4 replies to this topic

[stocks]

The Casino Is In For A Rude Awakening

The Bloomberg Commodity index is a slow motion screen shot depicting the massive intrusion of worldwide central bankers into the global economic and financial system. Their unprecedented money printing rampage took the aggregate balance sheet of the world’s central banks from $3 trillion to $22 trillion over the last 15 years.

The consequence was a deep and systematic falsification of financial prices on a planet-wide scale. This unprecedented monetary shock generated a double-pumped economic boom—–first in the form of an artificial debt-fueled consumption spree and then a sequel of massive malinvestment.

Now comes the deflationary aftermath. Soon there will follow a plunge in corporate profits and collapsing prices among the vastly inflated risk asset classes which surfed on these phony booms.


http://davidstockman...akening-part-i/

[stocks]

The Damage Is Done—–Something Will Have To Give

The gross misallocations that have plagued the world economy for well over four decades cannot be corrected without a cataclysmic event that will dramatically change living standards as the US realign their manufacturing and service sectors. But it cannot continue indefinitely either. Something will have to give.

Needless to say, when it does “give” it will obviously have worldwide consequences. The major exporting nations will understand that they are overexposed to manufacturing to the same extent that the US is overexposed to service sector industries. Further down the value chain commodity producers will see less demand for their produce as manufacturing powerhouses falters.


http://davidstockman...l-have-to-give/

[stocks]

The Damage Is Done—–Something Will Have To Give

The gross misallocations that have plagued the world economy for well over four decades cannot be corrected without a cataclysmic event that will dramatically change living standards as the US realign their manufacturing and service sectors. But it cannot continue indefinitely either. Something will have to give.

Imagine your doctor put you on a daily dose of oxycontin, phenobarbital and Quaaludes for six years straight. Then he suddenly cancelled your prescription.

Do you think your behavior might become a bit erratic?

This is what’s going on with the stock market. It’s trying to shake off six years of overmedication brought on by the Fed’s zero rates and liquidity injections.

The source of the problem is the Fed’s easy money policies, that’s what created the disconnect between valuations and fundamentals, that’s what sent stock prices to the moon, and that’s what inflated this ginormous stock-and-bond bubble that is just now beginning to unwind.



http://www.unz.com/m...rkets-gone-mad/

[stocks]

The Casino Is In For A Rude Awakening

The pope's visit to the US could be an ominous sign for the stock market

Three of those visits came shortly before major market downturns:

John Paul II's visit in September 1987 came just over a month before the Black Monday crash,

and his January 1999 visit was near the start of the tech bubble.

Benedict XVI's April 2008 visit coincided with the early stages of the financial crisis.


http://finance.yahoo...-205521142.html

[stocks]

The Damage Is Done—–Something Will Have To Give

The gross misallocations that have plagued the world economy for well over four decades cannot be corrected without a cataclysmic event that will dramatically change living standards as the US realign their manufacturing and service sectors. But it cannot continue indefinitely either. Something will have to give.

Clear The Decks—-The Next Super-Cycle Of Junk Debt Defaults Is Coming Soon

The regular market-clearing process of rising, peaking, and normalizing default rates did not occur in the last cycle. A massive, unprecedented intervention in the markets by the Federal Reserve stopped the default cycle in its tracks. As a result, trillions of dollars in risky debt did not enter default and were not written off.

Over the last six years, this “victory” against bankruptcy and the credit cycle has led many government leaders and their economic apologists (like Paul Krugman) to declare victory. What they won’t admit is that the lack of a debt-clearing cycle has resulted in a weak recovery, and an economy that’s still heavily burdened by unsustainable debts.

What happens next should be obvious to everyone: The big debt-clearing cycle that was “paused” in 2009 will make the next debt-clearing cycle much, much larger – by far the biggest we’ve ever seen.


http://davidstockman...is-coming-soon/