Full screen recommended.
Deuter, "Music of the Night: East of The Full Moon"
So, we rise from the rubble...
Wednesday, July 21, 2021
"A Look to the Heavens"
“Here is one of the largest objects that anyone will ever see on the sky. Each of these fuzzy blobs is a galaxy, together making up the Perseus Cluster, one of the closest clusters of galaxies. The cluster is seen through a foreground of faint stars in our own Milky Way Galaxy.
Near the cluster center, roughly 250 million light-years away, is the cluster's dominant galaxy NGC 1275, seen above as a large galaxy on the image left. A prodigious source of x-rays and radio emission, NGC 1275 accretes matter as gas and galaxies fall into it. The Perseus Cluster of Galaxies, also cataloged as Abell 426, is part of the Pisces-Perseus supercluster spanning over 15 degrees and containing over 1,000 galaxies. At the distance of NGC 1275, this view covers about 15 million light-years.”
“This Is Reality - Businesses Ain’t Coming Back; Banks Will Steal Your Home; Don’t Hire Zombies”
Jeremiah Babe, PM 7/21/21:
“This Is Reality - Businesses Ain’t Coming Back;
Banks Will Steal Your Home; Don’t Hire Zombies”
Gregory Mannarino, PM 7/21/21: "Crude Oil SURGES Higher And The FReAk ShOW Stock Market Gains Again!"
Gregory Mannarino, PM 7/21/21:
"Crude Oil SURGES Higher And
The FReAk ShOW Stock Market Gains Again!"
"Time to Grab an Umbrella"
"Time to Grab an Umbrella"
by Brian Maher
"Heavy weather barreled through Wall Street Monday - beneath the weatherman’s detection - and gave investors a savage drenching. Squalling rains washed away 925 points from the Dow Jones Industrial Average… before relenting late in the day. High pressure, high skies and high expectations were back yesterday. The Dow Jones reclaimed 536 points. It took back another 286 points today.
Once again… all is peace. Yahoo! Finance: "Stocks opened higher on Wednesday, following a session in which investors... cast aside their fears that a resurgence of COVID-19 cases might derail a red-hot economic recovery, as strong earnings provided a ballast to beaten-down markets." Strong earnings? "A batch of encouraging second-quarter earnings on Wednesday from industry bellwethers Coca-Cola (KO), Johnson & Johnson (JNJ) and Verizon (VZ) gave investors reason to focus on the fundamentals. All three companies topped market expectations, converging with sentiment that drove Tuesday's rally."
Just so. Yet, we are not half so convinced the weather will hold.
Conditions Are Too Good: The barometric pressure has risen to delirious levels, unsustainable levels. The pressure in the gauge cannot sustain. Mr. Robert Shiller’s famous CAPE ratio for the S&P 500 goes at 38.19 - a near-record. 16 is about par.
Stocks were only pricier prior to the hell storm of 2000. Not even the peak roars of the 1920s approached today’s extravagances. CAPE came in at 32.56 before the Crash of ‘29. Again… today the CAPE ratio goes at 38.19. The S&P - argues Mr. Shiller - is presently more expensive than in 96% of all previous quarters, 141 years running. But might today’s valuations outdo even their 2000 records?
Even More Insane Than 2000: Mr. Fred Hickey, editor of The High-Tech Strategist, argues they do. But the Federal Reserve’s false fireworks blind the vision: "This market is insanely overpriced. The price-to-sales ratio for the S&P 500 is at 3x. That’s 30% above the peak of 2000 which was crazy. Market cap-to-GDP is at record highs, too. Basically, every indicator other than the P/E ratio is at a record high. The only reason the P/E ratio is slightly below the 2000 record is because of all the financial engineering that’s done to try to pump up the earnings. As insane as the 2000 bubble was, this is more insane - and it’s broader. It’s a direct result of the Federal Reserve and the other central banks pumping enormous amounts of money into the system."
In addition: "This market has become terribly narrow which is another big risk. The record highs are driven mostly by five stocks: Apple, Microsoft, Amazon, Google and Facebook. Their combined total valuation is $9 trillion, and people continue to pile into this small group of names. This trend has been accelerated by the movement of passive investing where everybody just piles into the same ETFs.
The market cap of the S&P 500 is $36 trillion, and those five companies are now 25% of the index. So when people put money into the ETFs, they essentially buy more of these big tech stocks. It’s a self-perpetuating phenomenon until it ends - and when it ends, the market is going to collapse because the valuations don’t make sense. Look at Apple: Only a couple of years ago, people were getting excited about Apple hitting $1 trillion. Now its market cap is $2.5 trillion, and the stock trades at 33x peak earnings. That’s absolute insanity!"
Insanity, we must agree, and absolute.
