But of that day and that hour knoweth no man, no, not the angels which are in heaven, neither the Son, but the Father.

– Mark 13:32

 

La MortLa Mort, photograph of her good side.

Image credit: Thinkstock

 

Bigger Than a Bear Market

BALTIMORE – Again, not much movement in the U.S. stock market. All eyes were on U.S. politics. The Ides of March came… and yea, went… with poor Marco Rubio out of the race. Yes, it was “Goodbye, Rubio Tuesday”… leaving Donald Trump and Hillary Clinton way ahead of the pack in the race to win their parties’ nominations.

 

Good-bye Rubio Tuesday!

 

Meanwhile, a dear reader wrote in to complain that the Dow was up some 1,500 points since he acted on our gloomy view… and sold out of the market. But we hold to our opinion: This ship is sinking.

As an investor, you face two kinds of risk: the risk of missing out on gains and the risk of taking losses. It’s up to you whether you continue to bet on rising U.S. stocks. But our view is you will be glad you got out when you did.

 

DJIADow Jones Industrial Average, daily. Looks actually just about ripe again… – click to enlarge.

 

We all live under a death sentence. Markets… societies… and our very lives must follow an unstoppable pattern. We breathe in… and then we breathe out. We are born… and every mother’s son ever born from the beginning of time until today is programmed for death. Every ship ever built is destined for the bottom of the sea… or the scrap yard.

Up, down… in, out… expansion, contraction. Hey, don’t blame us! We didn’t invent it. That’s just the way it is. And since that is the way it is: Vive la mort! We don’t necessarily want it. But since it is inevitable, we will look forward to it, like a pair of new boots yearning for mud. There are times to go forward… and times to back up. There are times to buy. And there are times to refrain from embracing stocks. This is one of those times.

The Fed has stood pat on rates since December. But the Japanese, the Chinese, and the Europeans have continued to try to goose up their economies with increasingly crackpot monetary policies. Much of the money thus created has found its way into U.S. markets… which probably explains the refusal of the Dow to go down.

 

Day of Reckoning

It could be, of course, that we are totally wrong… and that some trend is in place we don’t recognize. Stock markets are said to “discount the future.” Maybe they see something we don’t. Or maybe they are simply preparing for a more spectacular day of reckoning by drawing more mom-and-pop investors into deeper water; as always, we wait to find out.

Still, it looks as though the bull market that began in the U.S. in March 2009 is over. And the contraction is not limited to the stock market. Our economy, our society, and our body politic are all closing up… looking inward… turning their backs on the wider world. Yes, we are connecting the dots. It is not just the world of money that contracts and expands. The economy breathes, too… and so does our political world.

 

Social MoodThe changing perceptions of society, via the Socionomics Institute. Bear Markets and increasing social and political polarization are going hand in hand – click to enlarge.

 

Why is Donald J. Trump running so strongly in the Republican primaries? Why is National Front leader Marine Le Pen doing so well in France? How did Jeremy Corbyn – otherwise a nobody – become the leader of the second-largest party in Britain?

Why is world trade plunging? Why are inflation expectations running at about 1% for the next decade… despite the biggest increase in central bank balance sheets – the monetary footings of the entire system – in history? Why are growth rates in Europe, Japan, and the U.S. at their lowest levels since World War II? And why is $7 trillion of government debt now trading at sub-zero yields?

 

Warning Shot

“Economists fire warning shot on risks of negative interest rates,” reported the Financial Times in a front-page story last week.  “Japan’s negative interest backfire…” it added, again on the front page, two days later. Why?

Because we are breathing out. Borders are tightening up. Barriers are erected. The “globalism” heralded by New York Times columnist Thomas Friedman and others as a solution to all the world’s problems is giving way to “nationalism.”

The expansive EZ money world of the last 30 years is losing air. Yesterday brought news that consumer savings from the lower price of oil is NOT leading to greater consumer spending… not even in autos. Bloomberg:

 

“U.S. retail sales dropped in February and the prior month’s gain was revised to a decline, calling into question the narrative that bigger gains in consumer spending would propel economic growth at the start of 2016.

The decrease in purchases, which included auto dealers, department stores, and furniture outlets, showed Americans were salting away money saved at the gas pump amid volatile financial markets. The disappointing reading on the biggest part of the economy comes as Fed officials meet to gauge whether growth is strong enough to eventually warrant another increase in interest rates.

“We’re seeing higher rents, higher healthcare expenses, so that may be offsetting a lot of the benefit of lower gasoline prices,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida.”

 

The New Sub-Prime

While current spending slacks off, past spending continues to rattle its chains. Newsmax:

 

“Delinquencies on subprime auto debt packaged into securities reached a high not seen since October 1996, as late payments continued to worsen in February, according to Fitch Ratings.

The number of car borrowers who were more than 60 days late on their bills in February rose 11.6% from the same period a year ago, bringing the delinquency rate to 5.16%, Fitch wrote Monday in a report. During the financial crisis delinquencies peaked at 5.04%, Fitch wrote.”

