Guest Post: When Things Fall Apart: Disorientation, Desperation, Chaos

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

When Things Fall Apart: Disorientation, Desperation, Chaos 

The global "shadow" banking system is unraveling, with dire consequences for financial assets and failed policies.

We're not used to things falling apart, and so our first reaction is disorientation. What we've been trained to expect by constant intervention in  supposedly "open" markets is that Central States and central banks will "save the day" with a new intervention: an interest rate cut, a new round of money-printing, emergency loans, new bailout funds, the list has been almost endless since the initial evidence of the Great Unraveling appeared in 2007.

So when official interventions are announced to great fanfare and then fail to goose the market, we're disoriented. John Hussman neatly summarized the insanity of a market propped up only by constant official manipulation: We represent the Lollipop Guild:

Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums.


What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth. By preventing the natural discipline of the markets to impose losses on poor stewards of capital, and to impose interest rates high enough to force debtors to allocate the capital usefully, the world's policy makers are increasingly wrecking the prospects for long-term economic growth.

The problem with depending on intervention "sugar" for sustenance is that the market slowly loses its sensitivity to the mechanisms of control (insulin), and at some point the sugar no longer generates a response. We are very close to that point now, as the expected "grand EU treaty agreement" is duly issued as expected and global markets are holding their breath, hoping that some new intervention will keep the teetering financial system from falling over the edge.

This is desperation. In market after market, participants don't really have any faith in the future resilience of the fundamentals which supposedly underpin global markets; rather, they are desperately hoping the next intervention will work better than the last one. But like insulin insensitivity, the market is on a one-way slide: every intervention works its magic for a shorter period of time, and markets respond with increasing torpor to the "fix."

The next phase is chaos, as participants finally grasp that interventions will no longer save them. Then the mad rush to the exits (selling) will begin, and many will be trampled, as the bid will disappear across entire spectra of assets.

We should recall that nothing fundamental has changed since 2007. Here are two fundamentals of many which haven't changed at all: wealth is still concentrated:



and the global financial system is still overleveraged and over-indebted, meaning that every decline in asset valuation triggers a "reverse wealth effect."



As I type, the morning injection of hopium crack into the market's veins is already wearing off. We are still in the desperation stage, as central bank manipulators and Central State apparatchiks are rushing around in a panicky search for some new supply of "sugar" intervention to prop up what has been unsustainable since 2007.

The manipulations have one ironic accomplishment: the resulting crash will be larger and more chaotic than the one in 2008 because the faith that State/central bank interventions are limitless magic will have been irrevocably lost.

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Irish66's picture

crack house on no volume and we dance at 1255 for the 10th time


trav7777's picture

CHS:  "What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth"

There IS NO future growth, you dipshit.  That's the fking problem.  Oil production plateaud and the world has been in no-growth for a few years.  The US considerably longer.

tmosley's picture


Use of Weapons's picture

Yeah, you're kinda stupid.

And yes, we did, as a species, hit "peak whale oil": because there were hardly any left. Look up the numbers - current species counts are about 5-15% of the totals of the 1850's. Oil basically removed the profit margin from harvesting a species hunted to extinction.


So, you fucking moron, shut the fuck up.



Oh, and so long and thanks for all the fish.

LFMayor's picture

good thing Captain Kirk saved them, huh?!!!!

NotApplicable's picture

Do you realize you said the same thing as CHS, yet called him a dipshit for it? (oil is a form of capital)

The more you know...

DaveyJones's picture

oil is unlike any capital. It is the most condensed form of energy the earth has ever created and proabably ever will and it took millions of years to do it. We've used half of it in a hundred. Economic growth doesn't happen without energy and the rate and quality of that growth are inseparable from the rate and quality and cost of that energy. There is nothing that comes close to replacing this substance and the exponential growth of our population and economies are coming in direct and violent conflict with oil's decline. You were born into one of the most dramatic and possibly tragic transition periods in human history and your political leaders have betrayed you by lying, delaying, and increasing every effect this transition will have.             

JamesBond's picture

NA -

Your not the only one to recognize it, believe me........