No Problem, Don’t Worry: Yet Wall Street’s drummers insist today’s obscene valuations are justified in full. That is because today’s obscene interest rates - obscenely low interest rates - warrant them. Stripped to bolts and nuts, the argument runs this way: Stock prices merely represent the current value of future cash flows. Lower borrowing costs - lower interest rates - raise earnings. So long as rates remain frozen at low settings, today’s valuations are swell.
Yet analyst Charlie Bilello says have another guess. The theory finds little excuse in the facts… "Mr. Bilello has interrogated the data stretching to 1881. He finds: "If low interest rates were the primary driver of higher valuations, we should see the highest valuations in the lowest interest rate periods. But this is not the case. Instead we find the highest average CAPE ratios [when interest rates were between 4.5% to 6%]. This occurred during the dot-com bubble in the late 1990s and early 2000s."
Meantime, today’s interest rate... paralleling yields on the 10-year Treasury note... pegs along at 1.29%. More, please: "The full data set shows a correlation of -0.24, meaning that there is a slight historical tendency for lower interest rates to be associated with higher valuations (and vice verse). But it’s not nearly as predictive as many suggest.
There have been a number of periods where interest rates and valuations have been low (1934-35, 1938, 1940-1954) and other periods where interest rates and valuations have been high (1995-2000). There is no precise formula that can give you the appropriate valuation at a given interest rate."
This Time Is Always Different: Yet the wish is the father of the thought. Wall Street wishes today’s slim interest rates authorize today’s obese valuations. And so the thought has its father… in the wish. But each stock market delirium runs to different themes, different narratives, all lovely, all logical - and all false. They are all bound together by one common feature: The fool belief that this time is different.
“Stocks have reached a permanently high plateau,” it was argued in 1929. “Markets are perfectly efficient,” it was said in the 1960s. “Earnings do not matter,” it was claimed in 1999. “Low interest rates justify high valuations,” it is blabbed in 2021. Each previous narrative came to grief, wrecked upon reality’s hard rocks. We have every suspicion the present narrative will end upon the identical rocks.
Time to Buy Your Umbrella: We do not know when the great undoing will occur. Nor do we pretend to know. We have forecast too many false tempests, too many false tornadoes, too many false typhoons. Yet we are most alarmed by extended stretches of fair weather. That is when guards come down.
And when guards come down, ours goes up. It is presently up. It is a terrible pity no one purchases an umbrella when it is most available, when blue skies stretch to the horizon. Come the inevitable downpour, most are caught in the open, unprepared. Perhaps this is the time to purchase your umbrella. Many are available. And they are on sale..."
"Animals"
"Animals"
"I think I could turn and live with animals, they
are so placid and self contain’d;
I stand and look at them long and long,
They do not sweat and whine about their condition;
They do not lie awake in the dark and weep for their sins;
They do not make me sick discussing their duty to God;
Not one is dissatisfied - not one is demented with
the mania of owning things;
Not one kneels to another, nor to his kind that
lived thousands of years ago;
Not one is respectable or industrious over the whole earth."
- Walt Whitman
"The World Rests In The Night..."
“The world rests in the night. Trees, mountains, fields, and faces are released from the prison of shape and the burden of exposure. Each thing creeps back into its own nature within the shelter of the dark. Darkness is the ancient womb. Nighttime is womb-time. Our souls come out to play. The darkness absolves everything; the struggle for identity and impression falls away. We rest in the night.”
- John O'Donohue,
"Anam Cara: A Book of Celtic Wisdom"
○
“On the day when
the weight deadens
on your shoulders
and you stumble,
may the clay dance
to balance you.
And when your eyes
freeze behind
the grey window
and the ghost of loss
gets in to you,
may a flock of colors,
indigo, red, green,
and azure blue
come to awaken in you
a meadow of delight.
When the canvas frays
in the currach of thought
and a stain of ocean
blackens beneath you,
may there come across the waters
a path of yellow moonlight
to bring you safely home.
May the nourishment of the earth be yours,
may the clarity of light be yours,
may the fluency of the ocean be yours,
may the protection of the ancestors be yours.
And so may a slow
wind work these words
of love around you,
an invisible cloak
to mind your life.”
○
John O'Donohue was an Irish author, poet, philosopher and former Catholic priest. He was born in County Clare on January 1, 1956. He died suddenly on January 4, 2008. He is best known for popularizing Celtic spirituality and is the author of a number of best-selling books on the subject.
"Tomorrow’s Trouble Is Today’s Fun"
"Tomorrow’s Trouble Is Today’s Fun"
by Bill Bonner
NORMANDY, FRANCE – "The trip on the ferry passed agreeably. The sea was still and smooth… almost like a glass tabletop. We sailed along nicely, not noticing any motion. Arriving in France yesterday morning, we drove down to the Pays d’Auge to spend the night with friends.
