 

 

DuneCreature's picture

Interesting. ... Ms Creature has ragged hard on GAAP to me in the past. ... Something about GAAP only being used in the US? .. That sooner or later it will become the worldwide accounting standard and that will be 'the end of life as we know it', I think was the way she put it.

Thanks for your input, adr.

Live Hard, Mark To Market Value Keeps Things Out The O Twilight Zone On Paper I Would Imagine, Die Free

Arnold's picture

Bernie Madoff certainly got a lot of free publicity for his accounting practices.
Many Ponzi schemes qualify.
Union accounting practices.
Pension fund accounting practice.
Auditors paid for the correct audit.

GAAP - Generally Accepted Accounting Practice.
So you can compare apples to apples.

Non GAAP can make the bottom line look much better on a quarterly basis, for the children.

DuneCreature's picture

I just ask Ms Creature at lunch if she had decided on a scandal yet and she said she had only researched just a little bit but so far was leaning toward Waste Management Inc. ...... One I know very little about. .......... I told her I'd wait for her paperback book to publish and learn all about it. (She was ever so 'slightly' amused.)

She said all the principles went to jail along with their accountants. ..... I can't wait to read about it.

Jail time, what a novel idea as a deterrent to theft.

Live Hard, The Fine Needs To Be Bigger Than The Heist Take, I Always Say, Or It's Just A Good Business Model Not A Fine, Die Free

~ DC v5.0

SixIsNinE's picture

agree -  everyone should be aware of the Smartest Guys in the Room  enron doc.  

 

and in addition to GAAP changes,  how about the very basis of fractional reserve banking going to basically unlimited for the biggest banksters.     infinite rehypothecation.      how the fed allowed all changes necessary in circa 2009 to keep the party going.

 

those who listened to Obarky's pitch to not fight the fed and BTFD made out like bandits.  

I was spooked by 2007 and those who listened to me to exit in 2008 may be better off - or they may be pissed as hell they missed the gigantic runup.

 

 

Apeon's picture

I am with Dune, but not as smart.

re: 'Open PO"------WOW!

Sum Things nowe make cents