MoneyScraper's picture

No/de-growth background if interested...

The Broken Machine --

Yoko Kato (Mainichi) on the end of "exploitation capitalism" (1600-2000) --

My only problem with any less extractive/exploitative system is the statism invariably needed to implment.  Too-big-has-failed is true of govt not just banks.  If "democracy" has redounded to $15,100,000,000,000 worth of obese diabetic Baby Boomers awaiting entitlement checks, I shudder at what "real socialism" would produce...

VyseLegendaire's picture

Thanks for killing the mood this Friday night Trav-san. 

grekko's picture

You got to be kidding me.  There is an ocean of unexploited oil in Alaska.  The Fed just won't let them drill there.  By the time they do allow drilling, it will be too late to save the economy.  It takes years to bring on new supply even when you already know where it is.  If the PTB wanted growth, we'd have growth.  What we are seeing is "Directed History" at its best. It doesn't have to be this way.  Wake up sheeple!

SheepHerder's picture

Ullitmately you look for a way to dispose of humans to equal out the balance sheet.  This read should set some things straight on what will ultimately happen:  Silent Weapon

Reptil's picture

I'd hate to disappoint you, but it's even worse:
Watch this, then ponder on the implications, then say "zombie apocalypse" out loud, so you can get used to how it sounds.
Not fucking kidding.

Our fate rests in the hands of psychopatic lunatics.
Have a great weekend! (I know I will)

Manthong's picture

“Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house”

That would be a great improvement from the less than inglorious meth lab that it is now.  

SheepHerder's picture

It'd be much easier and save on resources to just release a plague rather than a bunch of "zombies."  Zombies destroy property and waste natural resources (ie lead bullets) trying to kill one another.  Just infect everyone with a plague and let them die.  The cost is disposing of the bodies.  We're essentially talking about the same action though.  Scroll down to logistics in the document above and read from there to get a logical explanation of why the top tier of our monetary system would need to dispose of the masses.  

Reptil's picture

Human remains (however toxic) will provide useful energy when burned. I have a link somewhere about a serious proposition in the UK. I'll post it when I've found it.

Quite! Of course depopulation is THEIR plan. Voluntairy or involuntairy. Funny how this doesn't match with demographics that call for more (newborn) to join the ponzi scheme: I.o.w. our economies in THEIR plans are destined for the scrapheap. Anyone that doesn't see this purpose now (with which I do NOT agree or consent), did not pay attention. The scale is mind boggleling, and IMO there's the real chance these depopulation scemes go too far and result in an extinction event.

As for releasing a simple plague, that's too easy. The germans found out EHEC of last spring was a deliberate attack.
- the origin of this pathogen was in packaging of food, not the food itself

- it was released on multiple places at once. (a naturally occurring pathogen would have a single point of origin)

- the EHEC strain had a DNA structure that consisted of multiple agressive e-coli strains, with some BLACK PLAGUE DNA mixed in.

See here page twelve top left article, second column, middle: Article title: "Bundesregierung: Ehec breitet sich weiter aus."

So, you might be right, and there's a plague (or multiple versions) in storage, but IMO it would be slower, but more effective to mess up people's emotional responses, and what distingishes them from animals; the higher consciousness, and associated cognitive functions of course. Mindless automatons are easy to control, and psychopaths without any ethical consideration would turn on each other and do the dirty work themselves. Culture (religion) has proven itself to be a formidable hurdle on the path to a NWO.
Possible snag is of course that any flu virus (on which the VMAT-2 inhibitor is supposedly "bolted on") mutates very quickly and will be out of control within months. It could turn harmless, or very nasty indeed. I'm not a biochemist, it would be interesting to see some peer reviewed research, though that will never happen, of course.

IEVI's picture

Thank you for posting that link..I'm stunned. I know TPTB are sociopaths, but I guess I didn't fully grasp what a sociopath is until I saw that.

Global Hunter's picture

Great link thanks I've passed it on.

IEVI's picture

Maybe it is just my cognitive disonance acting up, but it seems that video may be a hoax.

buyingsterling's picture

they'll use their race-specific bio weapons first. If they target the god gene, they may find that adulation of the state also withers.

