A Super Read!

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Davos's picture
Davos
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A Super Read!

 

Albert Edwards: At 500% Net Liabilities To GDP, It Is Too Late To Prevent The Collapse Of The G-7; Greece Is Irrelevant, We Are All Now Insolvent

For Greece, with on and off balance sheet liabilities at over 800%, it's game over. For the Eurozone, with the same ratio at about 500%, it is also game over. For the US, at 500%+, it is, you guessed it (sorry Joseph Stiglitz), game over, but since we have the printers, it will simply take a little longer. Following up on yesterday's popular post on prevailing delusions as captured by Albert Edwards' colleague Dylan Grice, we present Albert's latest outlook. Please don't read this if you want to keep believing there is any hope left for the (developed) world. 

But first some aeral photography from Dylan Grice, indicating just how far the US government is willing to go to get the population stoked about owning fixed (shouldn't it be called broken really?) income. With British QE over, and the country still to implement the same criminal annuitizing of 401(k)s that Uncle Sam is contempltating in order to make "Buy Bonds" a "voluntary" option one can't really decline, maybe letters on modern architecture building blocks is all that would works. As Edwards says: "I?m not sure leaving man-sized building blocks around the City of London is really going to make an awful lot of difference, but I suppose when your public sector deficit is around 13% of GDP, every little bit helps!"

On Our Own's picture
On Our Own
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Re: A Super Read!

Davos,  quick question,  I see Zero Hedge cited repeatedly,  but this article is written by Tyler Durden......  Tyler Durden is the name of a character in the movie Fight Club.   Who is the alias covering??  Is this person truly reliable?

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Davos
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Re: A Super Read!
On Our Own wrote:

Davos,  quick question,  I see Zero Hedge cited repeatedly,  but this article is written by Tyler Durden......  Tyler Durden is the name of a character in the movie Fight Club.   Who is the alias covering??  Is this person truly reliable?

I can't say who the alias covers. Yves (the Harvard blogger who I can't stand but respect a lot of her work ) has written this.

I've had an article or 2 posted over there, my correspondence with them has been a brief trade of compliments, not all of my work was accepted - I've had some mutts in the litter. I respect the site a lot. They are a lot more knowledgeable than I. I like the site because they see the slight of hand, the call it and they realize and report on insolvency. 

Many good blogs are tilted towards real estate, banking or one sector. Not all cover most aspects of the "economy". 

Take care

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Re: A Super Read!

Second that, Davos.  Pretty much everybody over at ZH writes under an alias (many of them characters from Fight Club).  Make of that what you will, and some won't dig on their snarky know-it-all tone.  But IMO they know their stuff and stick to the facts.

Viva -- Sager

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Re: A Super Read!

The take home is very, very simple: we can delude ourselves that the game can be won (it can't), or we can prepare for the imminent collapse when delusion finally fails.

Albert Edwards never disappoints! The question is what does the word imminent really mean?  My best guess, using a 4th turning timescale, is 5-8 years for the US. Anyone else have a guess?

Johnny Oxygen's picture
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Re: A Super Read!

Imminent is a future finance rapper.

SagerXX's picture
SagerXX
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Re: A Super Read!
JAG wrote:

The take home is very, very simple: we can delude ourselves that the game can be won (it can't), or we can prepare for the imminent collapse when delusion finally fails.

Albert Edwards never disappoints! The question is what does the word imminent really mean?  My best guess, using a 4th turning timescale, is 5-8 years for the US. Anyone else have a guess?

The Fourth Turning allows that the (roughly) 80-year cycle varies in length (and in certain extraordinary cases, parts of the cycle get skipped [e.g. they interpret the Civil War cycle as having no Third Turning]), so I wouldn't want to use it as a strict ruler.

Having said that, I guess I'm more pessimistic than you, JAG my man.  I'd call it 2-4 years.  

Having said *that*, I'll also say that I'm starting to give more credence to the Learned Commentators whose shtick translates as "Yeah, the system's totally screwed, so its gonna go down -- but it'll show surprising resilience and the collapse will take longer than you might think."  Y'know, Benny Bananas and his helicopter-flyin' SuperFriends could keep the plates up in the air for some time.  (But I also suspect this type of thinking might be a fine fine example of me looping back into Bargaining...<grin>)

Having said *that*, we could have some Black Swan drop by next week and I'll be kicking myself for not buying my next chunk o'PMs today (my day off).

Having said THAT, my wife & I are going out for sushi tonight.  The very fact that sushi (and most seafood) will go buhbye when SHTF makes each sushi dinner, paradoxically, a more enjoyable experience.  We humans are a strange and complicated bunch, boyo...

Viva -- Sager

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Re: A Super Read!

Ive noticed that more comments on this site are showing that the "collapse" will take longer than people initially thought. Thats why CM says the next 20 years will be nothing like the last 20 years. No one knows when it will happen but the PTB have a ton of ammo to go through before it all goes to hell. Remember, its a fiat system so by fiat they can change the rules.

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Re: A Super Read!

Sovereign Risks & Realities nouriel roubini

http://www.cnbc.com/id/15840232?video=1411529237&play=1

Good watch IMHO. Nouriel I believe is sick of the Dr. Doom they put on him. Notice he says he is Dr. Reality LOL. CNBC tries their best to restrain his comments.

I have thought we were going down 20 years ago & even when it is becoming more obvious it still seems like they can kick the can much further down the road than one could imagine.

Look at the market today.....everything I see seems to indicate it should be in a down draft but someone keeps proping it up. Like Rick Santeli keeps saying with a big smile.....a mystery buyer LOL.

I give it til the end of 2012 LOL....

