Tuesday, August 6, 2024

"Wars And Rumors Of War, 8/6/24"

Full screen recommended.
Scott Ritter, 8/6/24
"Russia's Gloves Are Off as NATO Makes 
Fatal Mistake, Ukraine in Trouble"
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Full screen recommended.
Richard Medhurst, 8/6/24
"Russia’s Shoigu Arrives in Iran With Weapons,
 US Sends Israel Aircraft Carrier & More"
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Full screen recommended.
"‘I Cry Quietly’: 
A Soldier Describes the Toll of Russia’s War"
"For Valentyn, a Ukrainian soldier in the Donetsk region, the war’s death toll is more than a statistic. He is tasked with moving wounded troops - and dead bodies - away from the front lines, often under Russian fire."

"Under Russian Fire, 
A Ukrainian Soldier Evacuates the Wounded"
By Yousur Al-Hlou and Masha Froliak

Near Kremmina, Ukraine - "The sound of artillery launching and landing along the front line punctures the stillness of the forest just a few miles away, where combat medics are waiting to receive the wounded. On the horizon, a military vehicle moves along a dusty road and screeches to a halt when it reaches the trees. A soldier named Valentyn parks it there for natural camouflage from Russian drones scouting for Ukrainian military positions.

A group of soldiers, visibly shaken, quickly unloads three bodies that have just been recovered from the front line, placing each one into a plastic body bag and zipping it closed. Their position was shelled and then attacked by a drone, they say. “They’re shooting at you from all sides. You turn, you run, they hit you, and it’s impossible to get away,” said Maksym, who survived the attack. “This is a big tragedy for us.” “One more body is left behind with the Russian soldiers,” he added.

While much of the world’s attention has fixated on the bloody urban battle taking place in Bakhmut, Russia’s campaign in eastern Ukraine is also raging in forests and fields about 50 miles north of the city, near Kreminna. Here, soldiers take positions in trenches surrounded by tall, slim trees, crouching to avoid the direct line of sight of their Russian enemies. “People say it’s harsh in Bakhmut,” said Valentyn, who joined the army seven months ago. “But it’s harsh here, too.”

For the past month, Valentyn has been stationed at this evacuation point, traveling back and forth to the front line almost daily to rescue wounded soldiers and recover the dead. His job requires him to drive directly toward Russian forces, and he has come under fire at times. “There is nothing good about it,” Valentyn said. “What is this war for?”

Ukrainian and Russian military officials have been reluctant to release data on casualties within their ranks, though the U.S. government and military experts estimate that both sides have suffered significant losses in the tens or hundreds of thousands.

For Valentyn, the work of responding to the casualties has been both grim and relentless. “There is blood everywhere,” he said, while cleaning it from his vehicle. “It has a smell. Especially fresh blood.” Bright red liquid trickled through his fingers as he rinsed out a bloodied cloth. He drained the cloth and used it again to wipe off the back seat. “It’s difficult to see young boys die,” Valentyn said. “Sometimes I cry quietly.”

In calmer moments when there is no one to evacuate, Valentyn travels deep into the forest to transport soldiers to and from the contact line, where Ukrainian and Russian soldiers are sometimes positioned just hundreds of meters apart. He said at least one group of soldiers couldn’t make it to their position because Russian troops had already taken it over.

“Every day is scary here,” said Viktor, a soldier who returned with Valentyn. “I feel constant anxiety, for our country and our lives.” His stoic face reflected the fear and horror known only to those who had witnessed the fight in the forest. “Those who haven’t been there will never understand.”

Over 600,000 dead Ukrainian soldiers, 80,000 dead Russians...

Adventures With Danno, "I Don't Even Know How To Discuss This! It's About To Get Ugly!"

Adventures With Danno, PM 8/6/24
"I Don't Even Know How To Discuss This! 
It's About To Get Ugly!"
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The Daily "Near You?"

New Britain, Connecticut, USA. Thanks for stopping by!

Bill Bonner and Tom Dyson, "Honest Prices"

"Honest Prices"
Stock prices are primarily information. They tell investors where their capital can be most fruitfully employed. The important thing is not that prices be high or low, but that they be honest.
by Bill Bonner and Tom Dyson

Poitou, France - "The first bomb went off last week. Then, yesterday, came the big ka-boom. Al Jazeera: "Japanese stocks have recorded their biggest losses since October 1987, spurred by concerns the United States’ economy may be in weaker health than previously thought. The Nikkei share average was down 10% or 3,595 points to 32,314 in the early afternoon, its lowest in months." Those poor long-suffering Japanese investors. After the crash in 1990, they waited for an entire generation to get their money back. And then, after enjoying it for only a few months... boom... another blow-up. But wait... could something like that happen in the US?

Nah... no chance... right? Markets Insider: "Dow plunges more than 1,000 points as global stock rout deepens on recession. US stocks crashed on Monday, with the Nasdaq shedding nearly 6% as the global market rout that kicked off late last week accelerated. Since Thursday, the S&P 500 is down about 7% while the Nasdaq 100 is down 9%. The losses accelerated on Monday after Japan's stock market experienced its worst decline since the Black Monday crash in 1987, falling 12%."

After the explosions, the financial press went to the scene. As if investigating a terrorist attack, the newshounds sniffed around for whom to blame. They followed up on leads. They talked to witnesses. But they misunderstood almost everything.

In the first place, they acted as if lower prices were worse than higher ones. They imagined hopeless investors leaping out of windows or putting guns to their heads. But most people are not long stocks... they are short. That is, most people don’t own them. And the less of the world’s wealth is controlled by stock market gamblers, the better off (relatively) most people are.

Besides, stock prices are primarily information... they tell investors where their capital can be most fruitfully employed. The important thing is not that prices be high or low... but that they be honest. Central banks, however, have suborned the world’s capital markets... making them lie about how much they are really worth. As a result, trillions of dollars were misallocated.

In the tech sector alone, the Magnificent Seven more than doubled in the last year. Nvidia rose to more than $3 trillion dollars - more than any company the world has ever seen. Its CEO, Jensen Huang, became a celebrity. At conferences, women unbuttoned their shirts so he could autograph their bras.