Use of Weapons's picture


You might want to use actual science next time (which is far more scary):


(for the mouth breathers: shows how a tiny microwave to the brain, just under your right ear, removes belief from ethical choices. Hmm... not sure why that'd be important, let me check my Iphone)



Disclosure: having been deliberately infected by a version of the newest 'religion disease', against my will (hello Steven - how's DC? and Israel? Fuck you btw, hope you're still amused, although not sure how you spent the $15k ;) Too bad I'm a philosopher, eh?1 Or did you believe that whole "learnt response" shit, while I was forming antibodies? That was stupid of L.) I was able to deconstruct it within 2 weeks of initial infection. Pros: Damn, I know why Fundamentalists don't use critical thinking, the Religious perception layer is wicked good memetically / pleasure reward to signs / pattern recognition. Cons: Might as well be tripping on acid, same reality <-> truth variables.



  • 1. You officially owe me 2 weeks of paid holiday for that little mickey-finn. Not cool, although it was an interesting ride. As I said, I prefer Go to Chess...
blunderdog's picture

a tiny microwave to the brain, just under your right ear, removes belief from ethical choices

That's sky-high overstatement of the findings in the experiment.  It appears you intend to deceive the reader.

Use of Weapons's picture

No, actually it isn't.

You're doing a double-perception-blind fallacy here.

A 'tiny' microwave to the brain (and 'tiny' here means: not damaging), just under your right ear, DOES impact beliefs on ethical choices. That's the entire point of the peer reviewed science you might have just read. Quite clearly, magnetic waves to certain parts of the brain DO effect behaviour, both ethical and behavioural. This isn't so amazing, given we've been putting electrodes on chimp brains since 1897.

Durrrr... Science: Brain works electrically and other ways. We induce electrical / wave forces: it reacts. Not exactly amazing there. Shit, we pump it full of drugs (prozac, acid, alcholol you name it) it we can also alter the chemical reactions as well.




(and you'd be scared at the real hard core stuff that you can do to a brain if you have access, via drugs or electromagnetic waves. Try some stuff from the MRI scans of Coke / Pepsi trials, and how they taste exactly the same, and how branding is wiring your mind. Fuck me, you're a novice in this field)


You're assuming that I'm referencing things such as mobile phones, which hold an even tinier current. I wasn't. But the stupids might have imagined that was the inference. And thus, you took the bait.




blunderdog's picture

Now that's you've reined in your assertion, sure.  But I responded when you said this: a tiny microwave to the brain, just under your right ear, removes belief from ethical choices

That's a lie.  That's not what the experiment found.  The experiment found that beaming microwaves at subject's brains caused a slight (statistically significant) attenuation of the importance of personal beliefs when making moral decisions.

It doesn't "remove" it. 

The fact that you get all huffy when someone calls out your claim doesn't speak so well for your honesty on this point.

I read the paper months ago when you first posted the link.  You've dragged out a misinterpretation of the results of other scientific papers you've rehashed here, too.  (I recall some lovely bullshit you pushed about video games programming people into some kind of transhumans.  Whatevs.) 

You're a pretty blatant propagandist.  Which is too bad, because you obviously know some stuff and have an interesting perspective.

Dugald's picture

Now then Moriarty, just pop on these headphones, we want you to listen to some nice music, at the end you will be a very different person, and we shall welcome you to the new world.

Use of Weapons's picture

I'll give you a +1.

It is rare that people have read the sources, so I tend to knee-jerk into a shock n awe to get them to read it themselves properly. But please... reference it to the post I was responding to, which is some fake power-point mock-up shot in any university in the universe to make money for Alex Jones & co. The bar was fairly low.


Here's a freebie; keep an eye on this site: It might become socially significant if it gets traction in the next 6 months.

Here's another one getting my attention: Ending the Depression Through Planned Obsolescence




Tunga's picture

So. Footnotes. We've come to this? Where does it end? 

Tunga has been hearing radio waves in his head since he was 3. Does he complain about it?


