Devastating Shale Oil Losses

Coming soon to a bank near you
Monday, October 19, 2015, 3:12 PM

Sometimes it helps to examine one narrow slice of the pie as a means to understanding the entire pie. In the case of the shale oil Ponzi scheme, we can both wrap our minds around the scale of the predicament and also answer the question of who the losses will be foisted on.

Once we’ve done that, you should be able to simply apply the same logic and learning to other sectors of the financial universe.  Learn one sub-bubble, learn them all; like a fractal foam of misadventure. » Read more


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Greece Humiliated

The Troika wants Greece to be a warning to the other PIIGS
Monday, July 13, 2015, 6:50 PM

Well, that went badly. For the Greeks in general and for Tsipras specifically. After many years and rumors and brinksmanship, and a powerful "No" referendum from the people of Greece, Tsipras managed to ‘secure’ for Greece a deal worse than any other offered to date. » Read more


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The Global Credit Market Is Now A Lit Powderkeg

And markets are totally unprepared
Friday, June 26, 2015, 11:53 AM

Although the Street seems to agonize over equity valuations and recent price volatility, as I see it the real issue is the global bond market. Why?

Globally, the value of outstanding credit instruments is three times the total value of publicly traded equities. Just which do you imagine is more important to institutional investors? » Read more



As Goes The Credit Market, So Goes The World

When confidence cracks, we'll see it there first
Friday, June 5, 2015, 10:46 AM

During the prior economic cycle of 2003-2007, one question I asked again and again was: Is the US running on a business cycle or a credit cycle?

That question was prompted by a series of data I have tracked for decades; data that tells a very important story about the character of the US economy. Specifically, that data series is the relationship of total US Credit Market Debt relative to US GDP. » Read more


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The Central Banks Are Losing Control Of The System

Evidence is multiplying
Friday, June 5, 2015, 10:46 AM

Executive Summary

  • What the NACM Index and the Atlanta GDPNow are telling us about the odds of returning to recession
  • Bond market volatility is picking up
  • Are central banks are losing their control?
  • Why monitoring credit markets will be our best indicator of the next downturn

If you have not yet read Part 1: As Goes The Credit Market, So Goes The World available free to all readers, please click here to read it first.

That indicator is the current level of the National Association of Credit Managers Index.  Although not wildly well known, the National Association of Credit Managers Index is an indicator deserving of attention and monitoring immediately ahead.

As per the National Association of Credit Management (NACM), the Credit Managers Index is a monthly survey of responses from US credit and collections professionals rating factors such as sales, credit availability, new credit applications, accounts placed on collection, etc.  The NACM tells us that numeric response levels above 50 represent an economy in expansionary mode, which means readings below 50 connote economic contraction.  For now, the index rests in territory connoting economic expansion, but the index is also sitting quite near a 6 year low.  We’ve been here before in the current cycle as the economy has moved in fits and starts in terms of the character of growth:

In a prior discussion, I mentioned the slowing in the US economy in the first quarter of 2015.  I highlighted the Atlanta Fed GDPNow model that turned out to be very correct in its assessment of Q1 US GDP.  While the Atlanta Fed was predicting a 0.1% Q1 GDP growth rate number, the Blue Chip Economists were expecting 1.4% growth.  When the 0.2% number was reported, it turns out the Atlanta Fed GDPNow model was virtually right on the mark.  As of now, the Atlanta Fed GDPNow model is predicting a... » Read more


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The Fatal Flaw Of Centrally-Issued Money

Why the world's current money regimes will fail
Thursday, April 9, 2015, 1:03 PM

Centrally issued money centralizes wealth and generates systemic inequality. This is equally true of all centrally issued currencies.  But the inequity that is intrinsic to this system is politically and financially destabilizing, and so this system is unsustainable. » Read more


Richard Duncan: The Real Risk Of A Coming Multi-Decade Global Depression

One that unwinds the past 50 years of globalization
Sunday, April 5, 2015, 11:42 AM

Richard Duncan, author of The Dollar Crisis and The New Depression: The Breakdown Of The Paper Money Economy, isn't mincing words about the risks he sees ahead for the world economy.

Essentially, he sees the past 50 years of economic prosperity fueled by globalization and easy credit in serious danger of being unwound, as the doomed monetary policies currently being pursued by the word's central banks result in a massive multi-decade depression that spans the globe. » Read more



Time To Toss The Playbook

In uncharted territory, flexibility & open thinking are key
Wednesday, February 25, 2015, 9:07 AM

Just when you thought the world could not spin much faster, global monetary events in 2015 have picked up speed. 

Buckle up. » Read more



David Stockman: The Global Economy Has Entered The Crack-Up Phase

And will be characterized by these 4 developments
Sunday, February 15, 2015, 2:42 PM

Few people understand the global economy and its (mis)management better than David Stockman -- former director of the OMB under President Reagan, former US Representative, best-selling author of The Great Deformation, and veteran financier.

David is now loudly warning that events have entered the crack-up phase, which he predicts will be defined by the following 4 developments: » Read more


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Future Shock - Crash Course Chapter 25

The unsustainable often ends abruptly
Friday, December 26, 2014, 10:24 PM

Chapter 25 of the Crash Course is now publicly available and ready for watching below.

Here at the penultimate chapter of The Crash Course, everything we've learned comes together into a single narrow range of time we'll call the twenty-teens. 

What this chapter offers is a comprehensive view of how all of our problems are actually interrelated and need to be viewed as such, or solutions will continue to elude us. » Read more