And now, Mr. Market seems to be ready to teach them all a lesson. Looking for a culprit, the financial press pointed at the Bank of Japan which had raised interest rates last week. This was a ‘policy error,’ said the analysts. It was not. It was just a desperate move to protect the yen... after decades of ‘policy errors’ in the other direction. Lending far too much money, at rates that were far too low... for far too long... leaves Japan with far too much debt.

Analysts are also blaming the Fed. It should have announced a rate cut last week, they say. And now, they’re already suggesting another ‘policy error’ - an emergency rate cut. So, let’s pause... and get our bearings.

Primary Trend Reversal: The Fed left its key lending rate below zero for more than ten years. This ‘policy error’ had caused all kinds of mischief... most prominently, it led to extremely high asset prices and a mountain of debt. Then, the Primary Trend reversed course, in two moves, one in July 2020, the other in January 2022. After four decades, both stock and bond markets turned around. Bonds sold off. Stocks sold off too... then dilly dallied around... with nominal prices rising, but no increase in real, inflation-adjusted, values.

In 2022, the Fed was forced to raise rates to fight the inflation caused by cheap credit and stimmy checks. But higher rates are a death sentence to an over-stretched debtor. Our guess, back in 2022, was that the Fed would stick with its inflation fighting ‘until something breaks.’ Then, in a panic, it would cut rates again. Has something broken? We don’t know yet. But when it does, the Fed will have only two choices: inflate or die.

Either it returns to inflating the economy with more under-priced credit money. Or, it allows the bubble economy to die. Either way, we will stay in Maximum Safety Mode until we can buy quality companies at fair prices. More to come..."

Market Note, by Tom Dyson: "The world asset markets have become ludicrously unbalanced... with almost all the value growth of the past decades accruing to US-based, dollar-based assets. The chart below from Goldman Sachs shows this dynamic at work in the global equity market.

What we are seeing here is the work of a self-reinforcing cycle - also known as 'reflexivity' - where rising US asset prices attracted the world's savings which drove US asset prices higher, which attracted more of the world's savings and on and on.

My overarching proposition is, this cycle has gone as far as it can go and is now unwinding, generating reflexivity in the opposite direction and will ultimately result in a great deflation of asset values. The market action of the past few days is a small sample of what's to come..."
Click image for larger size.
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8/6/24: "'Dead Cat Bounce', As Expected."
In finance, a dead cat bounce is a small, brief recovery in the price of a declining stock. Derived from the idea that "even a dead cat will bounce if it falls from a great height", the phrase is also popularly applied to any case where a subject experiences a brief resurgence during or following a severe decline. This may also be known as a "sucker rally".

Gregory Mannarino, "The FED Says They Will Fix The Economy, We Are In Serious Trouble"

Gregory Mannarino, PM 8/6/24
"The FED Says They Will Fix The Economy, 
We Are In Serious Trouble"
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Adventures With Danno, "Massive Sale At Target!"

Full screen recommended.
Adventures With Danno, AM 8/6/24
"Massive Sale At Target!"
"In today's vlog, we are at Target, and there is a massive amount of different sales going on. From back to school sales to gift card rewards on select home care products. Get your notepad ready as I take you along with me as I showcase all of these different ways to save money at Target!"
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Meanwhile, elsewhere...
Full screen recommended.
Travelling with Russell, 8/6/24
"I Went to Russia's Largest Cheese Festival"
"Talk a walkaround with me at Russia's Largest Cheese Festival. The famous Istra Cheese Festival is held at the Istra Cheese Factory by Oleg Sirota. The festival brings together cheese makers from all over Russia."
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"How It Really Is"

"Back when I taught at UCLA, I was constantly amazed at how little so many students knew. Finally, I could no longer restrain myself from asking a student the question that had long puzzled me: ''What were you doing for the last 12 years before you got here?''
- Thomas Sowell
"The problem isn't that Johnny can't read. The problem isn't even that Johnny can't think. The problem is that Johnny doesn't know what thinking is; he confuses it with feeling."
- Thomas Sowell
"The trouble with most people is that they think with their hopes or fears or wishes rather than with their minds." - Will Durant
"It takes considerable knowledge just to  realize the extent of your own ignorance."
- Thomas Sowell

"The Upside Of Adversity"

"The Upside Of Adversity"
by Charles Hugh Smith

"We all know the downside of adversity: it's tiresome, and if it pushes us up against our limits long enough, it can break us. If my life is any indication, some of our adversity is outside our choosing and control, while other instances of adversity result from our own decisions and/or traits. We may take risks with the goal of advancing, and end up with adversity. We may choose a difficult path and find it far more arduous than we could possibly have imagined. Or we may have experienced success from the start, and be unprepared for the adversity that inevitably follows easy success.

Longtime correspondent Matthew W. recently observed that humans share a core trait with other forms of life: "Just like animals and crops, if you give too much up front, they grow weak, and being unable to stand any hardship, eventually succumb to simple problems that any normal living thing could tolerate. I see the same application in work. The one who must struggle ceaselessly during training flourishes when placed into a space that requires typical prowess, whereas those who are constantly led by the hand, require massive support systems to do even simple tasks, until their ineptitude ultimately bankrupts the company, leading to their loss of work."

This is the upside of adversity: a steady diet of adversity prepares one for both the low-level adversities of daily life (Murphy's Law: Anything that can go wrong will go wrong, etc.) but also for the metaphorical droughts and floods that push us to our limits of endurance and adaptability.

As the famed stoic emperor Marcus Aurelius observed, "You have power over your mind - not outside events. Realize this, and you will find strength." In other words, we don't control everything going on around us, we only control our response to the circumstances we find ourselves in.

Where we find strength to endure adversity depends on our experience and personality. In the modern era, the Existentialists perceived the world as devoid of absolutes, and so we make our lives by our actions. Ralph Waldo Emerson said as much: "Do the thing and you shall have the power."

My summary is: never mind what you think or feel, just do the work: persevere above all else. Marcus said much the same: "Begin - to begin is half the work, let half still remain; again begin this, and thou wilt have finished."