BigJim's picture

"... and turn a fanatic into a normal person, and we think that would have a dramatic effect on the middle east"

LOL, yes, most Israeli West Bank settlers will suddenly wonder what the fuck they're doing with their lives and go back to New York.

onthesquare's picture

The aligory used by the author leaves me to believe this design was done by a machine and not a human.  Perhaps the machines do not become self-aware over night but may take decades of the transition of man into a machine thinking sociopath.  Rothchilde must have been a sick fuck.

RobotTrader's picture

There were 3 tip-offs to today's rally:


1) Closing TRIN of 5.1 yesterday$TRIN&p=D&yr=0&mn=6&dy=0&id=p57770263082

2) IBD Top 50 never really sold off during the end of day bloodbath yesterday

3) Everybody and their dog was betting on Europe failing if a deal wasn't reached.  And the number of Euro shorts and Dollar longs is monstrous.

Irish66's picture

its funny you only appear on up days

Piranhanoia's picture

see; "crack house" and "meth lab" above.

bigdumbnugly's picture

3)  nope.  not my dog.   he don't know europe from shinola.   he was only betting that it might be the day the sun shined on his ass,  same as he does every day.  someday he's going to be right.

smlbizman's picture

based on that the bernanke a moop?

Everyman's picture

True, Robo, however, there is no EU "Deal".  IT willnot be ratified by all, so part of the EU is going away.  It is starting to crumble with the "arrangement" which is not a deal.  So the indications that the markets went up because a "deal" has been reached is wrong, and therefore like all the other rumors that were all false concerning "saving the EU" about 29 times to my count, has always ended up "being a crises again".

So the cycles are narrowing quite a bit, and soon nobody is going to believe these EU liars anymore.  I don't, and this market is insane and anyone that trades in it deserves to lose all their money.

onthesquare's picture

Right on.  The EU was either a lapse in mass intelligence or a conspiracy.  When is a German not a German?

When they are a Greek.  They, or any other nation in the world, do not have the same environment, society, culture, needs and wants, etc.  So who thought you could put these european nations all in the blender, hid the homogenise button and pour out a tasty treat with an infinite shelf life.

Game over.

willien1derland's picture

Happy Friday Robo, Risk Asset Markets most certainly drove higher, however, I believe it had more to do with the 'decisions' presented earlier today by the Drakozel - Excerpt from a referenced Associated Press article earlier today - URL to full article below - Basically the Drakozel is promising no investment risk - Full Backstop (unless you are the average EU citizen taxpayer then you are screwed).

The eurozone scaled back the rules to force banks and other private investors to take losses when a country gets a bailout from the ESM. The previous push to inflict losses on bondholders has been blamed for exacerbating the crisis

Duuude's picture







England protected "The City"...which is the Bankers Keep



onthesquare's picture

England has gone mid-evil.

Iwanttoknow's picture

Where are you from?Langley?NSA HQ?Quentico?Corporate HQ?What is your computing power?Are you bigger than HAL?

topcallingtroll's picture

Then what is taking so long? Bring it already!

Closed out my short. I cant play this rumor market anymore.

Ready to move to my land in the american redoubt. This pot smoking agnostic swinger sees more kinship in the tea party than with socialists, I mean Democrats.

HarryM's picture

In the event of a financial meltdown, are there any countries that stand to improve their rank in the world pecking order?

sabra1's picture

well, up here in canada, real estate only goes up, and, we've got beavers on our nickels!

topcallingtroll's picture

Canada has a lot going for it.
In spite of their socialism which has worked better than most.
Of course being a commodity country with a small population hasnt huet right now.

falak pema's picture

top : soon you'll be joining the socialist train.

Tegrat's picture

Canada's primary benefit is riding the coattails of our defense system without having the corresponding expendetures...


mayhem_korner's picture




You forgot curling and the fact that folks skate to work in Toronto in the winter, eh.  :D

DosZap's picture


real estate only goes up


Yes, and CACA dies not stinky Poo in Canuckia......................

Your turn is coming,you are an INCH away from meltdown.So, get ready if your not.

On this one, Shit Rolls UPHILL also.