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I completely agree with Karl.

It is not often that one gets this sort of rotational warning in such a clear form, but you’re getting it now.  The same thing is true in the DOW, with IBM being the power mover there.

Beware folks.  Be very, very careful.

Though, my opinion is that we will see a run up to uncharted territory before the fall if crude doesn’t skyrocket over the summer. When you see the DJIA in the 19,000 to 22,000 range, it is literally time to head for the hills. The end result of that one will be five times what 2000 & 2008 were.


I agree with most of this.

Uncomfortably viewing the banking sector as a curse (and not a cure) for our problems, he sees the Japanese Zombie bank experience playing out which guarantees sustainable growth is not around the corner and suggests we would be far better off medium-term if bank defaults occurred and the painful medicine is taken.

I have no financial sector debt or equity exposure either.

Europe is about to go through one of those crisis’ that are usually a prelude to something horrible.

“The only two guns in town, one is only theoretical, and that is increasing the size of the EFSF to 3 trillion.  It should happen but it can’t for political reasons.  The other one, the only remaining share is the ECB.  They may have to hold their noses while they do it, and if they don’t do it, it’s the end of the euro zone.”

Just sayin’… Not talking about bad pizza either…

Greece, Italy, Spain, Portugal.

Hoping a pattern does not emerge. If it does, got preps?

Thanks for re-posting this Mike. I fear that even at my local level, not one has read or would even consider the implications of what is about to occur. Mrs. Matson and I discussed this in detail last night and I fear that even she now sees the writing on the proverbial wall with regard to this.

See below for content:

Gentlemen and ladies of American Law Enforcement,

It is going to get worse.

IF it gets better any time soon, which I doubt.

Consider first where we are.

When a president and Congress robs one set of people to enrich their cronies, when they violate the settled rule of law regarding bankruptcy to stiff secured creditors in the case of General Motors while rewarding self-anointed unsecured creditors — their political allies, the auto unions — the rest of the population cannot fail but conclude that we are no longer under the rule of law, but the rule of men, which is to say, the law of the jungle. Or, put another way, they — the “authorities” — can do anything that the citizenry can’t or won’t stop them from doing. This is the societal Catch 22 we are now in (and have been for a while) that I call “Waco Rules.”

There is another image that many of you can see in the mirror if you choose to take an honest look — that of tax collector and nanny state bully boy. Yes, we know, you didn’t make the laws, some liberal puke with a control fetish did. But when you write speeding tickets for 3 miles over the limit because you’ve been told to write “x amount” of dollar value, or when you pull people over for “seatbelt violations” at random roadblocks and then ransack their cars without probable cause, can you understand how such behavior eats away like acid on your reputation — individually and collectively — as servants of the citizenry? What part of “to protect and serve” does that represent?

Now, however, local law enforcement is looked upon by federal agents as force multipliers and willing stooges — “local yokels” in their parlance. And as a mark of how successful their campaign has been, many local law enforcement officers agree and happily lick the boots that kick them.

What will happen when we are faced, God forbid, with some dislocating national disaster — natural or man-made — that makes Katrina look like a kindergarten playground? Now, even if you intend to run off like some New Orleans policemen did, to see to the safety of their families rather than keep order in the city, you are still going to need the cooperation of the armed citizenry in your home neighborhood to protect your family.

You — ALL of you — law enforcement officers, will then need us, the armed citizenry — ALL of us willing and competent to muster — to defend public order against the tide of chaos represented by five or ten million gang members and the tens of millions of panicked unprepared refugees or opportunistic criminals left unrestrained by a breakdown.

Remember, Americans are nothing if not a practical people. We’re predisposed to help and support you. Please, take our hand when it is offered, BEFORE it is needed.

Hunger is coming.

Joe is a neat guy. I envy his location.

Starting to get a little more mainstream traction here. Jack Spirko has also been saying this for several years.

I agree. Wholeheartedly.

Malthusian crisis.

See Zerohedge link.

While the key market moving event from last Friday may have been Bernanke’s Jackson Hole speech which merely left the door open to future QE episodes, the most important event from an economic standpoint was the first GDP revision Q2, which dropped from preliminary 1.3% to a sub stall speed, in real terms, 1.0%. What is just as important is that as the following chart from Bloomberg demonstrates, the YoY change in real GDP, which is now at 1.5%, is a slam dunk indicator of recession: “Since 1948, every time the four-quarter change has fallen below 2 percent, the economy has entered a recession. It’s hard to argue against an indicator with such a long history of accuracy.” Bernanke agreed that “growth has for the most part been at rates insufficient to achieve sustained reductions in unemployment.”

Couple of things here:

Another day, another disappointing real-time indicator declines AND is below consensus estimates.  In fact, every manufacturing index for the month of August has missed expectations and signaled further weakness.  As Bernanke, the IMF, and most Wall St. economists cling to the notion of a second-half acceleration, the rest of us are witnessing a deterioration in global growth which is unprecedented.

I honestly do not know if this is the big collapse, or just another western doldrum. From some angles it looks as if the nation state archetype has finally run its course. From others, it does look like Japan in 1991. As in, we are headed for a lost decade of stagflation’esque low interest rates with increasing dotgov intervention in the markets.

I would argue (haphazardly) that western nation states don’t typically follow that kind of pattern. Western nation states tend to go on large, industrially funded killing sprees across the world for fun & profit.

Vox Day has pointed out something that for whatever reason I have ignored for years and years, and that is this:

The second world war destroyed the manufacturing base of almost every industrialized nation on the earth except America. That is what led to our prosperity throughout this century.

There are those out there that pontificate that China is waiting in the wings to take our place. I disagree as that is not a nation state as we would traditionally think of it. China is more of a conglomeration of factions that kinda, sorta have a common goal. Until they unite and better suppress some of the internal issues facing them as a tribe, they will never be a player on the world’s stage. A mercantilist bubble cannot sustain itself as a global power.

Whatever crisis is coming (it is almost upon us) will be epic.

As shown, the current three month change is the largest in the history of the model.  In other words, the collapse in real-time economic data (such as ISM, German IFO, etc.) over the past three months is the sharpest of the last two decades for which data is available.

Got popcorn?


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