It is noteworthy that Marcus spent the entire first chapter of his Meditations expressing gratitude to all those who taught him and aided his advance in skills and wisdom. Gratitude for what we have and have learned helps us orient ourselves to the task at hand, enduring adversity and emerging stronger as a result. Here is Marcus: "Let not your mind run on what you lack as much as on what you have already."

There is also the strength found in faith, something philosopher Soren Kierkegaard addressed in the 19th century. To have faith that the adversity we must endure is as it should be, despite the difficulties and suffering: "And when one knows the frightful truth that there is no evasion or excuse, then one does what one shall." (page 15, "The Lily of the Field and the Bird of the Air")

For Kierkegaard, faith is not only seeking God's aid, it is a life-changing experience: "The function of prayer is not to influence God, but rather to change the nature of the one who prays."

Marcus expressed similar notions of fate and faith: "Nothing happens to any man that he is not formed by nature to bear. Here is the rule to remember in the future, When anything tempts you to be bitter: not, 'This is a misfortune' but 'To bear this worthily is good fortune.' Everything that happens happens as it should, and if you observe carefully, you will find this to be so."

The Taoists viewed the world as constant change, and our adversities arise from seeking the impossible: to lock in a situation that suits us. As Lao Tzu wrote in the Tao Te Ching (Dao De Jing), "Reversal is the movement of Tao." For the Taoists, the highest skills flow from constant practice until the skills summon themselves.

Marcus possessed the same wisdom: "Observe constantly that all things take place by change, and accustom thyself to consider that the nature of the Universe loves nothing so much as to change the things which are, and to make new things like them."

And so how to we proceed in the face of adversity? By moving forward: As Lao Tzu wrote: "The journey of a thousand li begins with a single step."

Here is Marcus: "Forward, as occasion offers. Never look round to see whether any shall note it… Be satisfied with success in even the smallest matter, and think that even such a result is no trifle."

For Kierkegaard, the ultimate purpose of life is to acquire oneself, to become true to oneself: "The most common form of despair is not being who you are. The greatest hazard of all, losing one's self, can occur very quietly in the world, as if it were nothing at all. No other loss can occur so quietly."

If we can remain true to ourselves, then we'll discover what Marcus knew: "Where a man can live, he can also live well." It is wise to focus on what we can do in the present moment, but also wise to explore our past for insights and strengths we can apply to the present: Marcus: "Confine yourself to the present." Kierkegaard: "Life can only be understood backwards; but it must be lived forwards."

"Money Size Comparison in Cash"

Full screen recommended.
Data Ball, 4/24
"Money Size Comparison in Cash"
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"$2.5 Quadrillion Disaster Waiting to Happen – 
Egon von Greyerz"
By Greg Hunter’s USAWatchdog.com

"There is sufficiency in the world 
for Man's need but not for his greed." 
Mahatma Gandhi

"Egon von Greyerz (EvG) stores gold for clients at the biggest private gold vault in the world buried deep in the Swiss Alps. EvG is a financial and precious metals expert. EvG is a former Swiss banker and an expert in risk. He says the risk in the global markets has never been this high.

EvG explains, “Credit has increased dramatically through derivatives. All instruments being issued now by banks, pension funds, stock funds, it’s all synthetic. There is no real underlying payments in anything almost. Therefore, my estimate for derivatives would be at least $2 quadrillion, and I think that is probably conservative. Then, we have debt on top of that of $300 trillion, and we also have a couple hundred trillion dollars of unfunded liabilities. So, we are talking about $2.5 QUADRILLION, and that’s with a global GDP of $88 trillion. So, there is a disaster waiting to happen, and especially because all this created money has created no value whatsoever. I always knew this would collapse, and it’s taken longer than I expected, but I think we are at the end of a major era. 

These derivatives, at some point soon, will actually turn into debt. Central banks will have to cover all the outstanding liabilities of the commercial banks as we are seeing now with Credit Suisse, Bank of England and etc. This is going to happen across the board. Whether it’s called derivatives or called debt, as far as I am concerned, it’s the same thing. It will have the same effect on the world financial system, which will be disastrous, of course.”

EvG says the derivative markets were simply a way for financial institutions to carry debt and not show it on their balance sheets. In the end, everything will balance out. EvG goes on to say, “Nobody can repay the debt, and they can’t even pay interest. So, therefore, when the debt implodes, so will the assets that were financed by this debt. So, both sides of the balance sheet have to come down. Whether it comes down by 50%, 75% or 90%, I don’t know. All I think about is risk, and the financial system will not survive in its present form. Central banks only use one kind of medicine, and that is more printed money. Now, you are getting negative returns on printed money. So, that is not going to save anything. 

Sadly we are looking at a situation when this system will start to implode. The rich are still rich, but the poor are really poor. Overall in the UK, Germany and most European countries, people don’t have enough money to live. This is a human disaster already. With food costs going up 25% and energy going up the same and gasoline, interest rates and rents, people don’t have enough money, and that is happening now. It’s a human disaster of mega proportions. It’s so sad, and governments will have no chance of doing anything about it. The risk is increasing exponentially,  and it is going to get worse.” There is much more in the 43-minute interview.

Join Greg Hunter on Rumble as he goes One-on-One with Egon von Greyerz of Matterhorn Asset Management, which can be found on GoldSwitzerland.com
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"How It Is In The Real World"

Full screen recommended.
Cash Jordan, 8/6/24
"Every NYC Subway Store is Closing… Over Crime"
"The NYC Subway is home to many a shopping center, but these are now 75% vacant as businesses flee and stores shut down. Some blame remote work and online shopping for the demise of NYC's subway malls, but perhaps there's another reason..."
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The Economic Ninja, 8/6/24
"It's Over"
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"America will never be destroyed from the outside. If we lose our 
freedoms it will be because we have destroyed ourselves from within." 
- Abraham Lincoln

What's it like near you, Good Citizen?