“You’ve come at a bad time,” said Jean-Paul. “France is finished. Over. The country is run by criminal morons… It’s a disaster.” “I think they [he was talking about France’s political class… but his comments could easily be applied in America as well] just want to control everything. They don’t want us to go anywhere or do anything. Everything is either prohibited or compulsory. And they think they can make up for the loss of revenue with money from Brussels [from the European Central Bank]."
Dead Industry: “And this ‘Sanitary Pass’ is the worst yet. It’s scheduled to go into effect in September. You’ll need to show the pass to do anything. And if you don’t want to be vaccinated… or just don’t want to get the pass… you’ll be completely isolated. In France, tourism is a major industry. It’s important, and not just for the money. It’s part of what we are… what we do. But tourism is dead.”
Jean-Paul owns a hotel in Paris. “The hotel has been closed now for 18 months. That’s a whole year and a half of revenue that is gone forever. People say ‘You can make it up later.’ But that’s crazy. I only have so many rooms. There’s no way to make up lost revenue. At best, I’ll be able to go back to earning a normal amount of revenue. But I’ll never get back what was lost. And the hotel is going to stay closed until next April. There’s no point in opening now. The Americans aren’t coming."
“I’m lucky. I’ve owned the hotel for many years. I don’t owe money on it. I can just hunker down. A lot of the old hotels in Paris are like that. But anyone who bought a hotel recently… or owes money on it… he’s dead. Broke. Same for the restaurants. There are thousands of restaurants in Paris. They depend on tourists. Without tourists, they have no business. Those who have been around for a long time can afford just to close the doors. But the young guys… who had to borrow money… or pay rent… they’re in big trouble. The government gives them money now… But how long will that last?"
Scam: “I’m glad I’m retiring… I just don’t want to deal with it anymore. I hate the face masks. And, you know, it all just seems like a scam. I got the coronavirus last year. I’ve got high blood pressure and diabetes. I’m 65. And I’m overweight. But it just felt like the flu. My wife had it, too, and didn’t even know she had it. And look, tuberculosis, malaria, auto accidents – they kill millions of people every year… and they’re all preventable. But nobody says we should stop everything because of them.”
Jean-Paul gave a weary, gallic shrug. He lives well in the Normandy countryside, but worries about how his children and grandchildren will make out. “I know I complain about everything… but the real problems haven’t even begun. Just wait until all this money-printing catches up to us. I’m old enough to remember the ‘old franc’ when I was a child. Then, the new franc. And then, the euro. That’ll go away, too. But I don’t know if I’ll still be around to see it.”
Rebound: Meanwhile… back in the USA… MarketWatch announces with great relief: "Dow ends up more than 500 points, recovers from slump Monday. S&P index sees largest one day percentage gain since March 26, 2021.
Explaining what had gone wrong on Monday was Art Hogan, a “chief market strategist” at B. Riley National: "Markets have a way, particularly in the middle of the summer, to price in the worst-case scenario pretty quickly."
Hmmm… Does Mr. Hogan really think a 725-point Dow selloff was the worst-case scenario? By our reckoning, we would need to sell off 10,000 points to get stock prices back to a “normal” price range. In a crash, 15,000 or 20,000 Dow points might disappear.
Tomorrow’s Trouble: But investors must have realized that there is no way the Federal Reserve will permit a genuine selloff. Not if it can help it. So, at least for now, tomorrow’s trouble is still today’s fun. Delta variant? Don’t worry about it. Debt? Who cares? Inflation? Hey… it’s just “supply chain disruptions.”
High stock prices are no virtue. And keeping them inflated is no great achievement; it merely puts off the day on which they are properly priced. But a selloff would end the fun, wouldn’t it? And isn’t that the one and only purpose of Fed policy today – to delay the inevitable reckoning? To inflate now… and die later… and laissez les bons temps rouler in the meantime?
Party On: And here, we turn to economist Ken Rogoff for an explanation of why even higher inflation rates should not stop the party: "Because the US Treasury and the Fed stepped in so quickly and proactively, there were actually fewer corporate bankruptcies in 2020 than in 2019."
Mr. Rogoff notes that bankruptcies usually rise during a recession. Last year was the worst economic setback for the U.S. economy since the Great Depression. Businesses that couldn’t pay their way should have closed up shop. Instead, they got money from the feds… and are still losing money!
Whoopee! In an honest economy, stocks go up and down… and businesses come and go. Some people get lucky. Some get smart. And all get more or less what they deserve. In today’s economy, the zombies get infusions… households get stimmy checks… the stock market gets pumped up… real losses are papered over with fake money… and the party continues… until it ends."
"The Fed Says the Recession is Over - This is a Depression"
Full screen recommended.
Dan, I Allegedly AM 7/21/21:
"The Fed Says the Recession is Over - This is a Depression"
"The Fed has just issued a report saying that the recession is over. It was the shortest recorded session in the history of our country. No one believes this. This is a depression and I’m going to prove it to you."
