Why Normalcy Has Not Yet Arrived

Tyler Durden's picture

From Mark Grant author of Out of the Box and onto Wall Street

Sobering Up

“Now I know I'm not normally a praying man, but if you're up there, please save me, Superman!”

                                                                                 -Homer Simpson

We have been mis-lead first by the short term effects of the LTRO and then by the political commentary that everything had returned to normal. Hard data will show that things now are about as normal as 9/15/08, the day Lehman filed for bankruptcy. Let’s start with our old favorite Greece. Aside from their share of the balance sheet of the ECB, now at four trillion dollars, or $57 billion for Greece, the Greek Central Bank now has its own debt which has reached a staggering $262 billion and represents 65% of the nation’s Gross Domestic Product and is up 50% year-over-year. The decline in Greek M-1 hit -16% for 6 months or -32% annualized according to the most recent data while M-3 fell almost -20% or -40% annualized. These numbers, in my opinion, are not just frightening and not just Recessionary but Depressionary and a leading indicator of things to come.

“You can spend an entire year talking to honest politicians in Europe; or you can do it before breakfast on Easter Sunday.”

                                                                                 -The Wizard

The Irish Shenanigans

The government of Ireland owed the Irish Bank Resolution Corporation $4 billion in a promissory note that was due on March 31, 2012. Instead of paying it, as demanded by the contract, they offered up a long term government bond as payment due in 2025 which then allowed the central bank of Ireland to use it as collateral at the ECB and borrow even more money. In other circumstances this would be considered a “Default” and while it took place almost completely under the radar it indicates the tremendous weakness in the Irish finances and the shady deals that are taking place with the ECB. If you think Ireland is improving, think again, as the M-1 money supply number is now down -15.7% for the year. Watch out for Ireland now; they are just printing new government bonds, shuffling funds from one Leprechaun to the next and using it all to borrow more money from the pot of gold at the end of the rainbow known as the European Central Bank.

“We have not the reverent feeling for the rainbow that a savage has, because we know how it is made. We have lost as much as we gained by prying into that matter.”
                                                                              -Mark Twain

Other signs of Danger

It is just not Greece and Ireland that are experiencing huge drop-offs in the M-1 money supply but Portugal -14.00%, -13.80% in Italy and Spain is quickly approaching double digit numbers.  Even in developed countries the signs are worsening as the Henderson Global Investors gauge, the Real Narrow Money Supply, peaked at 5.1% in November, then dropped to 3.6% in January and was 2.1% for February. This is comparable to the declines seen in mid-2008 and so I bring this to your attention. Equally as worrisome is M-2 in the United States which fell below 1.6% last month for the first time since records have been kept in 1959.

“I was in my thirteenth year when I heard a voice from God to help me govern my conduct. And the first time I was very much afraid.”

                                                                                           -Joan of Arc


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LetThemEatRand's picture

"You would think Obama would be suffering with women voters. He has more in common with Islam than with the fundamentals of our Christian heritage. We need to point this out as often as possible."

One of the first posts on your link. Go Red Team!

economics9698's picture

WTF?  Our M-1 is up 14.6% in the last year.

explodinghead's picture

Wake up and smell the coffee. Fuck both teams. Like red or blue matters. Divide and conquer.

Straying from the flock's picture

It is the lie we have been told since birth.  The government will help you if all is not well.  Red, blue, red, blue. They are both the same.  The normalcy bias is what keeps us enslaved.  It is the "This can't happen here" mentality that prevents action in the face of certain danger.  The mathematically enevitable collapse of the dollar will change our paradigm forever, and rest assured, it will collapse.  The writing has been on the wall for a long time.

jeff montanye's picture

to econ 9698:  he said m-2 not m-1, but what i find shows about 5%. down from about 10% late last year, certainly a worrisome trend.  http://ycharts.com/indicators/m2_money_supply_growth/historical_data?sta...

john39's picture

no shit... it baffles me how anyone can fall for the 'obama is a muslim' red herring.  must be because at least twice a year he pretends to scold his master netanyahu.   but actions speak louder than words people, obama is a banker whore and puppet.  bombing muslims is his MO.  wake the up people.

mendigo's picture

What does his religious perspective have to do with this post? Did you read and understand the post?

LetThemEatRand's picture

I made the mistake of following the link of the first poster and that's what I found.  I was sharing the brilliant insight.  Evidently, our problems relate to the fact that Brietbart is dead and Obama is a Muslim.  And here I thought the oligarchs took over both parties.  Who knew?