Dan, I Allegedly, "Crisis Alert - They Can’t Fix This"

Full screen recommended.
Dan, I Allegedly, AM 8/6/24
"Crisis Alert - They Can’t Fix This"
"With the stock market heading downward and real estate bad loans being hidden from us this is going to get much worse. We're diving deep into the chaos unfolding in the banking sector. As mortgage loans go unpaid and commercial real estate crashes, banks are hiding massive losses. This is a ticking time bomb that you need to know about!"
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Monday, August 5, 2024

"What We the People Owe"

"What We the People Owe"
by Brian Maher

"Donald Trump pledges to Make America Great Again. Kamala Harris pledges… something. Yet she believes her policies will work the identical effect. We are skeptical - deeply - that either is equal to the task.

The United States’ debt-to-GDP ratio exceeds 120%. Hard evidence indicates that nations with ratios exceeding 90% are destined to gutter. They are far too burdened by debt to get along much. Debt is an impossible millstone upon their straining necks. United States national debt recently scaled $35 trillion. Combined United States debt - public and private - exceeds $101 trillion. 101 trillion!

Then There’s the Interest: Meantime, the interest on its monstrous debts begins to devour its innards. The Congressional Budget Office projects that debt service will scale 3.2% of the United States economy next year. Only once before has debt service bulked so large - in 1991. That bill was largely the legacy of the elevated interest rates of the late 1970s.

What is our excuse today? None exists. Explains the Peter G. Peterson Foundation: "In the past, increases in deficits and the debt were associated with temporary or one-time episodes, such as war or economic downturns. Now, however, deficits have become the norm due to the structural mismatch between federal spending and revenues.

CBO estimates that the gap will continue to grow; federal spending is projected to grow from 23.1% of GDP in 2024 to 27.9% by 2054, while revenues would only climb from 17.5% of GDP in 2024 to 18.8% in 2054."

It Won’t Change Under Trump: Would a President Trump declare a halt - and draw blue lines across the federal budget? We do not believe he would. The fellow spent extravagantly and luxuriously in his initial term… even prior to the plague. The frugal ghost of Calvin Coolidge is unlikely to invade him next time. Poor Cal’s shade has been absent from 1600 Pennsylvania Ave. since the Great Depression. It will remain absent from 1600 Pennsylvania Ave. And the Republican Party - that Mr. Trump would theoretically represent - long ago exorcized Cal’s penny-pinching spirit. It likes to get elected. It therefore likes to spend money.

Harris Would Be Even Worse: Meantime, the sitting vice president, la Harris, represents what has accurately been labeled “the party of government.” That is of course the Democratic Party. Would a Democratic president sever the purse strings that fund government? The question is itself the answer. If elected, Ms. Harris would only spend. She would not cut. In brief: Government will spend under either regency, Mr. Trump or Ms. Harris. The former may purchase greater quantities of guns than butter… while the latter may purchase greater quantities of butter than guns. Yet it makes no nevermind. The results will equal.

Just No Political Will: “Even awful fiscal problems are fixable with the right steps,” says Daily Reckoning contributor Jeffrey Tucker, adding: "The problem is that the steps absolutely must include dramatic spending cuts, meaning 1–2% of GDP for starters or about $280–500 billion, which is not even on the table. “Not even on the table,” Jeffrey says.

Nor will dramatic spending cuts appear upon the table. Here Jeffrey lowers his ax upon the problem’s root: "The trouble is that there is very little political will in this country right now to cut the budget. And by cut, again, I don’t mean cuts in the rate of increase, like Washington language always says. I mean real cuts with whole agencies being made to disappear, dozens of them instantly. Doing this is entirely possible with political will. But I’ve yet to see any evidence that such will exists in the United States today." You see no evidence of the political will because none exists. Yet politicians do not bear sole responsibility…

Look in the Mirror, Citizen: It is easy to indict the politician, it is true. It is easy to say this rascal has sunk the nation $35 trillion in debt. Yet as we have argued before: If we haul the politician into the dock… We the People must go with him. That is because the politician is simply We the People’s mirror. Could politicians humbug us into a $35 trillion debt absent our knowledge - or consent? Only under a very, very strange species of democracy.

We like being a big deal in this world. We therefore demand a glistening military machine with every whistle and bell. We also like being tickled and wooed. Thus we demand heaping doses of Social Security… Medicare… a Rolls-Royce education… and a million gaudy baubles. Yet we do not wish to pay for them in full. Gimme, gimme, we bark from one corner of our mouths. But don’t raise my taxes, we bellow from the other.

“Democracy in Action”: We claim we are heart and soul for limited government. Yet are we simply heart and soul for ourselves? Give me that tax break, says the one. No, give it to me, says the other. You can both go scratching, says the third. I deserve it more. A fourth files a claim of his own.

Meantime, the hard-luck farmer wants his back scratched. The hard-pressed businessman wants his belly rubbed. The hard-worked teacher wants her apple. Millions more are hard at the business. All scheme to work the angles, to get a bucket in the stream, to get a snout in the trough… to catch a penny. It is the triumph of “special interests” when the other fellow gets his - when his parsnips are buttered. Yet it is “democracy in action” when our own parsnips are buttered.

“Every Nation Gets the Government It Deserves”: Your editor does not claim a moral pristinity. He does not sit in judgment - or stand in judgment. As a scientist of American democracy, he merely observes… and studies. And as he has conceded before, he himself has parsnips. And as anyone, he enjoys a good buttering of them.

Why not get when the getting is there to be gotten? If Americans en masse opted to decline the offering, your editor would fall in with them… and reject the offer. He would enlist as a dutiful member of the regiment, willingly broken to the common harness. Yet Americans en masse will not decline the offering. Why then should he? Why should you? “Every nation gets the government it deserves,” said 18th-century French philosopher Joseph de Maistre. The United States has the government it deserves…"

"This Isn’t The End For The Financial Markets – The Truth Is That This Is Just The Beginning Of The Chaos…"

"This Isn’t The End For The Financial Markets – 
The Truth Is That This Is Just The Beginning Of The Chaos…"
by Michael Snyder

"If you are surprised by what is happening in the financial world right now, you probably haven’t been paying much attention. Stock prices were obscenely high and many investors were massively overleveraged. The Dow Jones Industrial Average plummeted by more than 1,000 points on Monday, and stock prices are still obscenely high and many investors are still massively overleveraged. During the days ahead, we are going to see some wild ups and some wild downs, and this tragedy is going to take some time to fully play out. But without a doubt, we have got a major problem on our hands.