Gregory Mannarino, AM 7/21/21: "The FEAR Trade Remains On! Its ALL A Total FReaK sHOw!"
Gregory Mannarino, AM 7/21/21:
"The FEAR Trade Remains On! Its ALL A Total FReaK sHOw!"
"America’s Frontline Doctors File Federal Lawsuit to Curtail Emergency Use of Covid Vaccines"
"America’s Frontline Doctors File Federal Lawsuit
to Curtail Emergency Use of Covid Vaccines"
by Paul Craig Roberts
Excerpt: "It appears that my reading of the Covid information is correct. The official reported cases and deaths are a scam, and the vaccine is more dangerous than the virus. America’s Frontline Doctors have filed a federal lawsuit to stop the emergency use of untested and unapproved vaccines on three groups of people. We will see if Big Pharma owns the courts too.
We have been lied to by medical bureaucrats such as Fauci at NIH and Rochelle Walensky at CDC, by the medical establishment, by ignorant politicians, and of course by the scum presstitutes and social media. The question is: did they lie out of ignorance or on purpose? Are they concerned with our health or with Big Pharma’s profits, government control over people, and perhaps darker agendas such as population reduction and the WEF’s “Great Reset”?
As Americans are so gullible and insouciant, these mass murderers are likely to get away with their monstrous crimes.
One of the doctors involved with the lawsuit stated; “My child will not be the subject of an experiment. What kind of monsters are we allowing to control us? Perfectly healthy children have developed heart inflammation, brain bleeding and even died! I have had enough. I am not sacrificing my child so a pharmaceutical company can experiment on her. This madness has to stop.”
Full article is here:
○
Related:
For Covid facts divergent from the official lies see:
○
An absolute MUST read:
Tuesday, July 20, 2021
"A Look to the Heavens"
“The Cat's Eye Nebula (NGC 6543) is one of the best known planetary nebulae in the sky. Its more familiar outlines are seen in the brighter central region of the nebula in this impressive wide-angle view. But the composite image combines many short and long exposures to also reveal an extremely faint outer halo. At an estimated distance of 3,000 light-years, the faint outer halo is over 5 light-years across.
Planetary nebulae have long been appreciated as a final phase in the life of a sun-like star. More recently, some planetary nebulae are found to have halos like this one, likely formed of material shrugged off during earlier episodes in the star's evolution. While the planetary nebula phase is thought to last for around 10,000 years, astronomers estimate the age of the outer filamentary portions of this halo to be 50,000 to 90,000 years. Visible on the left, some 50 million light-years beyond the watchful planetary nebula, lies spiral galaxy NGC 6552.”
"Many Great Deeds..."
"For many great deeds are accomplished in times of squalid struggle. There is a kind of stubborn, unrecognized courage which in the lowest depths tenaciously resists the pressures of necessity and ill-doing; there are noble and obscure triumphs observed by no one, unacclaimed by any fanfare. Hardship, loneliness, and penury are a battlefield which has its own heroes, sometimes greater than those lauded in history. Strong and rare characters are thus created; poverty nearly always a foster-mother, may become a true mother, distress may be the nursemaid of pride, and misfortune the milk that nourishes great spirits."
- Victor Hugo
Gerald Celente, "Trends Journal: Delta Dystopia, Government Control and Dehumanized"
Gerald Celente, "Trends Journal:
Delta Dystopia, Government Control and Dehumanized"
"'The Trends Journal' is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over hype and propaganda to help subscribers prepare for What’s Next in the increasingly turbulent times ahead.""Bank Failures/Bank Runs Coming; Debt Defaults Ahead; Economy On A Dead End Road; Recession Is Over"
Jeremiah Babe, PM 7/20/21:
"Bank Failures/Bank Runs Coming; Debt Defaults Ahead;
Economy On A Dead End Road; Recession Is Over"
"Are We On The Verge Of A Massive Stock Market Crash?"
Full screen recommended.
"Are We On The Verge Of A Massive Stock Market Crash?"
by Epic Economist
"The biggest stock market bubble of all time is ready to burst and this week's events are signaling that a major correction has already started. We have seen stock prices go on meteoric rises over the past year, even stocks of bankrupt companies and meme stocks have seen prices skyrocketing by 300% in what some may call the craziest bull market run in history. Now, we can definitely say we are witnessing the largest stock market bubble ever, but this bubble will end the way most bubbles do, which means an epic burst is coming and the recent market activity can prove so. Sell-off signs have been spreading across Wall Street for weeks, and on Monday we could see an eruption of full-blown fear amongst investors and big financial institutions. The Dow Jones Industrial Average fell by 725 points, marking the worst day for the index since last October. But that alone isn't an indication of a crisis, what is, though, is the fact that a series of individual stocks have started to plunge to bear market territory as veteran investors seem to have become spooked with the growing risks.
