collapse – Page 3 – The Burning Platform

WE SHALL FALL MUCH FURTHER

Guest Post by Ol’ Remus

If you want to know what collapse looks like, look around. We’re living in an ongoing collapse—civil, economic, military and moral. Everything’s political, acquiescence is mandatory, dissent is a crime . We have fallen far. We shall fall much further. Emergencies and disasters follow each other ever more closely, each more astonishing than the last. Sociopaths and madmen—the mainstream, the real lunatic fringe—have neither the capability nor the will to fix them. And so we fall. The collapse will end when we can fall no further.

Captain’s Journal – The hive is coming apart at the seems, and the only way to keep it together is harsher and harsher stability operations. Make no mistake about it. The wars for the inner city cannot be won. America is going broke and the largesse cannot continue forever. Sooner or later, the riots will expand.

The “Ferguson Effect” is everywhere now. It’s rank extortion , and violence is an accepted part of the process. When an unruly mob (wink wink) invaded the library at Yale, threatened and criminally assaulted students at their study, Yale apologize for being Yale and humbly caved to their demands, a lesson fundamentally different from what had been taught since 1701. What was unbelievable is unbelievable no more. In turn, the unbelievable will give way to the unthinkable, the unthinkable to the unimaginable. Violence works. It works because we are in collapse.

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Violence is misunderstood. There’s no such thing as senseless violence. All violence makes sense to someone. Nor is violence ever entirely random. The perp chose to be where he was, when he was. Not random. We say the victim was “in the wrong place at the wrong time,” meaning where and when the perp was. Bad luck, but not a random event. We can’t know the “when” until it’s too late, but we can recognize the “where” with some reliability. There are places it’s wrong to be, at any time. The principle is simple: when violence occurs, be somewhere else.

My personal rules assume a continent-size penal colony with armed inmates, to wit: no public place is safe, but I especially avoid cities, airports, sports venues, malls, bad neighborhoods and bars. I’m not in public places much past dark. I avoid minorities. If there are two or more of them and one of me, I’m the minority in the only way that matters. I avoid mass transit and heavy traffic, rallies and demonstrations. In short, I stay away from crowds. I’ll not be missed. When a crowd is unavoidable, I part company as soon as I can. The declared purpose for a crowd is nonbinding, its conduct volatile and its fate my fate. There are no good crowds.

As the collapse deepens my rules will be amended until they can be amended no more. Everything, including universal entropy, argues for doing this. I would happily be wrong, but I see no compelling argument for doing otherwise.

Dislocation Watch: Getting Run Over on Third Avenue

Guest Post by Pater Tenebrarum

Trouble in High Yield Bonds Begins to Spread

It has become clear now that the troubles in the oil patch and the junk bond market are beginning to spread beyond their source – just as we have always argued would eventually happen. Readers are probably aware that today was an abysmal day for “risk assets”. A variety of triggers can be discerned for this: the Chinese yuan fell to a new low for the move; the Fed’s planned rate hike is just days away; the selling in junk bonds has begun to become “disorderly”.

Photo credit: ORF

Recently we said that JNK looked like it may be close to a short term low (we essentially thought it might bounce for a few days or weeks before resuming its downtrend). We were obviously wrong. Instead it was close to what is beginning to look like some sort of mini crash wave:

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LIVING A LIE

“Above all, don’t lie to yourself. The man who lies to himself and listens to his own lie comes to a point that he cannot distinguish the truth within him, or around him, and so loses all respect for himself and for others. And having no respect he ceases to love.” – Fyodor Dostoyevsky, The Brothers Karamazov

The lies we tell ourselves are only exceeded by the lies perpetrated by those controlling the levers of our society. We’ve lost respect for ourselves and others, transforming from citizens with obligations to consumers with desires. The love of mammon has left our country a hollowed out, debt ridden shell of what it once was. When I see the data from surveys about the amount of debt being carried by people in this country and match it up with the totals reported by the Federal Reserve, I’m honestly flabbergasted that so many people choose to live a lie. By falling for the false materialistic narrative of having it all today, millions of Americans have enslaved themselves in trillions of debt. The totals are breathtaking to behold:

Total mortgage debt – $13.6 trillion ($9.9 trillion residential)

Total credit card debt – $924 billion

Total auto loan debt – $1.0 trillion

Total student loan debt – $1.3 trillion

Other consumer debt – $300 billion

With 118 million occupied households in the U.S., that comes to $145,000 per household. But, when you consider only 74 million of the households are owner occupied and approximately 26 million of those are free and clear of mortgage debt, that leaves millions of people with in excess of $200,000 in mortgage debt. Keeping up with the Joneses has taken on a new meaning as buying a 6,000 sq ft McMansion with 3% down became the standard operating procedure for a vast swath of image conscious Americans. When you are up to your eyeballs in debt, you don’t own anything. You are living a lie.

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Everyone Is Asking: “If Chinese Consumption Is Rising, Why Are Its Malls Empty?” – Here Is The Answer

Submitted by Tyler Durden on 10/26/2015 09:52 -0400

With China’s official headline GDP number printing at decade lows, the positive spin on the increasingly negative data out of China has been that this is all a part of China’s transition from an export-oriented to a consumption economy. However, there is a problem with this narrative: malls and shopping centers in China have been, and remain, increasingly empty suggesting that the narrative of the resurgent Chinese consumer – especially in the aftermath of the biggest stock market bubble burst since 2008 – is greatly exaggerated.

Case in point: Reuters asks this morning “if why are malls closing if consumption is rising?”

Specifically, it looks at the Di Mei shopping center in downtown Shanghai which it finds “a surprisingly depressing place to shop.”

The underground mall is located in one of the most shopping-mad cities in China, and yet it is run down and starved of customers.”

“Sometimes I cannot sell even one dress in a day,” said dress shop owner Ms Xu, who rents a space in Di Mei.

Rising vacancy rates and plummeting rents are increasingly common in Chinese malls and department stores, despite official data showing a sharp rebound in retail sales that helped the world’s second-largest economy beat expectations in the third quarter.

It sure makes one wonder just how credible China’s retail sales “data” are, especially since the government is far less willing to provide official commercial vacancy rates: “As growth in retail sales slows because of the country’s lower GDP growth, and in cities where mall space is abundant, vacancy rates have risen substantially,” said Moody’s analyst Marie Lam in a research note.

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Financial Collapse to Wipe Away All the Lies

Guest Post by Greg Hunter

at USAWatchdog.com

Financial analyst Rick Ackerman says the mother of all market meltdowns is a sure thing. It is just a question of when, and when it starts, it will simply implode at a stunning pace. Ackerman explains, “We’re in a situation now where any day something can happen. I think that the black swan will be something like the stock market starting down for no apparent reason. That in itself would trigger the implosion, and I think the only thing that is propping up the markets now is the mentality of . . . how bad can things be if the stock market is trading within shooting distant of all-time highs? I think the stock market is the main buttress of this enormous hoax that has been going on with easing (QE or money printing).”

Ackerman says when the end game finally crescendos, it will be stunning and quick. Ackerman contends, “It will be literally overnight. There are investors who say I’m smart and I’m nimble, and I’ll be out of this at the first sign of trouble. I think the first sign of trouble will be a little bit too late. You will wake up one morning, and something will have happened in the Asian markets that cause the U.S. markets to open way below their circuit breakers or threaten to break the dam. It could all happen overnight, and I think it will. It’s the nature of the markets.”

Ackerman says everything will shut down or be wiped out when the next crash explodes. Things like banks, brokerages and pensions can and will all go poof in a cloud of smoke. Ackerman goes on to say, “I don’t think anything will be left standing in the smoldering ruins. It’s very hard to imagine, but it is really going to be a complete disaster that is commensurate with the scope and scale of the lies we have been telling ourselves for so long. There are people who say you Chicken Little, doomsday, sky-is-falling guys almost seem to want the system to implode. I think the only way we get back to honest business is for a collapse to wipe away all the lies.”