After the chaos that we witnessed on Friday, I wasn’t sure that we would see even more carnage on Monday, but that is precisely what transpired…"The Dow Jones Industrial Average declined 1,033.99 points, or 2.6%, to close at 38,703.27. The S&P 500 fell 3%, ending at 5,186.33. Both averages notched their worst daily losses since September 2022. The tech-heavy Nasdaq Composite shed 3.43%, finishing at 16,200.08. At one point the Nasdaq was down more than 1,000 points."

That is the first time in history that has ever happened. If you can believe it, there was a time early on Monday when tech companies had collectively lost close to a trillion dollars in market capitalization. Tech stocks bounced back a bit the rest of the day, but the “Magnificent 7” are still collectively down about 3 trillion dollars from their all-time record high market capitalizations. That is a lot of money.

Over the last three trading sessions, the Dow, the S&P 500 and the Nasdaq have all gotten absolutely hammered…"The Dow fell 5.24% over the last three trading days, turning in its worst three-day loss since Jun. 14, 2022, when it tumbled 5.91% in three days. The tech-heavy Nasdaq Composite dropped 7.95% in the period. This marked the Nasdaq’s biggest three-day fall since Jun.13, 2022, when it tanked 10.57% in a three-day period. The S&P 500 lost 6.08% in three days for its sharpest pullback in that span since Jun.14, 2022, when it shed 7.03%."

But in Japan things have been even worse. On Monday, the Japanese experienced a stock market crash of epic proportions…"In Asia overnight, Japan stocks confirmed a bear market as Asia-Pacific investors had their first chance to react to the sour jobs figures in the U.S. from Friday. The 12.4% loss on the Nikkei, which closed at 31,458.42, was the worst day for the index since the “Black Monday” of 1987 hit Wall Street. The loss of 4,451.28 points on the index was also the largest in terms of points in its entire history."

The good news is that we are due for a dead cat bounce. As I write this article, Japanese stocks are bouncing back in a major way, and the same thing could happen to U.S. stocks when the markets open here. So why is this happening?

Some are blaming the bad economic news that we have been getting and inaction by the Federal Reserve. Others are suggesting that what we are witnessing “is the result of investors having to untangle complicated, heavily leveraged trades”…But economists say the stock slide is not a surefire sign that a recession is ahead. The current sell-off, they say, is the result of investors having to untangle complicated, heavily leveraged trades that have artificially boosted stock values. The truth is that a lot of factors are at play.

But after several years of one way traffic, a lot of people are quite shocked by how rapidly stock prices have started to move in the other direction…“Investors have gotten so used to the stock market only going one way that now people are suddenly realizing, ‘Oh, stocks can also go down?’ ” said Torsten Sløk, chief economist at Apollo Global Management. “This is a situation where one weak data point – Friday’s jobs numbers – brought the bears out of hibernation.”

For a long time, the Federal Reserve and other global central banks were artificially propping up the financial markets. Now that artificial support has been withdrawn, and many are having difficulty “adjusting to the end of easy money globally”…“This is not the recession train; it’s just a good old-fashioned market panic,” said Joe Brusuelas, principal and chief economist for RSM US. “This is not a D.C.-inspired event, about a slowing job market or the Fed being behind the curve. It’s about a larger regime change, where investors are adjusting to the end of easy money globally.”

Of course the Fed could choose to intervene at any time. At this moment there is growing optimism that the Fed will come riding to the rescue with an emergency rate cut. In fact, many bond traders are placing very large bets that this is about to happen…"Bond traders are piling into bets that the US economy is on the verge of deteriorating so quickly that the Federal Reserve will need to start easing monetary policy aggressively - potentially before their next scheduled meeting - to head off a recession."

I wouldn’t recommend holding your breath waiting for that to take place. The Dow would probably have to fall to at least 35,000 before the Fed would even consider an emergency rate cut. But I do believe that one will probably be coming at their next scheduled meeting. Of course a rate cut isn’t exactly going to save us from what is eventually coming.

As James Howard Kunstler has aptly noted, “everything that can break is breaking”…"The wait is over. Everything that can break is breaking: stock markets, bond markets, the galaxy of derivatives — bets on this and that, which will never be honored. Banks are next. Gold and silver are hanging in there for dear life just now, because they’re actually worth something."

This doesn’t mean that every day is going to be a down day for the financial markets. During bull markets, the waters are calm and stock prices tend to rise slowly and steadily. During bear markets, the waters get very choppy and there are wild ups and downs. So if the Dow jumps hundreds of points in a single day, don’t think that the crisis is over. A huge swing either way is a bad sign. Also, please understand that we are not even close to the center of the storm yet. What we are experiencing right now is just early turbulence. The real pain is not likely to arrive for quite some time."
o

Canadian Prepper, "WTF Alert! Emergency Meeting w/Russia-Iran; Closed Airspace; Nuclear Bunker Opens; Market Chaos"

Full screen recommended.
Canadian Prepper, 8/5/24
"WTF Alert! Emergency Meeting w/Russia-Iran; 
Closed Airspace; Nuclear Bunker Opens; Market Chaos"
Comments here:

"Something Like Reverence..."

“When the pain of leaving behind what we know outweighs the pain of embracing it, or when the power we face is overwhelming and neither flight nor fight will save us, there may be salvation in sitting still. And if salvation is impossible, then at least before perishing we may gain a clearer vision of where we are. By sitting still I do not mean the paralysis of dread, like that of a rabbit frozen beneath the dive of a hawk. I mean something like reverence, a respectful waiting, a deep attentiveness to forces much greater than our own.”
- Scott Russell Sanders
o
Folks, I fear our time for such reverence has come, and this is only the beginning.
This global economic collapse will trigger total social chaos and collapse everywhere, with
 unimaginably horrifying consequences for us all, including a very likely nuclear world war.
 There is no escape...we must do our best to bravely face it. Stay strong, folks. 
God help us, God help us all...
Full screen recommended.
Royal Scots Dragoon Guards, "Amazing Grace"

"If..."