Many are pointing to the rapid spread of the Delta variant as the factor responsible for triggering a market plunge yesterday. That's precisely why investors are concerned. Any worsening of the health crisis threatens to crash the high prices stocks have gained over the past year. Investors are expecting the economy to fully recover and forecasting a record growth in economic activity, even though many market veterans have been warning that these rosy expectations may lead to bitter disappointment.
In any case, now that the market has started to go down, some experts are warning that the crash could be quite substantial. For instance, one Morgan Stanley expert believes we could see a “correction” of 10 to 20 percent. “The market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth,” Morgan Stanley chief U.S. equity strategist Mike Wilson said in a note Monday. “Market breadth has been deteriorating for months and is just another confirmation of the mid-cycle transition, in our view. It usually ends with a material 10-20% index level correction.”
Actually, if that is the worst-case scenario we would be quite lucky. The truth is that we might be headed to a much sharper correction because the mood on Wall Street has dramatically shifted in recent days. According to the CNN Fear & Greed Index, the market is now sitting at 17, which represents “extreme fear”, while the VIX has been soaring. The last time we witnessed this much fear on Wall Street, the S&P 500 was down by 40%. So that's a remarkable sign, to say the least. But while warning signs are emerging pretty much everywhere one can look, our leaders continue shrugging off predictions regarding the consequences of the current monetary policies in collapsing stocks amid rising inflation fears and economic concerns. They keep insisting that a wonderful new era of great prosperity is just ahead.
We all would love to see a massive economic boom after so much time of pain, chaos, and desperation. But sadly, it's very unlikely that things will run as smoothly as he believes. In reality, we are fast approaching some of the most difficult economic times that we have ever seen. Our politicians and policymakers cannot artificially prop markets up forever. This immense bubble is simply unsustainable and the laws of economics cannot be overlooked for much longer. We have to remember that the federal government is already 28 trillion dollars in debt, while our corporations are in the midst of the greatest debt binge of all time, and U.S. consumers continue to go into debt without any fear of the consequences. But a reckoning day always arrives and our "tomorrow" will be far more apocalyptic than most people would dare to imagine."
Gregory Mannarino, PM 7/20/21: "Market Shrugs Off Both Inflation and C(0)vid Fears"
Gregory Mannarino, PM 7/20/21:
"Market Shrugs Off Both Inflation and C(0)vid Fears,
As The Fed. Continues To Buy It All"
The Poet: Mary Oliver, “White Owl Flies Into and Out of the Field”
“White Owl Flies Into and Out of the Field”
“Coming down out of the freezing sky
with its depths of light,
like an angel, or a Buddha with wings,
it was beautiful, and accurate,
striking the snow and whatever was there
with a force that left the imprint
of the tips of its wings - five feet apart -
and the grabbing thrust of its feet,
and the indentation of what had been running
through the white valleys of the snow -
and then it rose, gracefully,
and flew back to the frozen marshes
to lurk there, like a little lighthouse,
in the blue shadows -
so I thought:
maybe death isn't darkness, after all,
but so much light wrapping itself around us -
as soft as feathers -
that we are instantly weary of looking, and looking,
and shut our eyes, not without amazement,
and let ourselves be carried,
as through the translucence of mica,
to the river that is without the least dapple or shadow,
that is nothing but light - scalding, aortal light -
in which we are washed and washed
out of our bones.”
- Mary Oliver
"Not Much Mental Distance..."
“A man who has blown all his options can't afford the luxury of changing his ways. He has to capitalize on whatever he has left, and he can't afford to admit - no matter how often he's reminded of it - that every day of his life takes him farther and farther down a blind alley. Very few toads in this world are Prince Charmings in disguise. Most are simply toads, and they are going to stay that way. Toads don't make laws or change any basic structures, but one or two rooty insights can work powerful changes in the way they get through life. A toad who believes he got a raw deal before he even knew who was dealing will usually be sympathetic to the mean, vindictive ignorance that colors the Hell's Angels' view of humanity. There is not much mental distance between a feeling of having been screwed and the ethic of total retaliation, or at least the random revenge that comes with outraging the public decency.”
- Hunter S. Thompson
"Unwelcome Guests"
"Unwelcome Guests"
by Bill Bonner
ON BOARD THE WB YEATS – "Something odd happened on Saturday. It’s not every day that we see naked young women frolicking in our field. But let’s back up and explain how this began. In the late afternoon, we heard a loud and unfamiliar sound – music. Awful music. Dreadful music, with the boom… boom… boom beat that makes you think there must be something wrong in the engine room. “What in the world…?” we asked each other.
Back in the Hood: We have become accustomed to the absolute calm and tranquility of rural Ireland. We hear the birds sing in the morning and the pheasants cluck in the afternoon. We hear the rustling of the leaves as the wind passes and tractors in the fields. But suddenly, we were back in the “hood” of Baltimore… with the kind of noise delinquents listen to when they are trying to imitate a good time.