BobPaulson's picture

Couldn't see the link between the cited blog and this post. Explain?

LetThemEatRand's picture

The blog is quite active. You'll have to read down quite a few posts now to find the quote I copied.   Evidently this is where Limbaugh listeners go when Rush is in recess.

SheepDog-One's picture

So....things are very bad, yet also quite good indeed! Nothing to see here, just need to totaly suspend disbelief another 7 months or so for an election of a dictator....gotta do that no matter what and so forth.

GeneMarchbanks's picture

This now daily diatribe -- usually centering on EU troubles -- I believe has a double purpose: to name drop with quotations and just be vague enough to later pretend like he warned you about something.

SheepDog-One's picture

They'll make the trouble appear again, when they want to.

BobPaulson's picture

Forcasting is a bitch man. You'll note that no academic historians will touch it with a 10 light year long pole. The reason of course is on the 9 times out of 10 you get the behaviour right but the timing wrong you are thereafter branded as a Cassandra constantly spouting eschatological prognostications.

One of the main down sides to being a bear, or taking part in the ZH online community is you go through the frustration of everybody ignoring you before a big event, then another bout of frustration when people line up all over the place afterward saying either they were also believing the same thing or worse, that the big collapse was a black swan that could not possible be predicted by anybody reasonable.

I actually got into this from reading Keith's Housing Panic, and posts there later led me to ZeroHedge. So far I don't give a shit if people didn't predict the last rout to the month, I saved a lot and bought bullion in 2005. Sure I wish I had caught the wave up with the TARP money but you can't win them all.

BidnessMan's picture

"Predictions are hard, especially about the future."

Yogi Berra

Dr. Engali's picture

Nothing a good dose of fiat printing won't fix.

Dr. Engali's picture

Blah blah blah....Greece .. Blah blah blah Europe....
Give me a break. How about this... We are all fucked because Our only "solution" to every problem is more debt.

mess nonster's picture

Deflationary, bitchez.

BobPaulson's picture

The terrible sliding scale that is normalcy... time for a quote:

The Trouble with Normal

Strikes across the frontier and strikes for higher wage
Planet lurches to the right as ideologies engage
Suddenly it's repression, moratorium on rights
What did they think the politics of panic would invite?
Person in the street shrugs -- "Security comes first"
But the trouble with normal is it always gets worse

Callous men in business costume speak computerese
Play pinball with the Third World trying to keep it on its knees
Their single crop starvation plans put sugar in your tea
And the local Third World's kept on reservations you don't see
"It'll all go back to normal if we put our nation first"
But the trouble with normal is it always gets worse

Fashionable fascism dominates the scene
When ends don't meet it's easier to justify the means
Tenants get the dregs and landlords get the cream
As the grinding devolution of the democratic dream
Brings us men in gas masks dancing while the shells burst
The trouble with normal is it always gets worse

adr's picture

Another sign normalcy has not yet arrived:


A company basically admitting they are out of cash and need to sell everything of value to stay afloat, AND THE STOCK SOARS??????

Selling 100 patents for $1 billion dollars and this is supposed to be uber bullish!!!!??????



I bet the algos saw AOL...sold to...Microsoft and ramped the hell out of the stock just like any other buyout.

azzhatter's picture

until somebody steps up and faces the fact the problems are structural not cyclical we will continue to flounder. There is no back to the good old days, they were built on sand. Entitlements including a lot of private pensions have to be reformed and not starting in 10-15 years. That is typical addict type bullshit, one more hit on the crack pipe. Nope, we need cold turkey reset and soon.

youngman's picture

You are right...but the sad truth is that it will never happen...the politicians will never tackle the problems facing this country...never....so plan for trillions more..and faster...and faster..as the sheeple want more and more

daxtonbrown's picture

All I know is that you can't trust the government stats on GDP, inflation, unemployment, and probably a lot of other numbers. I am collecting a Hall Of Shame of unjiggered economic charts. What I am seeing is that we are truly fucked. http://www.futurnamics.com/slfed.php

orangegeek's picture

Every option is being executed to show/fool buyers that the market has more upside.


Dow/SP500 up 17% since December 2011 - watered down numbers appear as year of year.


Nasdaq up 25% since December 2011.



And where's the value?  Apple selling more home user gadgets and online music.

Eric L. Prentis's picture

This economic model, based on long-term trends in the stock market, predicts the US will slip back into recession in April/May 2012.