If you were facing a firing squad, and we all are...
wouldn't you at least want to know why? 
And who stood you against the wall?

”The 5 Stages of Economic Collapse”

”The 5 Stages of Economic Collapse” 
by Dmitry Orlov

“Elizabeth Kübler-Ross defined the five stages of coming to terms with grief and tragedy as denial, anger, bargaining, depression, and acceptance, and applied it quite successfully to various forms of catastrophic personal loss, such as death of a loved one, sudden end to one’s career, and so forth. Several thinkers, notably James Howard Kunstler and, more recently John Michael Greer, have pointed out that the Kübler-Ross model is also quite terrifyingly accurate in reflecting the process by which society as a whole (or at least the informed and thinking parts of it) is reconciling itself to the inevitability of a discontinuous future, with our institutions and life support systems undermined by a combination of resource depletion, catastrophic climate change, and political impotence.

But so far, little has been said specifically about the finer structure of these discontinuities. Instead, there is to be found continuum of subjective judgments, ranging from “a severe and prolonged recession” (the prediction we most often read in the financial press), to Kunstler’s evocative but unscientific-sounding “clusterf**k,” to the ever-popular “Collapse of Western Civilization,” painted with an ever-wider brush-stroke.

For those of us who have already gone through all of the emotional stages of reconciling ourselves to the prospect of social and economic upheaval, it might be helpful to have a more precise terminology that goes beyond such emotionally charged phrases. Defining a taxonomy of collapses might prove to be more than just an intellectual exercise: based on our abilities and circumstances, some of us may be able to specifically plan for a certain stage of collapse as a temporary, or even permanent, stopping point.

Even if society at the current stage of socioeconomic complexity will no longer be possible, and even if, as Tainter points in his “Collapse of Complex Societies,” there are circumstances in which collapse happens to be the correct adaptive response, it need not automatically cause a population crash, with the survivors disbanding into solitary, feral humans dispersed in the wilderness and subsisting miserably. Collapse can be conceived of as an orderly, organized retreat rather than a rout.

For instance, the collapse of the Soviet Union – our most recent and my personal favorite example of an imperial collapse – did not reach the point of political disintegration of the republics that made it up, although some of them (Georgia, Moldova) did lose some territory to separatist movements. And although most of the economy shut down for a time, many institutions, including the military, public utilities, and public transportation, continued to function throughout. And although there was much social dislocation and suffering, society as a whole did not collapse, because most of the population did not lose access to food, housing, medicine, or any of the other survival necessities. The command-and-control structure of the Soviet economy largely decoupled the necessities of daily life from any element of market psychology, associating them instead with physical flows of energy and physical access to resources. Thus situation, as I argue in my forthcoming book, Reinventing Collapse, allowed the Soviet population to inadvertently achieve a greater level of collapse-preparedness than is currently possible in the United States.

Having given a lot of thought to both the differences and the similarities between the two superpowers – the one that has collapsed already, and the one that is collapsing as I write this – I feel ready to attempt a bold conjecture, and define five stages of collapse, to serve as mental milestones as we gauge our own collapse-preparedness and see what can be done to improve it.

Rather than tying each phase to a particular emotion, as in the Kübler-Ross model, the proposed taxonomy ties each of the five collapse stages to the breaching of a specific level of trust, or faith, in the status quo. Although each stage causes physical, observable changes in the environment, these can be gradual, while the mental flip is generally quite swift. It is something of a cultural universal that nobody (but a real fool) wants to be the last fool to believe in a lie.

Stages of Collapse:

Stage 1: Financial collapse. Faith in “business as usual” is lost. The future is no longer assumed resemble the past in any way that allows risk to be assessed and financial assets to be guaranteed. Financial institutions become insolvent; savings are wiped out, and access to capital is lost.

Stage 2: Commercial collapse. Faith that “the market shall provide” is lost. Money is devalued and/or becomes scarce, commodities are hoarded, import and retail chains break down, and widespread shortages of survival necessities become the norm.

Stage 3: Political collapse. Faith that “the government will take care of you” is lost. As official attempts to mitigate widespread loss of access to commercial sources of survival necessities fail to make a difference, the political establishment loses legitimacy and relevance.

Stage 4: Social collapse. Faith that “your people will take care of you” is lost. As local social institutions, be they charities, community leaders, or other groups that rush in to fill the power vacuum, run out of resources or fail through internal conflict.

Stage 5: Cultural collapse. Faith in the goodness of humanity is lost. People lose their capacity for “kindness, generosity, consideration, affection, honesty, hospitality, compassion, charity” (Turnbull, "The Mountain People"). Families disband and compete as individuals for scarce resources. The new motto becomes “May you die today so that I die tomorrow” (Solzhenitsyn, "The Gulag Archipelago"). There may even be some cannibalism.

Although many people imagine collapse to be a sort of elevator that goes to the sub-basement (our Stage 5) no matter which button you push, no such automatic mechanism can be discerned. Rather, driving us all to Stage 5 will require that a concerted effort be made at each of the intervening stages. That all the players seem poised to make just such an effort may give this collapse the form a classical tragedy – a conscious but inexorable march to perdition – rather than a farce (“Oops! Ah, here we are, Stage 5.” – “So, whom do we eat first?” – “Me! I am delicious!”) Let us sketch out this process.

Financial collapse, as we are are currently observing it, consists of two parts. One is that a part of the general population is forced to move, no longer able to afford the house they bought based on inflated assessments, forged income numbers, and foolish expectations of endless asset inflation. Since, technically, they should never have been allowed to buy these houses, and were only able to do so because of financial and political malfeasance, this is actually a healthy development. The second part consists of men in expensive suits tossing bundles of suddenly worthless paper up in the air, ripping out their remaining hair, and (some of us might uncharitably hope) setting themselves on fire on the steps of the Federal Reserve. They, to express it in their own vernacular, “f**ked up,” and so this is also just as it should be.

