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Off The Cuff: Rage Against The Machine

The electorate is beginning to reject the establishment
Friday, March 4, 2016, 2:27 AM

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • Rage Against The Machine
    • A populist revolt may be brewing
  • Stagnation vs Recession?
    • Will the true economy please show itself?
  • Payroll Bingo
    • What will the number be?
  • Losing Control
    • Why outsiders are more popular than expected
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Why I’m Now Short The US Equity Markets

After 7 long years of waiting...
Tuesday, March 1, 2016, 12:55 AM

In the interests of full disclosure and of keeping you abreast of my personal investment actions, I entered a short position on Friday for the first time since 2009. Yes, it’s been seven years.

The equity markets have been all but bulletproof for 6 years, but I think that phase has ended and we’re in for a rough ride from here on out.  At least until stocks fall far enough for the central banks to have another go at attempting to print up prosperity.

First, I think that the stock rally of late is overdone and there’s more downside to come.  I have a whole host of supporting reasons based on credit markets and global trade, but we’ll get... » Read more

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Off The Cuff: Widowmaker Markets

Even the insiders can't make a buck these days
Sunday, February 28, 2016, 3:24 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • Widowmaker Markets
    • Even the hedge funds can't make a buck now
  • End Of The Policy Road
    • There's no policy that can fix the banks at this point
  • The War On Cash
    • A clear sign of increasing financial repression
  • The Fall Of Europe
    • The EU is failing before our eyes
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Triggers Of The Coming Social Disorder

What to expect as the central State is increasingly resisted
Friday, February 26, 2016, 11:48 AM

Executive Summary

  • Why revolutions start in the middle-class
  • How social disorder and new narratives are critical ingredients to regime change
  • How the central State will react to being challenged
  • Why the inevitable outcome of class conflict is an increasingly unstable social/economic order

If you have not yet read How The Seeds Of Revolution Take Root, available free to all readers, please click here to read it first.

In Part 1, we surveyed three conventional models the sources of social disorder/revolution and focused on the under-appreciated model of suppressed social mobility.

In this Part 2, we examine the other half of this dynamic: the systemic misalignment of aspirations and opportunities.

The Wellspring of Revolution: An Aspirational Middle Class

One of the great ironies of Marx's historical blueprint for revolution is that revolutionary leaders don't arise from the peasantry or proletariat as he anticipated but from a middle class with aspirations and expectations that are unfulfilled by the status quo--in other words, a society with low social mobility.

Marx was born into a wealthy middle-class family in Trier in the Prussian Rhineland (now Germany), and studied at the universities of Bonn and Berlin at a time when only the elite attended university.

Lenin was born into a wealthy middle-class family in Simbirsk, Russia. His interest in revolutionary socialist politics was sparked by his brother's execution in 1887. He was expelled from Kazan State University for participating in protests.

Mao Zedong was the son of a wealthy farmer in Shaoshan, Hunan. Influenced by the events of the Xinhai Revolution of 1911 and May Fourth Movement of 1919, Mao converted to Marxism–Leninism while working at Peking University.

The building blocks of revolution are visible in each case: a middle-class upbringing of aspirations and higher education, and a grave injustice or movement aimed at rectifying social/economic/political injustice that acts as a trigger for revolutionary fervor and commitment.

The dynamic of revolution is coiled around the psychology of... » Read more

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Off The Cuff: The Coming Capital Controls

Dan Amerman lists the many ways we will get fleeced
Friday, February 19, 2016, 5:52 PM

In this week's Off The Cuff podcast, Chris and Daniel Amerman discuss:

  • The Wide Extent Of Central Bank Intervention
    • And the resulting Franken""markets""
  • The Coming Era Of Capital Controls
    • The war on our money is just getting started
  • Don't Underestimate The Incompetence Of Our Leaders
    • Central banks are more stupid than evil
  • Political Risk To The Markets Is Greater Than We Realize
    • It's the trigger everyone is discounting
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Off The Cuff: Time To Pay For Our Sins

Over-financialization is finally catching up with us
Tuesday, February 16, 2016, 8:09 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • The Sins Of Over-Financialization
    • We're finally having to pay the price we've been deferring
  • The Energy Sector Is A Time-Bomb
    • One that has just detonated
  • GDP Is Going To Drop Hard From Here
    • Not an 'if'; but a 'when'. And a 'how much?'
  • A Crash Is In Our Future
    • And that good, believe it or not
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ALERT: Markets In Breakdown

Time to take emergency funds out of the banking system
Thursday, February 11, 2016, 1:47 PM

This is a formal ALERT.

We issue those very sparingly here at Peak Prosperity. We only issue them when world events have gotten to the point that we are personally taking new actions to shore up our preparations.

2016 is fast proving that the tranquility the world has enjoyed from 2010 up to now has been false; that the problems we face were merely temporarily papered-over by central planners, not resolved. That tranquility is now over. Prepare for more turbulent times. » Read more

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The Breakdown Has Begun

A wave of defaults is about to crash over us
Tuesday, February 9, 2016, 12:26 AM

Executive Summary

  • Oil patch defaults will be the trigger that burns down the markets
  • Defaults will ripple widely across many industries and sectors
  • The banks are suddenly turning on their central bank brethren
  • How to protect yourself from the coming era of wealth destruction

If you have not yet read The Return Of Crisis, available free to all readers, please click here to read it first.

Oil Troubles

The financial sector may be suffering through a bad time, but the oil sector is experiencing something far worse. While overall demand for petroleum is flat or down nearly everywhere, every producer is pumping like mad either to achieve a geopolitical agenda (as with Saudi Arabia and Russia) or to simply survive.

This chart of the price of WTIC oil also sports a pretty convincing head and shoulders formation, a common warning of “lower prices dead ahead”:

It looks like the $30 mark is the area to keep a close eye on, as that represents one possible ‘neckline’ to the H&S formation drawn above.  If that fails, look out below. Expect that area to be defended pretty vigorously by those institutions long oil.

I'm anticipating quite a skirmish over the $30 mark. But ultimately, I believe oil prices have further to fall. I think this because the economic news is dismal – no growth, only contraction right now and that’s going to hit demand – and also because the US has too much of the stuff to store. And because the next... » Read more

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Off The Cuff: A Serious, Serious Mess

The service sector rapidly weakens
Friday, February 5, 2016, 12:39 PM

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • Oil And Stock Prices
    • Correlated at 0.9 right now
  • "A Serious, Serious Mess"
    • The service sector quickly weakens
  • Bank Losses
    • Need to be taken, but whom will get stuck with them?
  • Gold's Shine
    • It's relative performance for 2016 has been very good
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Our Tone Deaf Elites Risk The Ruin Of Us All

They'll burn the world before sacrificing their privilege
Monday, February 1, 2016, 8:56 PM

The 'little people' all over the globe are beginning to stir and let their resentments be heard.

Yet the central planners and their entitled elite brethren are responding with confusion, and sometimes a deep callousness that knifes through the air. “Let them eat cake!” some almost say.

Inter-class enmity isn't remotely avoidable at this point.  » Read more