Words have not yet been invented to describe the lunacy of the terminal phase of the collapse of history’s largest, most destructive fiat Ponzi scheme, on nearly all fronts. However, all such factors combined don’t compare to the other worldliness of watching everything from currencies, to financial markets, to economic data and “spin” manipulated so blatantly, and so egregiously, that even a reasonably intelligent second grader couldn’t rather easily pick up on it. I mean, just how much more ludicrous can it get than yesterday’s “March-opening” PPT rally, in which head MSM lackey Reuters published an article claiming “Wall Street gains as weak data spurs stimulus hopes” – only to change the article’s title a mere two hours later, to “Wall Street surges as data points to economic recovery?”
Yes, Wall Street – or what’s left of the government-manipulated financial markets that represent it – “surged,” taking the “Dow Jones Propaganda Average’s” latest dead-cat bounce tally to 1,400 points in three weeks, amidst the cumulatively worst economic data, domestically and overseas, since the height of the 2008 crisis. And yes, yesterday’s numbers were par for the course, starting with freefalling Chinese service and manufacturing PMIs; weaker than expected U.S. motor vehicle sales; a barely expansionary U.S. PMI manufacturing index – featuring the lowest backlog level in seven years; and the seventh straight recessionary print (below 50) for the ISM Manufacturing Index – of which, publisher “Markit” commented “the February data adds to signs of distress in the U.S. manufacturing economy.
Yes, construction spending unexpectedly rose 1.5% – but like all “better than expected” data these days, the “devil is in the details.” In this case, the entire gain in construction spending was due to non-productive, debt-generating, GOVERNMENT projects. Which in my book – and any credible economist with a pulse – does NOT “point to economic recovery.” Let alone, this morning’s ADP employment surge – when all other economic data point to the worst labor environment since 2008!
To that end, Zero Hedge perfectly encapsulated said lunacy with yesterday’s post-close headline, “worst global economic data in four years sparks stocks’ best day in six months.” Which immediately spilt over to China, where the Shanghai Exchange – albeit, following a cumulative 9% decline on Friday and Monday – rose 4% last night, directly after Moody’s downgraded its ratings outlook from “stable” to “negative.” Which, by the way, is about as strong of a euphemism as one could conjure up, given how the “Red Ponzi,” as David Stockman, is in the early stage of the most spectacular bubble collapse in global history. “Negative,” indeed!
In other words, barring hyperinflation, the latest PPT stock goosing is likely on its last legs; as at some point, the most overvalued equity markets in history – yes, more than 1929, 1987, 2000, or 2008 when considering today’s fraudulent accounting practices, all-time low earnings quality, and non-existent real growth – will be re-engaged by “Economic Mother Nature,” and dramatically routed. And don’t forget for a second that lately, Central bank pronouncements have fallen flat on their faces – like the ECB’s “not enough” rate cut in December, and the BOJ’s “emergency” NIRP announcement in January. Thus, anyone counting on the ECB on March 10th, or the Fed on March 16th, to “save the day” with dovish language and actions may be about to have a “spiritual” financial experience. Regarding the former, I might add, market expectations are “pricing in” an utterly massive expansion of the ECB’s NIRP and QE programs, following this week’s “unexpectedly” deflationary Euro Zone CPI readings. So “get to work, Mario,” in further destroying European lives; destabilizing global trade, and accelerating the suicidal currency war that will not only catalyze the collapse of the European Union, but potentially World War III.
Next up, there’s the gold Cartel – which, despite living up to my decade old manipulation mantra, “each day worse than the last” in spades, is being soundly defeated by the forces of parabolically surging global demand, vanishing above-ground inventories, and plummeting mine supply. Not to mention, available-for-sale product; as after four years of violent price suppression and collapsing currencies, today’s holders have “stronger hands” than any before them – particularly, the governments that are pick pocketing the fumes of U.S. Treasury holdings at an alarmingly rapid rate.
Last but not least, the “oil PPT’s” latest, greatest effort to stave off the collapse of the world’s largest revenue-generating business, by goosing prices higher with paper futures buying despite the most violently bearish data to date – like last night’s utterly massive, “unexpected” ten million barrel API inventory surge. I mean, WTI crude has risen from $26/bbl three weeks ago to $34/bbl this morning, on the “hype” and “rumors” of potential OPEC and non-OPEC production cuts that did NOT occur. Nor did even a “production freeze” at record high levels, for that matter. And all along, demand figures have plunged; supply has remained at record levels; and inventories have risen further. Generally speaking, not a shred of bullish news has emerged – for crude oil, or the commodity complex at large. To the contrary, the preponderance of economic data screams imminent price plunge for commodities as loudly as it screams imminent price surge for Precious Metals.
In other words, the “eye of the hurricane,” of what will be history’s most destructive financial storm has just about passed. Which is why, if you haven’t prepared for its violently destructive “back end,” you may well find yourself “up the river without a paddle.”