The government response to this could be to offer some helpful homilies about “the wages of sin” and to open a few soup kitchens and flop houses in a variety of locations including Wall Street. The message would be: “You former debt addicts and gamblers, as you say, ‘f****d up,’ and so this will really hurt for a long time. We will never let you anywhere near big money again. Get yourselves over to the soup kitchen, and bring your own bowl, because we don’t do dishes.” This would result in a stable Stage 1 collapse – the Second Great Depression.

However, this is unlikely, because in the US the government happens to be debt addict and gambler number one. As individuals, we may have been as virtuous as we wished, but the government will have still run up exorbitant debts on our behalf. Every level of government, from local municipalities and authorities, which need the financial markets to finance their public works and public services, to the federal government, which relies on foreign investment to finance its endless wars, is addicted to public debt. They know they cannot stop borrowing, and so they will do anything they can to keep the game going for as long as possible.

About the only thing the government currently seems it fit to do is extend further credit to those in trouble, by setting interest rates at far below inflation, by accepting worthless bits of paper as collateral and by pumping money into insolvent financial institutions. This has the effect of diluting the dollar, further undermining its value, and will, in due course, lead to hyperinflation, which is bad enough in any economy, but is especially serious for one dominated by imports. As imports dry up and the associated parts of the economy shut down, we pass Stage 2: Commercial Collapse.

As businesses shut down, storefronts are boarded up and the population is left largely penniless and dependent on FEMA and charity for survival, the government may consider what to do next. It could, for example, repatriate all foreign troops and set them to work on public works projects designed to directly help the population. It could promote local economic self-sufficiency, by establishing community-supported agriculture programs, erecting renewable energy systems, and organizing and training local self-defense forces to maintain law and order. The Army Corps of Engineers could be ordered to bulldoze buildings erected on former farmland around city centers, return the land to cultivation, and to construct high-density solar-heated housing in urban centers to resettle those who are displaced. In the interim, it could reduce homelessness by imposing a steep tax on vacant residential properties and funneling the proceeds into rent subsidies for the indigent. With plenty of luck, such measures may be able to reverse the trend, eventually providing for a restoration of pre-Stage 2 conditions.

This may or may not be a good plan, but in any case it is rather unrealistic, because the United States, being so deeply in debt, will be forced to accede to the wishes of its foreign creditors, who own a lot of national assets (land, buildings, and businesses) and who would rather see a dependent American population slaving away working off their debt than a self-sufficient one, conveniently forgetting that they have mortgaged their children’s futures to pay for military fiascos, big houses, big cars, and flat-screen television sets. Thus, a much more likely scenario is that the federal government (knowing who butters their bread) will remain subservient to foreign financial interests. It will impose austerity conditions, maintain law and order through draconian means, and aid in the construction of foreign-owned factory towns and plantations. As people start to think that having a government may not be such a good idea, conditions become ripe for Stage 3.

If Stage 1 collapse can be observed by watching television, observing Stage 2 might require a hike or a bicycle ride to the nearest population center, while Stage 3 collapse is more than likely to be visible directly through one’s own living-room window, which may or may not still have glass in it. After a significant amount of bloodletting, much of the country becomes a no-go zone for the remaining authorities. Foreign creditors decide that their debts might not be repaid after all, cut their losses and depart in haste. The rest of the world decides to act as if there is no such place as The United States – because “nobody goes there any more.” So as not to lose out on the entertainment value, the foreign press still prints sporadic fables about Americans who eat their young, much as they did about Russia following the Soviet collapse. A few brave American expatriates who still come back to visit bring back amazing stories of a different kind, but everyone considers them eccentric and perhaps a little bit crazy.

Stage 3 collapse can sometimes be avoided by the timely introduction of international peacekeepers and through the efforts of international humanitarian NGOs. In the aftermath of a Stage 2 collapse, domestic authorities are highly unlikely to have either the resources or the legitimacy, or even the will, to arrest the collapse the dynamic and reconstitute themselves in a way that the population would accept.

As stage 3 collapse runs its course, the power vacuum left by the now defunct federal, state and local government is filled by a variety of new power structures. Remnants of former law enforcement and military, urban gangs, ethnic mafias, religious cults and wealthy property owners all attempt to build their little empires on the ruins of the big one, fighting each other over territory and access to resources. This is the age of Big Men: charismatic leaders, rabble-rousers, ruthless Macchiavelian princes and war lords. In the luckier places, they find it to their common advantage to pool their resources and amalgamate into some sort of legitimate local government, while in the rest their jostling for power leads to a spiral of conflict and open war.

Stage 4 collapse occurs when society becomes so disordered and impoverished that it can no longer support the Big Men, who become smaller and smaller, and eventually fade from view. Society fragments into extended families and small tribes of a dozen or so families, who find it advantageous to band together for mutual support and defense. This is the form of society that has existed over some 98.5% of humanity’s existence as a biological species, and can be said to be the bedrock of human existence. Humans can exist at this level of organization for thousands, perhaps millions of years. Most mammalian species go extinct after just a few million years, but, for all we know, Homo Sapiens still have a million or two left.

If pre-collapse society is too atomized, alienated and individualistic to form cohesive extended families and tribes, or if its physical environment becomes so disordered and impoverished that hunger and starvation become widespread, then Stage 5 collapse becomes likely. At this stage, a simpler biological imperative takes over, to preserve the life of the breeding couples. Families disband, the old are abandoned to their own devices, and children are only cared for up to age 3. All social unity is destroyed, and even the couples may disband for a time, preferring to forage on their own and refusing to share food. This is the state of society described by the anthropologist Colin Turnbull in his book “The Mountain People.” If society prior to Stage 5 collapse can be said to be the historical norm for humans, Stage 5 collapse brings humanity to the verge of physical extinction.

As we can easily imagine, the default is cascaded failure: each stage of collapse can easily lead to the next, perhaps even overlapping it. In Russia, the process was arrested just past Stage 3: there was considerable trouble with ethnic mafias and even some warlordism, but government authority won out in the end. In my other writings, I go into a lot of detail in describing the exact conditions that inadvertently made Russian society relatively collapse-proof. Here, I will simply say that these ingredients are not currently present in the United States.