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IGNORE THE MEDIA BULLSH*T – RETAIL IMPLOSION PROVES WE ARE IN RECESSION

Here we go again. The dying legacy media will continue to support the status quo, who provide their dwindling advertising revenue, by papering over the truth with platitudes, lies, and misinformation. I have been detailing the long slow death of retail in America for the last few years. The data and facts are unequivocal. Therefore, the establishment and their media mouthpieces need to suppress the truth.

They spin every terrible report in the most positive way possible. They blame lousy retail results on the weather. They blame them on calendar effects. They blame them on gasoline sales plunging. That one is funny, because we heard for months that retail spending would surge because people had more money in their pockets from the huge decline in gasoline prices.

September retail sales were grudgingly reported by the Census Bureau this morning and they were absolutely dreadful. This followed an atrocious August report. The MSM couldn’t blame it on snow, cold, flooding, drought, or even swarms of locusts. So they just buried the story in their small print headlines. The propaganda media machine had nothing. They continue to spew the drivel about a 5.1% unemployment rate as a reflection of a booming jobs market. If we really have a booming jobs market, we would have a booming retail sector. The stagnant retail market reveals the jobs data to be fraudulent. The 94 million people supposedly not in the job market can’t buy shit with their good looks.

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TWO OUTS IN THE BOTTOM OF THE NINTH

The housing market peaked in 2005 and proceeded to crash over the next five years, with existing home sales falling 50%, new home sales falling 75%, and national home prices falling 30%. A funny thing happened after the peak. Wall Street banks accelerated the issuance of subprime mortgages to hyper-speed. The executives of these banks knew housing had peaked, but insatiable greed consumed them as they purposely doled out billions in no-doc liar loans as a necessary ingredient in their CDOs of mass destruction.

The millions in upfront fees, along with their lack of conscience in bribing Moody’s and S&P to get AAA ratings on toxic waste, while selling the derivatives to clients and shorting them at the same time, in order to enrich executives with multi-million dollar compensation packages, overrode any thoughts of risk management, consequences, or the impact on homeowners, investors, or taxpayers. The housing boom began as a natural reaction to the Federal Reserve suppressing interest rates to, at the time, ridiculously low levels from 2001 through 2004 (child’s play compared to the last six years).

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The Decline Of Oil: Head-Fake Or New Normal?

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

When production does finally collapse, that will set up the “nobody saw this coming” ramp in the price of oil.

In May 2008 I proposed the Oil “Head-Fake” Scenario in which global recession pushes oil demand down as oil exporters pump their maximum production in a futile attempt to fund their vast welfare states and thus retain their precarious political power.

Oil: One Last Head-Fake? (May 9, 2008)

The terrible irony of the head-fake, of course, is that the exporters’ efforts to pump more oil exacerbates the oversupply, further depressing prices. As exporters receive fewer dollars for their production, they attempt to compensate by pumping even more oil. Perniciously, this suppresses prices even more, setting up a positive feedback loop which pushes prices to the point that exporters are no longer able to fund their welfare states and Elites.

Something has to give, and that something is the existing power structure in oil exporting nations.

Another factor deepens the eventual crisis triggered by drastically lower oil revenues. The majority of exporting nations under-invest in their oil production and exploration infrastructures, essentially guaranteeing declining production once the easy oil has been extracted.

This cycle of spending the fruits of current production while starving investment for the future is part of what is known as the resource curse: nations with an abundance of resources rely on the income generated by the sale of their resources which effectively stunts the development of a diverse economy and the institutions which such a diverse economy requires as a foundation.

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THEY’RE GONNA NEED A BIGGER BALANCE SHEET

Driving home from work on Friday night I found it terribly amusing listening to the “business journalists” on the local news station trying to explain the 531 point plunge in the Dow and the 1,105 point plummet from the Tuesday high. The job of these faux journalist mouthpieces for the status quo is not to report the facts, analyze the true factors underlying the market, or seek the truth. Their job is to calm the masses, keep them sedated, and paint the rosiest picture possible.

