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What Comes Next

Previews of the coming reckoning
Friday, September 21, 2018, 6:55 PM

All things have a beginning, a middle and and end.

And now, more than 3,480 days into the current bull market, the longest in history, we can say with high confidence we are very close to its end.

Why?

For manifold reasons that are multiplying fast. So many, in fact, that each of the key speakers at the recent Peak Prosperity/Contra Corner Summit in New York City had difficulty finding enough time to enumerate them all during the six-hour event.

David Stockman, President Reagan's budget head and former US Congressman, focused his warnings on the overconcentration of financialized (i.e., phony) profits in the world economy, which mask the steep decline in the production of tangible (i.e., real) value.

Among his long litany of examples of the sclerosis and fraud within today's economy, he explained how so much of today's euphoric stock prices are an artifact of the cheap credit made possible by the world's central banking cartel -- enabling a massive LBO of our corporate industry.

Long story short: artificially low rates have been allowing corporate executives, for years, to buy back a huge percentage of their company's shares, enriching shareholders (most notably the execs themselves) in the immediate term, while saddling the underlying companies under tremendous leverage (1m:13s):

(Purchase the full replay video)

As long as stock prices stay high and rates stay low, no one cares; they're making too much money. But as rates rise and prices fall, these corporations will become crippled by their debt service requirements, be forced to lay off large swaths of their workforces, and quite possibly go out of business. Failures will ripple across the corporate landscape, sinking the US into prolonged recession.

As a society we'll be the poorer for it. And suffer the full brunt of the pain this collapse of malinvestment will bring.

But the fat cat execs? They'll simply retire to their mansions and enjoy their spoils.

Chris Martenson built on Stockman's evidence of the economy's vulnerability by showing how there simply won't be enough (net) energy in the coming decades to power the growth the world is counting on. To drive this point home, he explains how demand from China alone is on track to consume 100% of world oil exports by 2040 (1m:43s):

(Purchase the full replay video)

Following that, James Howard Kunstler tied it all together by warning that we -- as a society that is sacrificing our long-term potential and resilience for convenience and the quick buck -- are in great peril of inheriting the bankrupt future we deserve (2m:12s):

(Purchase the full replay video)

The trio took over an hour of "ask anything" Q&A from the audience, who primarily wanted to hear these experts' responses to How do you see all this playing out? and What steps should we be taking now?

Here's (part of) Stockman's explanation of why he predicts the Federal Reserve and other central banks will be unable to prevent the next market crash, which he sees coming soon (4m:57s):

(Purchase the full replay video)

The common theme amongst Stockman, Martenson and Kunstler? Use the precious time we have today to fully understand the trends in play, take prudent preparation in advance of the coming crisis, and develop trusted bonds within a like-minded community well-positioned to help its members through future adversity.

The above clips represent less than 10 minutes of the material covered in the 5+ hours of active presentation and discussion from last weekend's Peak Prosperity/Contra Corner NYC Summit. If you were unable to attend the Summit live, but would like to purchase the replay video of the full event, you can do so at the 'early bird' discount price of $275 by clicking here

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14 Comments

blackeagle's picture
blackeagle
Status: Silver Member (Offline)
Joined: May 16 2013
Posts: 227
broken link?

Not working: GOO.GL/WYEBEH

 

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5827
They work for me...
blackeagle wrote:

Not working: GOO.GL/WYEBEH

I just clicked every link, they all worked for me.  Which one is bothering you?

ARhillbilly's picture
ARhillbilly
Status: Member (Offline)
Joined: Feb 15 2014
Posts: 1
GOO.GL/WYEBEH Error

Pasted GOO.GL/WYEBEH into Safari browser and received this error:

404: Page not found – the page https://goo.gl/WYEBEH does not exist.

I am trying to access from Japan, so maybe some kind of international IP firewall in place?

sand_puppy's picture
sand_puppy
Status: Diamond Member (Online)
Joined: Apr 13 2011
Posts: 1980
When Police and Legal Systems Fail

This whole theme seems related to a B-grade action flick I watched last night.   Bruce Willis starred in  Death Wish,  that centered around the issue of how do we respond when the Police / Legal System is no longer able to protect our homes and families.

(This is kind of a scary topic and drives some sensitive people away from "survivalist" websites.)

A trauma surgeon (Bruce Willis) in a big Chicago hospital cares for GSW victims all day long in his work, but lives in a safe, upscale neighborhood where he has always felt safe.  His home is targeted in a home invasion and wife killed and daughter badly injured.

The police flounder with the case (and the hundreds of unsolved crimes) and are unable to make progress as gangs intimidate and people are afraid to talk.  He sees other victims of gang intimidation in his work and no protection is available to them.

