The Coming Bear Market, Zerohdge . . . There are lots of charts in this piece, but we don’t need to understand them, because their meaning is also clear in the words, as well. I think everyone needs to take a bit of time with this article in order to stay reality-based. Too many are wishfully thinking we’re about to be rescued by a Trump, who in all his so-called brilliance manages to turn the Titanic, but the reality is that no one, absolutely no one, not even the cabal with all its powers, can rescue us from our fate — except we, ourselves, when we call a halt to this insanity.
Yes, they may hope they can create a war, or continue the craziness documented in some of my posts today in order to have the time to bring the military up to par again, but I think they rest of the world isn’t going to allow the killing and murder that is their game to continue forever. Up until now, they’ve had to let the cabal continue in order to make their own preparations to bring this all to a halt.
Remember, in actuality, in fact, we do not owe anything to the Federal Reserve: We can reject all this, because ‘fraud vitiates all’, and surely it’s clear that we have been defrauded by them. Please take time to think about all this. We need not be strung up for years by any debt they may tell us we owe to them. The truth is hard and often very painful, but the truth will set us free. How many of us truly want our freedom, enough to at least investigate what I’m sharing here? ~J
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Here’s the reality everyone seems to be in complete denial about: When, not if, the next recession hits the world will have to face it with record government, corporate and consumer debt and pension funds severely underfunded. As far as markets are concerned it appears we are repeating again the cycles of the past major bubbles. Extreme high valuations, extreme high debt and absolutely no fear or concern of anything ever getting in the way. Indeed the current volatility compression is the most extreme in market history rivaling only the beginning of 2007. Now let’s deregulate the banks and unleash them back on consumers seems to be the political wind that’s blowing.
And so global markets are repeating exactly the same mistakes again. As in past bubbles folks that abandon any notion of risk look like geniuses and those that are cautious look the fool for not playing along or trying to fade the mania until they finally capitulate, usually at the wrong time. It’s a nasty psychology, but so it goes.
Yes we can claim growth if people pile into car loans, or move into record credit card debt or if governments continue to run high deficits. All of this was what was required to record paltry GDP growth in 2016. Indeed, it is record debt expansion and central bank intervention that masks the structural ghosts of technology and demographics which are at the core of the problems. And so now, after 8 years of relentless accommodation Janet Yellen was forced to admit today:
“Economic growth has been quite disappointing”
Yet markets haven’t cared about any of it so far as they are focused on the next carrot. Free money.
Last week and this week we saw markets again buying every free money promise by the new administration hook, line and sinker. I’ve been on the record stating that the fiscal realities will cause a rude awakening (Empty Promises).
As of this weekend even Goldman Sachs seems to start agreeing with my position:
“a large fiscal stimulus will be difficult to achieve in light of fiscal constraints.”
I’ve been very clear that I sense all these free money promises are marketing fantasies the reality of which will come back to haunt those that bought into the fantasy.
And I’m not alone in this assessment. Here’s Cowen & Co:
“A warning to investors sending stocks to record highs: President Donald Trump’s “phenomenal tax plan” probably won’t be so great.
That’s according to Chris Krueger, an analyst at Cowen & Co., who wrote Monday that bulls are bound to be disappointed after Trump’s hint last week that he was close to announcing a corporate tax overhaul helped send stocks to a three-day rally. Instead of a “bigly comprehensive tax policy paper,” Krueger said what’s more likely is:
“A puff piece with a lot of adjectives;” or
A vague mention of tax reform during Trump’s address to congress Feb. 28; or
An executive order directing the Treasury Department to come up with a plan.
“You should not study his policy statements (or when his staff clarify/clean-up) with Talmudic concentration,” Krueger said in a note. “Trump’s White House is non-linear and non-consistent by design.” [Red by ~J]
And what is the core of this fantasy? That tax cuts and deregulation will suddenly spur real economic growth that was withheld from the world for the past 30 years? Please. The truth is effective corporate tax rates are at the lowest levels they have ever been.
And they have declined steadily for decades. And this very decline has been accompanied by ever higher debt and ever lower real GDP growth. While lower taxes here will add to the wealth of the top 1% yet again it will not magically change the structural picture because it hasn’t in decades. continue . . .