Jim Cramer

It could never happen here, right? Again...

We could not have put it better - Progress indeed...

How many more times will we be told that "it" doesn't matter... or it is "transitory" with regard any and every flashing red warning signal from asset values that are not centrally manipulated with regard asset values that are 'plunge protected'? Well to try and kill one of those myths off, we present the following chart... showing how a collapse in commodity prices is unequivocally bad for US equity markets...

The Conference Board just reported that US Consumer Confidence, having bounced in June, has collapsed in July (and saw the bounce revised drastically lower). At 90.9, this is the lowest since September 2014 and is below the lowest economist estimate. More worrying is the crash in "hope" - as consumer expectations plunge from 92.8 to 79.9 (lowest since Feb 2014). This should not be a surprise since Gallup has been indicating fading confidence in its weekly survey for a while. 57% of Americans believe the US economy is "getting worse," which has left Gallup's Economic Confidence Index tumbling to its lowest in 10 months.

Innovation in technology reduces the need for labor. More individuals are sitting outside the labor force increase the demand for available jobs. Increased competition for available jobs suppresses wage growth. It is a virtual spiral that continues to apply downward pressure on an economy based nearly 70% on consumption. Importantly, what small increases there have been in unit labor costs have primarily come at the expense of higher benefit and healthcare costs rather than an increase in wages. As discussed previoulsy, for roughly 80% of the working labor force, wages have declined over the last five years. Janet Yellen is right that wages will have a hard time increasing without a pick up in productivity. The issue is that innovation IS the problem, not the solution. That is unless we begin to include the productivity of robots.

• In Asia/Pacific, the sales decline was primarily due to lower sales in China and Japan.
• Decreases in Latin America were primarily due to continued weak construction activity
• Sales declined in EAME primarily due to the unfavorable impact of currency, as sales in euros translated into fewer U.S. dollars.
• Sales declined in North America as weakness in oil and gas-related construction was largely offset by stronger activity in residential and nonresidential building construction.

We love reading quotes from Hussman in 2000 and 2007. The air is getting pretty thin up here. A stock market driven by Google, Apple, Netflix and a few other tech darlings with no earnings does not make a market. Time is running out for the bulls. The same morons on CNBC ridiculed and scorned his facts then and they scorn and ridicule him now. Do we trust Jim Cramer and Steve Liesman or John Hussman? Guess.

Rick Santelli recently unleashed his own brand of truthiness on an unsuspecting CNBC audience, that, just like in China, "the central planners are in control" in Japan, Europe, and most of all America. As part of the 3 minutes of lack-of-free-market despair, Santelli drew what we called "the chart of the year." By popular request, it is reproduced below...

If The Fed's dream of wealth creation by equity-levitated mandate is to be fulfilled then it is simply inevitable that QE Moar is on its way...

Presented with nothing but an open-mouthed 'no comment'...

For the average American citizen, this may well become the "scariest" chart...