As you knew he would, he eventually goes out to seeks justice and revenge himself.

A background debate sworls as the radio talk shows, mayor, police and his family debate the ethics of having citizens seeking justice on their own.  Even though they recognize the appropriateness of the revenge, that the police were not effective protecting citizens nor able to solve the crimes, and felt relief that these (very) bad guys were no longer on the street, they oppose citizen vigilantism.   "You just can't do that!"

Late in the movie, his daughter who was injured in the home invasion earlier, is back at home.  She still remains in the role of the helpless victim and has no ability to defend herself when the gang returns for revenge against Willis and his family.   Fortunately, but barely, Willis has emerged completely from his civilized restraint role, and plays the warrior with great zest (as we knew he would) saving his family and ventilating the bad guys.

How much of the warrior / policeman / judge executioner shall we keep internally and how much shall we leave to the professionals?

jasonw's picture
jasonw
Status: Diamond Member (Offline)
Joined: Sep 17 2011
Posts: 1027
Appears to be case sensitive...

Appears to be case sensitive...   http://goo.gl/WYeBEh  Working on updating the videos now.

acesovereggs's picture
acesovereggs
Status: Member (Offline)
Joined: Aug 22 2018
Posts: 15
A professional what?

"Professional what?"

Maybe I am being naive, but I don't know anybody who would react by creating additional mayhem.  Sure there will be some, but around here there are plenty of folks who can defend themselves and in my mind bad actors would sooner or later (with a bias towards sooner) be dealt with. 

I am MUCH more concerned about the reactions of the 'professionals' than I am any ordinary citizen.  For the simple reason that we already see on a daily basis what the 'professionals' are capable of in a supposedly healthy economy.  

richcabot's picture
richcabot
Status: Silver Member (Offline)
Joined: Apr 5 2011
Posts: 226
baldski's picture
baldski
Status: Member (Offline)
Joined: Oct 8 2009
Posts: 2
Death Wish

This is a remake of a Charles Bronson movie from way back that is probably on YouTube.

pat the rat's picture
pat the rat
Status: Silver Member (Offline)
Joined: Nov 1 2011
Posts: 122
virus alert

 I  just fiugure out that a virus alert is bury in the ad on top of the lowes ad.Be careful the only way out is to do a hard drive shut down. Virus Alert ! ! ! danger Will Roberson.

Snydeman's picture
Snydeman
Status: Platinum Member (Offline)
Joined: Feb 6 2013
Posts: 532
TESLA

When is Tesla's debt due to rollover? And isn't there a looming bankruptcy for SEARS heading our way this October?

Snydeman's picture
Snydeman
Status: Platinum Member (Offline)
Joined: Feb 6 2013
Posts: 532
Got it!

Summary (From Seeking Alpha)

Tesla has a $920 million convertible note due March 2019.

Tesla must have sufficient usable cash to cover the full value of the notes, plus $400 million on January 1, or else the company may face the prospect of default.

Tesla’s reported mid-August cash position suggests a significant risk of insufficient funds to avoid default.

Despite persistent production and delivery logistics issues, Tesla continues to guide for profitability in Q3 and Q4. That prospect looks extremely unlikely.

If Tesla does not raise funds, or work out a new arrangement with convertible holders, before January, it may trigger a default.

 

Sounds pretty bad.

Snydeman's picture
Snydeman
Status: Platinum Member (Offline)
Joined: Feb 6 2013
Posts: 532
This just happened...

The Securities and Exchange Commission has filed a lawsuit accusing Tesla boss Elon Musk of securities fraud.

 

Source 

 

I’m no expert, but that’s bound to muck up any Tesla attempt to secure new financing at low cost, right?

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5827
TEsla Trouble
Snydeman wrote:

The Securities and Exchange Commission has filed a lawsuit accusing Tesla boss Elon Musk of securities fraud.

Source 

I’m no expert, but that’s bound to muck up any Tesla attempt to secure new financing at low cost, right?

Yes, TSLA is going to have some additional troubles now.  They really need more financing by year end, but with the SEC seeking, among other things, to remove Elon's executive powers and functions ""investors"" may have to look at TSLA's actual ability to make both cars and money.

Those prospects are still not looking very good.

Funniest line ever is the SEC saying the Elon picked the $420 tweet target based on its weed reference and his  desire to impress a girl.  Some things never change.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5585
funding secured: a bridge too far

It appears that the line "funding secured" was a bridge too far, even for the normally pliable SEC - unless you happen to be Martha Stewart, of course.

https://en.wikipedia.org/wiki/A_Bridge_Too_Far_(book)

Wolf Richter has some pithy observations.

https://wolfstreet.com/2018/09/27/tesla-ceo-musk-gets-socked-by-the-sec/

I am, of course, still short.

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