0% interest rates – The Burning Platform

NO ONE GETS OUT OF HERE ALIVE

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.” – Strauss & Howe – The Fourth Turning

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As we wander through the fog of history in the making, unsure who is lying and who is telling the truth, seemingly blind to what comes next, I look to previous Fourth Turnings for a map of what might materialize during the 2^nd half of this current Fourth Turning. After a tumultuous, harrowing inception to this Crisis in 2008/2009, we have been told all is well and are in the midst of an eleven-year economic expansion, with the stock market hitting all-time highs.

History seemed to stop and we’ve been treading water for over a decade. Outwardly, the establishment has convinced the masses, through propaganda and money printing, the world has returned to normal and the future is bright. I haven’t bought into this provable falsehood. Looking back to the Great Depression, we can get some perspective on our current position historically.

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A BIASED 2017 FORECAST (PART ONE)

“The idea that the future is unpredictable is undermined every day by the ease with which the past is explained.” – Daniel Kahneman, Thinking, Fast and Slow

A couple weeks ago I was lucky enough to see a live one hour interview with Michael Lewis at the Annenberg Center about his new book The Undoing Project. Everyone attending the lecture received a complimentary copy of the book. Being a huge fan of Lewis after reading Liar’s Poker, Boomerang, The Big Short, Flash Boys, and Moneyball, I was interested to hear about his new project. This was a completely new direction from his financial crisis books. I wasn’t sure whether it would keep my interest, but the story of Daniel Kahneman and Amos Tversky and their research into the psychology of judgement and decision making, creating a cognitive basis for common human errors that arise from heuristics and biases, was an eye opener.

In psychology, heuristics are simple, efficient rules which people often use to form judgments and make decisions. They are mental shortcuts that usually involve focusing on one aspect of a complex problem and ignoring others. These rules work well under most circumstances, but they can lead to systematic deviations from logic, probability or rational choice theory. The resulting errors are called “cognitive biases” and many different types have been documented.

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CIVIL WAR II – FOURTH TURNING INTENSIFYING (PART 2)

In Part One of this article I laid out the case against the criminal establishment and how the regeneracy is being driven by the anti-establishment sentiment sweeping across the land. This atonement Fourth Turning will de-establish decade’s worth of delusional decisions. This election has destroyed the last vestiges of trust in this fraudulent system.

This dysfunctional rigged presidential election reflects the tearing of the civic fabric at points of maximum susceptibility. As a country we have neglected, denied, or delayed necessary action on a plethora of vital issues threatening our long term viability as a nation. The deferral of difficult painful decisions has been a ploy of the ruling class, allowing them to further siphon the wealth of a dying empire, while maintaining control over the masses through laws, regulations, taxes, surveillance, intimidation, technology bread and circuses, and mainstream media propaganda.

This is a country truly divided, much along the lines of the first Civil War. The divisions aren’t just along political party lines, but race, education, geography, gender, age, class, religion and ability to think critically. The presidential polls (IBD) reveal many of these divisions clearly:

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IS GOOD NEWS BAD NEWS?

Both surveys from the Bureau of Lies and Scams showed a huge increase in jobs during October. That’s funny, because Challenger, Grey and Christmas keeps showing lay-off announcements up 40% over last year. Of course, the good old Birth/Death adjustment added 165,000 phantom jobs into the calculation, so I’m sure its accurate. Everyone knows there are new businesses opening every day, hiring hundreds of thousands of high functioning millennials. Supposedly the single biggest driver of new jobs was among those with a high school education or less. I’m sure those are high paying jobs.

The Federal Reserve had already decided they needed to raise rates by .25% before year end to bolster their non-existent credibility. What better than an employment report that was 50% higher than the highest Wall Street bank estimate. What a coincidence. I wonder how the soaring USD will impact the profits of our international conglomerates? Oops.

So the market sold off in August and September because the economy was clearly weakening. Then the market rallied in October because a weak economy meant the Fed would never raise rates again. Now this employment report supposedly clinches a Fed rate hike in December. Now for all the housing bulls, the 10 Year Treasury yield has spiked from 1.9% at the beginning of October to 2.3% as of this morning. And that’s before the Fed even raises rates. Can this weakening economy, with global trade going into the toilet, withstand interest rates going up by even 1%? Not a chance.

Let the spin begin. The CNBC bimbos and boobs have been using the storyline of bad economic news is good for the stock market. Now they have to pivot 180 degrees and propagandize that good economic news is actually good for the stock market. This entire bubble economy has been solely dependent upon 0% interest rates for the last six years. We’ll see how it does now.

October Jobs Soar To 271K, Smash Expectations, Unemployment Rate 5.0%, Hourly Earnings Spike

Submitted by Tyler Durden on 11/06/2015 08:33 -0500

If there was any doubt if the Fed would hike rates in December, it is gone now: October payrolls soared by 271K, smashing not only consensus of 184K, but the highest expected print. This was the highest monthly print since December 2014 when the gain was 329K and pushed the YTD average monthly gain from 199K to 206K.

The unemployment rate dropped from 5.1% to 5.0%, the lowest since April 2008, and most importantly, the average hourly earnings rose from 0.2% to 0.4%, the highest hourly earnings jump since 2009!

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REAL ESTATE DEVELOPERS NEVER LEARN

Real estate developers must really have short memories. They get hit over the head with the sledgehammer of reality every few years, declare bankruptcy or beg for their drug dealer at the Fed to give them some more of the good stuff, and come back for another round of idiocy.

Total hotel revenue in the U.S. was 4.2% higher in 2013 than it was in 2007. But, over this time frame the number of new hotels has increased total hotels by 11%.

Almost 2,700 new hotels were built at the peak of the market in 2008/2009. Revenue declined, occupancy rates plunged, and revenue per room plummeted. New hotel construction collapsed by 70% in 2011 and 2012. Now here we go again.

New hotel construction doubled in 2013 and will approach record levels again in 2014. If real median household income is lower than it was in 1999 and real wages are stagnant, who is staying at all these hotels? Are the 1% really having that much fun?

The reason for the building boom in 2007 – 2009 was the easy money policies of the Federal Reserve. Hundreds of real estate developers should have gone under after 2008, but the Fed propped them up with 0% interest rates and allowing them to extend their loans and pretend they were making their loan payments.

The current Fed created easy money bubble has convinced these developers to do it all over again. I’m sure it will work out this time.