At first, we assumed it must be coming from a neighboring farm. Maybe the young folks were having a party, and blasting their music so loud, it crossed the river. “Hope the parents get back soon,” we thought. Later, we realized that the party was taking place in our own field. This became apparent when we saw three women… in the distance… barely visible through the trees. We saw the flesh… and from such a distance… only the flesh. One, with her back to us, appeared to be completely sans clothes.
Illicit Shindig: But what were they doing on our property? We needed to investigate! Maybe it was a nudist gathering… or just some kids having an illicit shindig. Ireland is still under COVID-19 restrictions. Then, we heard shouting – joyful… drunken… dumb shouting.
We set out across the field to where we had seen the young women. There was a group of nearly 20 young people… the men stripped down to the waist in the 75-degree heat… the women in tiny bikinis. Some were sitting around a campfire. Others were putting up a huge tent… situated on the side of a hill. Still others stood in a circle… drinking, talking, and laughing. The partiers had come in unnoticed from an old boreen and through a gap in the stone wall.
We approached, wearing our work clothes. When they saw us, they stopped talking. We were an unwelcome guest. “What do you think you’re doing here?” we asked… not smiling at the trespassers. “Oh… Is this private property? We didn’t know,” said a young man with an earnest look.
One of the others approached menacingly, lurching, as if drunk. “Settle down, Adam,” the first interceded. “Honestly,” said a blond girl with a blue tattoo and a nose ring, “we didn’t know. We thought it was okay to camp here.” A dark-haired woman stared. “Well, it is private land. You have to go,” we said firmly.
Bad Deal: What followed was a spell of explaining, negotiating, and pleading, in which your editor – never very good at that sort of thing – ended up agreeing to let them keep their camp… on two conditions. “You turn down that music… If I hear the music from the house, I will call the Gardaà (the Irish police),” he warned them. “And make sure you clean up when you leave in the morning.” The rules in place, we went back to the house… and were quickly informed about the bad deal we had made.
We’ll come back to our little story later… First, let us check in with Wall Street…
Bad Day on Wall Street: Yesterday started badly. Stocks dropped, with the Dow down more than 900 points, before rising to end the day down 725. Commentators were quick to blame the “Delta” variant of the coronavirus, anticipating more lockdowns and face masks. It’s hard to imagine that people will put up with more COVID-19 restrictions. Those who are afraid of the virus are already vaccinated. Others have had the disease already… or don’t care about getting it. And all can see that there is little apparent connection between these public health measures and their risk of dying.
A better explanation for the price drop is that investors are beginning to realize that the economic recovery may not be as strong as they had hoped. Stocks are priced for a very prosperous world. But that world may not be what’s coming.
Smarter Than Stocks: For weeks now, while inflation has surprised to the upside, the bond market has surprised to the downside. That is, while inflation rose, bond yields fell. Yesterday, the yield on the 10-year Treasury note dipped below 1.2%… its lowest yield in five months. “Bonds are smarter than stocks,” say the old-timers. And it looks like they are right. Bonds are telling us that a period of slow growth… or a recession… is headed our way – even as consumer prices continue to rise. Stagflation is what they called it in the 1970s. Get ready for it.
Decent People: Back at home on Saturday… “You’re letting 20 young people you don’t know… some of whom are already drunk… camp on your land, in violation of the COVID-19 restrictions? Don’t you think something might go wrong?” “What could go wrong?” “One of the neighbors could complain… or call the GardaÃ. They’d want to know why you allowed this illegal party. “Or who knows what they might get up to… half-naked women… drunk men? A fight? An accident?” This was the “bond” side of the household speaking, if you know what we mean.
“They seemed like decent people,” we replied lamely. “I didn’t want to ruin their party.” “Decent people do not trespass on other people’s property.” As it turned out, they were decent enough. They turned down the music. And by 11 a.m. on Sunday… they were gone. The campfire was still smoking, but otherwise, they left little trace."
"Are We On The Verge Of A Massive Stock Market Crash?"
"Are We On The Verge Of A Massive Stock Market Crash?"
by Michael Snyder
"Is time finally running out for “the bubble to end all bubbles”? Over the past year, we have seen stock prices rise to levels that are completely and utterly absurd, and many have pointed out that we are currently in the largest stock market bubble in the entire history of our nation. Of course this bubble will end the way that all of our other stock market bubbles eventually ended, and recent market activity has a lot of people wondering if the time for that is drawing near. Signs of trouble have been percolating on Wall Street for weeks, and on Monday we finally witnessed an eruption of full-blown fear. The Dow Jones Industrial Average was down 725 points, and that represented the worst day for the index since last October. But one really bad day is not a crisis, and even though many individual stocks have already plunged into bear market territory, we have a long, long way to go before people start using the word “crash”. In fact, I don’t think that anyone should even think of using the word “crash” until the Dow drops below 30,000.
