My wife forwarded this (A Terrifying Vision
of the End Game) to me last week. It has
gone viral after all (which is the only reason a finance-o-phobe like my wife - and like most normal people outside
of geeks like you and me - would have seen it). It comes courtesy of Business
Insider, which saw fit to pump the bear case at the exact moment that fear
could not get any more palpable in US and global stocks markets.
Now Zero Hedge is
apparently still hung up on it. I generally like ZH and marvel at the shear
volume of information that these guys churn out; but come on guys, enough
already. Raoul Paul (a hedge fund manager no less; oooohhhhh)
thinks the system is going to end and a new one will rise from its ashes.
Wow, ya think?
Here is what I think; I think the American Association of Individual
Investors puked in May and remains resistant to a rally right up to this
minute. I had been looking for potential on the
S&P 500 down to 1200 or so,
but news items like the now viral End Game report, sentiment data and some technicals shaping up across many markets make me wonder
if the top of the 1260 to 1200 target was all we will get.
AAII sentiment courtesy Sentimentrader.com
Regardless, I am
expecting generally bullish themes for much of the balance of 2012. If I am
wrong, then I am wrong. The system is after all, going to end sometime
because it has been choked with unsustainable inputs from meddling and
egomaniacal monetary autocrats most intensely since the age of Inflation onDemand took hold in 2001 when a brand new
bouncing baby credit bubble began to take shape.
The credit bubble was the
funding mechanism of the mortgage and housing bubbles and Wall Street's
'leveraged products' bubble. These of course already wrecked the system. But
now the bubble has morphed and embedded itself into US Treasury bonds. And
what a bubble this is!
With seemingly limitless power to fund itself, the US can now leverage a
critically over bought T bond and relatively strong US dollar to fund
operations for a limited time period, like say into the election? It is the
age of Inflation onDemand and the T bond
says there is demand for inflation; whether this demand was cooked up by
official Treasury yield 'operations' or not.
The bear phase in the markets has done its job. Business Insider has done its
job. Zero Hedge is making sure that the last
doomsday survivor is tucked away safe and sound in his bunker and all is
aligned for some unexpected outcomes over the intermediate term.
term? Yeh, the system is going to end.