 

Auto-loan-paymentsLate car loan payments are soaring – and the situation is worst in the oil producing states.

 

You’ll recall that when we left you yesterday, we promised a look at a deeper malaise. This is it. It is not just the threat of a  bear market on Wall Street. Not just a grumpy mood of the voters threatening the Establishment.

It is something bigger… deeper… something unstoppable…

More dots tomorrow…

 

Charts by: StockCharts, Socionomics Institute, CNN Money

 

Chart and image captions by PT

 

The above article originally appeared as Bigger Than a Bear Market at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

 

 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

One Response to “Death Sentence”

  • No6:

    Good read.

    I think the Bank bailouts were the obvious wake-up call for the unwashed masses. Now they feel uncomfortable, and won’t go back to sleep.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Gold - Ready to Spring Another Surprise
      Sentiment Extremes Below is an update of a number of interesting data points related to the gold market. Whether “interesting” will become “meaningful” remains to be seen, as most of gold's fundamental drivers aren't yet bullishly aligned. One must keep in mind though that gold is very sensitive with respect to anticipating future developments in market liquidity and the reaction these will elicit from central banks. Often this involves very long lead times.   Blackbeard's...
  • Modi’s Great Leap Forward
      India’s Currency Ban – Part VIII India’s Prime Minister, Narendra Modi, announced on 8th November 2016 that Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes would no longer be legal tender. Linked are Part-I, Part-II, Part-III, Part-IV, Part-V, Part-VI and Part-VII, which provide updates on the demonetization saga and how Modi is acting as a catalyst to hasten the rapid degradation of India and what remains of its institutions.   India’s Pride and Joy   Indians are...
  • Global Recession and Other Visions for 2017
      Conjuring Up Visions Today’s a day for considering new hopes, new dreams, and new hallucinations.  The New Year is here, after all.  Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad.  But what else will happen?   Image of a recently discarded vision... Image by Michael Del Mundo   Here we begin by closing our eyes and slowing our breath.  We let our mind...
  • The Great El Monte Public Pension Swindle
      Nowhere City California There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years.  There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island.  El Monte, California, is one of those places.   Advice dispensed on Interstate...
  • A Trade Deal Trump Cannot Improve
      Worst in Class BALTIMORE – People can believe whatever they want. But sooner or later, real life intervenes. We just like to see the looks on their faces when it does. By that measure, 2017 may be our best year ever. Rarely have so many people believed so many impossible things.   Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for...
  • Pope Francis Now International Monetary Guru
      Neo-Marxist Pope Francis Argues for Global Central Bank As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated.   Neo-Papist transmogrification. We highly recommend the economic thought of one of Francis' storied predecessors, John Paul II, which we have written about on previous occasions. In “A Tale of Two Popes” and...
  • Where’s the Outrage?
      Blind to Crony Socialism Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous.  The liberal press usually misrepresents this as a hypocritical “jobs for the boys” program within the capitalist class.  In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid.  Believe me.  I’ve been on both sides of this kind of dispute (except, of course, for the “failed”...
  • Trump’s Trade Catastrophe?
      “Trade Cheaters” It is worse than “voodoo economics,” says former Treasury Secretary Larry Summers. It is the “economic equivalent of creationism.” Wait a minute -  Larry Summers is wrong about almost everything. Could he be right about this?   Larry Summers, the man who is usually wrong about almost everything. As we have always argued, the economy is much safer when he sleeps, so his tendency to fall asleep on all sorts of occasions should definitely be welcomed....
  • Money Creation and the Boom-Bust Cycle
      A Difference of Opinions In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote:   I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud...
  • Silver’s Got Fundamentals - Precious Metals Supply-Demand Report
      Supply-Demand Fundamentals Improve Noticeably Last week was another short week, due to the New Year holiday. We look forward to getting back to our regularly scheduled market action.   Photo via thedailycoin.org   The prices of both metals moved up again this week. Something very noticeable is occurring in the supply and demand fundamentals. We will give an update on that, but first, here’s the graph of the metals’ prices.   Prices of gold and silver...
  • Trump’s Plan to Close the Trade Deficit with China
      Rags to Riches Jack Ma is an amiable fellow.  Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl.  At a moment of peak inspiration, he executed his first search engine request by typing in the word beer.   Jack Ma, founder and CEO of Alibaba, China's largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and...
  • Side Notes, January 14 - Red Flags Over Goldman Sachs
      Red Flags Over Goldman Sachs Just to prove that I am an even-handed insulter, here is a rant about my former employer, Goldman Sachs. The scandal at 1MDB, the Malaysian sovereign wealth fund from which it appears that billions were stolen by politicians all the way up to the Prime Minister, continues to unfold.   The main players in the 1MDB scandal. Irony alert: apparently money siphoned off from 1MDB was used to inter alia finance Martin Scorcese's movie “The Wolf of...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com