But without a doubt, a crash is inevitably coming. Whether it happens this month, next month or next year, stock prices will plummet from these ridiculously inflated levels. As for the plunge that happened on Monday, many are blaming it on fears about the “Delta variant”… “It’s a bit of an overreaction, but when you have a market that’s at record highs, that’s had the kind of run we’ve had, with virtually no pullback, it becomes extremely vulnerable to any sort of bad news,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “It was just a matter of what that tipping point was, and it seems we finally reached that this morning” with worries about the delta variant."
To me, there are other issues that are of much greater concern, but apparently this is what is spooking investors this week. According to CNBC, the number of newly confirmed COVID cases per week has more than doubled over the past month… "Covid cases have rebounded in the U.S. this month, with the delta variant spreading among the unvaccinated. The U.S. is averaging nearly 26,000 new cases a day in the last seven days through Sunday, up from a seven-day average of around 11,000 cases a day a month ago, according to CDC data. Cases were already flaring up around the world because of the delta variant."
Now that the market has started to fall, some experts are warning that the drop could be quite substantial. For example, one Morgan Stanley strategist believes that we could eventually see a “correction” of 10 to 20 percent… “The market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth,” Morgan Stanley chief U.S. equity strategist Mike Wilson said in a note Monday. “Market breadth has been deteriorating for months and is just another confirmation of the mid-cycle transition, in our view. It usually ends with a material (10-20%) index level correction.”
Actually, if that is the worst that happens we will be quite fortunate. In recent days, the mood on Wall Street has shifted dramatically. In fact, the CNN Fear & Greed Index is now sitting at 16 which is considered to be in the “extreme fear” range, and the VIX has been soaring.
As our friends at Zero Hedge have pointed out, the last time we witnessed this much fear on Wall Street the S&P 500 was absolutely plummeting… "With the S&P 500 around 3.5% off its record highs, we note that fear has exploded. The last time fear was this high, the S&P was down 40%!"
We shall watch and see what happens this time around. Zero Hedge has also pointed out that Goldman Sachs has been aggressively selling off billions of dollars worth of stocks recently… "What is even more remarkable is just how much Goldman has harvested so far in 2021: as shown below, having started with a $20BN equity portfolio which has enjoyed a $5BN increase in market prices, Goldman dumped a whopping $5.5 billion of its equity assets so far (excluding a modest $1.5BN in purchases) or more than a quarter of its entire portfolio as of Dec 31."
This is not normal for Goldman Sachs. In fact, you have to go all the way back to just before the financial crisis of 2008 to find another time when they did such a thing… "The last time Goldman was “aggressively” selling into a “supportive” market? Well, we have to go back all the way to 2007 and 2008 when Goldman was busy creating the very CDOs which its prop desk would then “aggressively” short."
We all remember how prophetic that particular move turned out to be… That is “interesting” to say the least. But as big financial institutions such as Goldman Sachs are dumping stocks, talking heads on television continue to assure all of us that a wonderful new era of great prosperity is just ahead. Just check out what Bill Ackman told CNBC on Monday… "Billionaire investor Bill Ackman said Monday that the spread of the delta variant doesn’t pose a significant threat to the economic reopening, and he sees interest rates rising on the back of the big comeback. “I hope what it does is that it motivates anyone who doesn’t get the vaccine to get the vaccine. I don’t think it’s going to change behavior to a great extent,” Ackman said in a interview on CNBC’s “Squawk Box.” “You are going to see a massive, my view, economic boom. … We are going to have an extremely strong economy coming in the fall.”
Wouldn’t it be nice if he was right? I would love to see a “massive” economic boom. Unfortunately, I don’t believe that is going to happen. In fact, I believe that we are rapidly approaching some of the most difficult economic times that we have ever seen. The laws of economics cannot be ignored forever. The federal government is now 28 trillion dollars in debt, we are in the midst of the greatest corporate debt binge of all time, and U.S. consumers continue to go into debt as if tomorrow will never arrive. But tomorrow always arrives eventually, and our “tomorrow” is going to be a day of reckoning that is going to be far more painful than most people would dare to imagine."
Gregory Mannarino, AM 7/20/21: "Important Updates: Stocks, Gold, Silver, Dollar, Crude, Crypto, Debt"
Gregory Mannarino, AM 7/20/21:
"Important Updates:
Stocks, Gold, Silver, Dollar, Crude, Crypto, Debt"
"How Breakdown Cascades Into Collapse"
"How Breakdown Cascades Into Collapse"
by Charles Hugh Smith
"Maintaining the illusion of confidence, permanence and stability serves the interests of those benefiting from the bubbles and those who prefer the safety of the herd, even as the herd thunders toward the precipice.
The misconception that collapse is an all or nothing phenomenon is common: Either the system rights itself with a bit of money-printing and rah-rah or it collapses into post-industrial ruin and gangs are battling over the last stash of canned beans.