While attempting to arrest collapse at Stage 1 and Stage 2 would probably be a dangerous waste of energy, it is probably worth everyone’s while to dig in their heels at Stage 3, definitely at Stage 4, and it is quite simply a matter of physical survival to avoid Stage 5. In certain localities – those with high population densities, as well as those that contain dangerous nuclear and industrial installations – avoiding Stage 3 collapse is rather important, to the point of inviting foreign troops and governments in to maintain order and avoid disasters. Other localities may be able to prosper indefinitely at Stage 3, and even the most impoverished environments may be able to support a sparse population subsisting indefinitely at Stage 4.

Although it is possible to prepare directly for surviving Stage 5, this seems like an altogether demoralizing thing to attempt. Preparing to survive Stages 3 and 4 may seem somewhat more reasonable, while explicitly aiming for Stage 3 may be reasonable if you plan to become one of the Big Men. Be that as it may, I must leave such preparations as an exercise for the reader. My hope is that these definitions of specific stages of collapse will enable a more specific and fruitful discussion than the one currently dominated by such vague and ultimately nonsensical terms as “the collapse of Western civilization.”
o
Download "The Collapse of Complex Societies", 
by Joseph A. Tainter, here:

"They Just Admitted The Financial Collapse Is Here And They Are Hiding The Reason"

Full screen recommended.
Redacted, 8/5/24
"They Just Admitted The Financial Collapse 
Is Here And They Are Hiding The Reason"
Comments here:

"Stock Market Crash Has Begun As The U.S. Economy Heading Into An Economic Collapse"

Full screen recommended.
Epic Economist, 8/5/24
"Stock Market Crash Has Begun As The 
U.S. Economy Heading Into An Economic Collapse"

"This morning Japan’s Nikkei recorded its worst stock market crash, losing 4,451.28 points from the previous day's closing amid panic selling triggered by fears of a possible U.S. recession and the yen's strength. For a long time, there was a lot of denial about the direction that the U.S. economy was heading. The Biden administration and the mainstream media just kept insisting that everything was just fine even though everyone could clearly see that it wasn’t. But now reality is setting in. Last week we got some numbers that Wall Street really didn’t like, and a massive temper tantrum ensued. The stock market crash that we witnessed on Friday was quite breathtaking, and it became much worse this week. Yes, this is really happening.

On Friday, many were surprised when the employment numbers were much worse than anticipated. But the only reason why the official figure showed an addition of 114,000 jobs last month is because the birth/death model added 246,000 jobs to the final number. In any event, even if we take the government’s report at face value, the Sahm Rule has still been officially triggered. What is Sam Rule? It is an indicator that is used to provide an early recession signal. The rule stipulates that a recession is likely when the three-month moving average of the jobless rate is at least a half-percentage point higher than the 12-month low. Even though this indicator has successfully predicted every single recession since 1970, Fed Chair Jerome Powell insists that it may not be correct this time around. 

Unfortunately, it appears to be inevitable that the unemployment rate will go even higher because large companies all over America continue to shed workers. Businesses from coast to coast have fallen on hard times, and business bankruptcy filings have risen by more than 40 percent during the past 12 monthsnand have now reached a number not seen since the second quarter of 2020, at the peak of lockdowns. American households are following along, with total bankruptcy filings up 16.2 percent in the past year, including 132,710 new filings in the second quarter of 2024 alone. The last time business bankruptcy filings were this high was during the lockdowns in the early days of the pandemic. But we don’t have any lockdowns to blame the current wave of bankruptcies on. Right now, our banks are sitting on gigantic mountains of commercial real estate loans that have gone bad.

For many of those banks, it is just a matter of time before they go belly up. But don’t just take my word for it. Recently, a number of prominent experts have been warning that a tsunami of bank failures is on the way. Yes, this is really happening. A tremendous amount of financial chaos is in our future, and most people are going to be completely blindsided by it. There is one thing that the Federal Reserve could do to mitigate the damage. We are being told that the Fed “might” give us a rate cut in September. That isn’t going to do the job. We need help now, because the economic collapse are already starting to erupt all around us."
Comments here:

"We're so freakin' doomed!" - The Mogambo Guru

Jeremiah Babe, "Monday Market Massacre, The Worst Is Yet To Come"

Jeremiah Babe, 8/5/24
"Monday Market Massacre, 
The Worst Is Yet To Come"
Comments here:

Musical Interlude: 2002, "Remember Now"

Full screen recommended.
2002, "Remember Now"

"A Look to the Heavens..."

"Dwarf galaxies NGC 147 (left) and NGC 185 stand side by side in this sharp telescopic portrait. The two are not-often-imaged satellites of M31, the great spiral Andromeda Galaxy, some 2.5 million light-years away. Their separation on the sky, less than one degree across a pretty field of view, translates to only about 35 thousand light-years at Andromeda's distance, but Andromeda itself is found well outside this frame. 
Brighter and more famous satellite galaxies of Andromeda, M32 and M110, are seen closer to the great spiral. NGC 147 and NGC 185 have been identified as binary galaxies, forming a gravitationally stable binary system. But recently discovered faint dwarf galaxy Cassiopeia II also seems to be part of their system, forming a gravitationally bound group within Andromeda's intriguing population of small satellite galaxies."

The Poet: Carl Sandburg, “From the Shore"

“From the Shore"

“A lone gray bird,
Dim-dipping, far-flying,
Alone in the shadows and grandeurs and tumults
Of night and the sea
And the stars and storms.

Out over the darkness it wavers and hovers,
Out into the gloom it swings and batters,
Out into the wind and the rain and the vast,
Out into the pit of a great black world,
Where fogs are at battle, sky-driven, sea-blown,
Love of mist and rapture of flight,
Glories of chance and hazards of death
On its eager and palpitant wings.

Out into the deep of the great dark world,
Beyond the long borders where foam and drift
Of the sundering waves are lost and gone
On the tides that plunge and rear and crumble.”
- Carl Sandburg