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Re: A Super Read!
SagerXX wrote:

Having said that, I guess I'm more pessimistic than you, JAG my man.  I'd call it 2-4 years.  

Sager, you might be interested in this. Neil Strauss on the start date of the 4th turning

Proviso: I don’t of course agree with everything–or maybe even most of the things–Jim Quinn says.  But I do love the passion and intensity and texture of his analysis.  He is definitely a worthy contributor.  I don’t know his age, but I guess like the rest of you he’s Boomer-Xer cusp.

On the starting date for the  Fourth Turning (Crisis) (4T), I believe Bill and I did a column on the 4T site several years ago detailing all the reasons why we thought it did not begin with  9/11.  We got some flak at the time, because there were lots of people who *wanted* it to begin then.  But to our eye, it was clearly too early.  Typically, a new turning begins after all of the living generations begin to move into their new phases of life.  In 2001, clearly that hadn’t happened yet: Boomers were not yet retiring,  Generation X (born 1961-1981) were not yet taking over any institutions as midlife leaders,  Millennial (born 1982-200?) were barely graduating high school, and so on.  We predicted that the  Third Turning (Unraveling) (3T) mood would yet have an Indian Summer… and so it did.  Keep in mind that on the “Hero clock” of the last 4T, we are still not quite due for the 4T to begin.  The ‘29 Crash happened 28 years after the first  G.I. (born 1901-1924) birth year.  We will hit that same year  for Millennials in… 2010.

All that being said, many are asking me if I think the 4T has yet started.  I’m with Mr. Cooper.  For nearly a year now, I’ve been saying that a strong case can be made that it started in 2008–with the beginning of an epic financial crash (a 60% decline in the global  Dow from peak to trough) and an extraordinary national election that may signal an enduring political realignment and that has, for the time being, put government on a sort of permanent emergency fiscal footing (with 10% of  GDP deficits that may only come down slowly if at all).  And yes thanks to 911 everyone knows that we are engaged in seemingly endless Asian wars–but now, thanks to the election, they are *bipartisan* wars… and *bipartisan* showdowns over nuts with nukes.  We’ve got plenty of moving parts.  I think one could say we’ve got sufficient or “critical” mass to call this the beginning of a 4T.  The next two or three years must be watched closely.  The crucial question, if indeed the 4T is underway, is determining when the “regeneracy” phase of the 4T will begin.

So if  2008 was the beginning of the 4th Turning, it still has 2 decades to unfold, making my 5-8 year prediction probably premature. 

Personally, I think there is a real danger in expecting things to unravel too soon. When it doesn't happen on your time scale, you naturally lose interest, which predisposes you to dismissing the signs of an unfolding crisis when it does happen. This mainly applies to financial preps, as timing is everything in the world of finance. Of course, its never too soon to become more self-reliant.

(edit: my quote got garbled)

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Johnny Oxygen
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Re: A Super Read!

As bad as things are right now with unemployement, crashing world economies and impending wars I don't see how this could keep up for another 5 years let alone 20 without getting so bad it ceases to function. I dunno. It just seems like things are happening faster than expected. Or at least thats my perception.

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Re: A Super Read!

Read the article this morning.  Truly a good read as is the article  that it preceded it late last night.  The previous article explained the psychology behind the "This time is different" drivel Chris Martenson fully discusses in Crash Course.  On today's article there was a quick exchange between two commenters that I thought captured what is happening once you look past all the smoke and mirrors.

Commentor 1:

The "game" cannot work.  The disease is socialism. The symptoms are government intervention. A government cannot run health care, social security, education and so on. Those are all bottomless pits. The bankers just found "magic" to keep the show alive so governments could be "free". Behind the scenes the actors are fighting who exactly is promising what to whom. Mistakes were made throughout. We're now just realizing that the "magic" is ending and that the systems will collapse eventually.Greece's problem is so much socialism that it will inevitably fail first. The 40 years of uber-socialism in the East Bloc were just setting the stage.

Commentor 2:

The disease is socialism. The symptoms are government intervention.

ROFL, what a crock of ignorance that statement is.

Socialism would already HAVE universal healthcare and free education through college years. Even f---ing Cuba has that s---. What we have is a CORPORATOCRACY. Where corporations are bailed out with "tax credits" and "Buyer Incentives" to have people buy s--- that they don't need to give their money to the banks and to the corporations. We have banks selling the toxic assets to the taxpayer, we have corporations firing workers, paying less and demanding more hours and harder work from their current employees or they'll get sacked.

You bitch out the banks and you claim it's SOCIALISM? You're ignorant to say the least, the corporations and banks f---ed it up and the government is trying to save this s--- and doing it in the most ignorant way because the corporations are paying the people who advise them and pay the politicians off themselves.... this is a huge shell game with corporate leaders behind the Obama and Volcker mask.... instead of listening to Fox News, pick up a f---ing book and read some history. Godd--- these ignorant claims are the worst... the disease is the idea that MONOPOLISTIC AND CORPORATE INTERVENTIONISM IN A FALSE CAPITALIST SOCIETY are the same damn thing as FREE MARKETS. They are NOT. I suggest you stop listening to the pundits and start picking up history books.

They knew this in the 70's with the movie Network but yet you ignorant shills still don't recognize the false system you preach to.

Arthur Jensen: [bellowing] You have meddled with the primal forces of nature, Mr. Beale, and I won't have it! Is that clear? You think you've merely stopped a business deal. That is not the case! The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU...WILL...ATONE!

Arthur Jensen: [calmly] Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those *are* the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that . . . perfect world . . . in which there's no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused. And I have chosen you, Mr. Beale, to preach this evangel.

 What Mr. Jensen left out is that when these great "Nations" fail.... it is the people who pay.

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