Neither scenario considers the fragility and resilience of the socio-economic system as a whole. It is both far more fragile than the believers in the permanence of the waste is growth model grasp and more resilient than the complete collapse prognosticators grasp.
The recent relatively mild logjams in global supply chains of essentials are mere glimpses of precariously fragile delivery-supply systems. These can be understood as bottlenecks that only insiders see, or as unstable nodes through which all the economy's connections run. Put another way, the economy's as a network appears decentralized and robust, but this illusion vanishes when we consider how the entire economy rests on a few unstable nodes.
One such node is the delivery of gasoline and fuels. It's such an efficient and reliable system that 99.9% of us take it for granted: there will always be plenty of gasoline at every station, the tanks of jet fuel will always be topped off, and so on.
The 0.1% know that this system, once disrupted, would knock over dominoes all through the economy.
Hyper-efficiency and hyper-globalization has reduced the number of producers of essentials to the point that disruptions cannot be overcome with redundant sources. We see this everywhere in the global economy: a handful of plants and companies (sometimes a single source of essential components) process or manufacture essential components in much larger systems. This is how you end up with thousands of newly manufactured vehicles parked in lots awaiting one critical part that is in short supply.
Another key weakness is the entire system's reliance on debt, leverage and speculation. Few seem to understand that physical production and delivery systems can grind to a halt for financial reasons - for example, lines of credit being pulled, a counterparty to some arcane commodity swap goes under, taking the presumably solvent corporation down with it, and so on.
The more debt that's been piled up, the greater the instability of the entire system. Risk always appears low until the system destabilizes, and then all the hedges fail and risk breaks out, flooding through the entire financial system.
Leverage is great fun on the way up, as it magnifies gains. Since the Federal Reserve implicitly guarantees that "buy the dip" will generate massive gains, why not ramp up leverage ten-fold to maximize those Fed-guaranteed gains? Leverage is less fun on the way down. When the underlying collateral has shrunk to 20% of the leveraged bets being made, a 21% decline in the asset wipes out all the collateral holding up the palace of leveraged debt. The Fed can print money but it can't create collateral, nor can it make insolvent entities solvent. All the Fed can do is increase the debt and leverage, which is not the solution, it's the problem.
Speculation is also inherently unstable, as the euphoric herd, once startled, turns in panic and stampeded in fear. Markets which appeared liquid - i.e., sellers could count on someone buying as many millions of shares as they desired to sell - become illiquid, as buyers vanish like mist in Death Valley. With buyers gone, prices plummet to levels the herd reckoned "impossible" just days before.
The Fed's entire strategy in the 21st century has been to inflate asset bubbles that generate the illusion of wealth - the so-called wealth effect which is presumed to inspire voracious borrowing and spending.
Unfortunately for the Fed, most of the gains flowed to the top 0.1%, and an economy based on a handful of billionaires buying super-yachts and spaceships is a line of dominoes awaiting the inevitable "accident." So there are two systemic problems with relying on asset bubbles to generate "wealth": 1) since 90% of the assets are owned by a thin slice of the populace, bubbles increase destabilizing inequality, and 2) bubbles are intrinsically unstable. So the U.S. economy, dependent on the Fed for the "juice" of monetary stimulus, is now dependent on incredibly unstable bubbles in assets, debt and leverage, bubbles which have generated extremes of wealth/income inequality that are destabilizing the social and political orders.
As the three charts below illustrate, the fragility and instability are well hidden until it's too late: bubbles, debt, leverage, budgets and revenues can only click higher because the system breaks down if there is any sustained decline (the rising wedge model of breakdown). Once the subsystems fail, there's no putting the eggshell back together.
The second chart depicts how buffers thin beneath the surface, masking the systemic fragility. The loss of redundancy, the decay of maintenance, the loss of experienced workers - all of these are hidden from public view until the system breaks down.
The third chart tracks the S-curve of expansion, confidence, complacency, delusion and collapse followed by human systems, from nations to empires to corporations: as the buffers thin and the rising wedge reaches an apex of vulnerability, the leadership evinces a delusional confidence in the permanence and stability of increasingly fragile, unstable systems.
Maintaining the illusion of confidence, permanence and stability serves the interests of those benefiting from the bubbles and those who prefer the safety of the herd, even as the herd thunders toward the precipice. This is how breakdowns in apparently stable subsystems triggers the fall of dominoes throughout the larger system, leading to a collapse that was widely viewed as "impossible." Such is the power of complacency and delusion."
Monday, July 19, 2021
"More Banks Closing Credit Lines - Economy in Chaos"
Full screen recommended.
Dan, IAllegedly, PM 7/19/21:
"More Banks Closing Credit Lines - Economy in Chaos"
"First it was Wells Fargo bank, now there are more banks added to the list that are closing credit lines. Our Economy is in complete chaos as the stock market teeters on complete collapse."
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