The brainless twit who reported the stock market bloodbath immediately went into the mode of counteracting the impact of what was happening. She said the market is overreacting, as the country has strong job growth, low inflation, a strongly recovering housing market, and an improving economy. The fact that everything she said was a complete and utter falsehood was exacerbated by her willful ignorance of the Fed created bubble leading to the most overvalued stock market in history. How can these people pretend to be business journalists when they haven’t got a clue about stock market valuations and just say what they are told to say?

Anyone who listens to a mainstream media pundit, talking head, or spokes bimbo deserves the reaming they are going to receive. They are paid to lie, obfuscate, spin, and propagandize on behalf of their corporate media executives, who are beholden to Wall Street bankers, mega-corporations, and the government for their advertising dollars. The mainstream media is nothing but entertainment for the masses, part of the bread and circuses designed to distract the dumbed down, iGadget addicted, ignorant masses.

The entire stock market bubble has been created and sustained by the Federal Reserve and their QE and ZIRP schemes to prop up insolvent Wall Street banks, enrich corporate executives, and produce the appearance of a recovering economy. The wealth was supposed to trickle down to the masses, but the trickle has been yellow in appearance and substance. The average American is far worse off today than they were in 2007, with the Greater Depression Part 2 underway.

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Chart Of The Day: NASDAQ 2000 And Shanghai 2015 Resemble Hand-In-Glove

The Chinese authorities are desperately attempting to keep their staock market bubble inflated. The government bought stocks last night, driving it higher by 5% in the last hour of trading. Whenever central bankers and politicians allow the free market to decide, markets go into collapse mode. They can print more fiat to prop things up for awhile, but they are only making the ultimate collapse far worse.

Ludwig von Mises’ words of wisdom still apply today:

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

Via David Stockman’s Contra Corner

Wall Street Prepares To Reap Billions From Another Main Street Wipe Out

Submitted by Tyler Durden on 07/21/2015 22:00 -0400

On Monday evening, we noted that market participants are reducing the size of their trades and turning to derivatives in order to avoid the perils associated with what are increasingly illiquid markets.

While we’ve been pounding the table on bond market liquidity for years, the rest of the world (operating on the standard 2-3 year time lag) has just begun to wake up to how thin markets have become. Now, pundits, analysts, billionaire bankers, and incorrigible corporate raiders alike are shouting from the rooftops about the pitfalls of illiquidity. The secondary market for corporate credit has received the lion’s share of the attention (for reasons we outlined yesterday) and as Carl Icahn was at pains to explain to Larry Fink last week, ETFs are a large part of the problem.

The story is simple. Shrinking dealer inventories (the result of a post-crisis regulatory regime wherein the term “prop trader” is taboo) have made it harder to transact in size without having an outsized effect on prices for corporate bonds. Meanwhile, artificially suppressed borrowing costs and the attendant hunt for yield have led to record corporate issuance and voracious investor demand. In short, the primary market is booming while the secondary market has become a veritable no man’s land. If you need an analogy, try this: the crowded theatre is getting larger and more crowded while the exit keeps getting smaller.

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Why Most of the World’s Banks Are Headed for Collapse

Guest Post by Doug Casey

You’re likely thinking that a discussion of “sound banking” will be a bit boring. Well, banking should be boring. And we’re sure officials at central banks all over the world today—many of whom have trouble sleeping—wish it were.

This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.

Modern banking emerged from the goldsmithing trade of the Middle Ages. Being a goldsmith required a working inventory of precious metal, and managing that inventory profitably required expertise in buying and selling metal and storing it securely. Those capacities segued easily into the business of lending and borrowing gold, which is to say the business of lending and borrowing money.

Most people today are only dimly aware that until the early 1930s, gold coins were used in everyday commerce by the general public. In addition, gold backed most national currencies at a fixed rate of convertibility. Banks were just another business—nothing special. They were distinguished from other enterprises only by the fact they stored, lent, and borrowed gold coins, not as a sideline but as a primary business. Bankers had become goldsmiths without the hammers.

Bank deposits, until quite recently, fell strictly into two classes, depending on the preference of the depositor and the terms offered by banks: time deposits, and demand deposits. Although the distinction between them has been lost in recent years, respecting the difference is a critical element of sound banking practice.

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