CRASH2: The 13 dopey assumptions of the Bubble dwellers

bubble

I didn’t post at all this morning, for myriad reasons. The US jobs data wasn’t published until 2.30pm CET, and so little of any import happens in the mornings preceding it – because all global markets are still Americentric. Also the shopping had to be done, the rubbish/recycling trip was long overdue, and I really felt it was time I went out somewhere, talked to some real people, and had a good, long think about what’s likely to happen next on several fronts.

Just to linger a little longer on this gripping opener, the price of enough food and household consumables for the next fortnight was €79 at Netto, one of the many discount supermarkets thriving at present, the economic outlook being so good an’all. That’s around £60. Not much, is it?

Netto is not and never will be Fortnum & Mason, and a lot of what it sells is processed convenience crap. The ‘store experience’ is not great: it’s untidy, badly-lit, and always looks to me like it’s been the victim of a heist the night before. The people shopping there look depressed, desperate and generally drab. But if you can cook, it represents astonishing value for money….and if you can drink, it’s a bit like robbing a half-decent wine cellar and getting clean away with it.

Returning home with every item on the shopping list ticked off, I put stuff away, cleaned out the fire, and switched on Boombust Television. It was quite a culture shock, but it did serve to remind me of the globalist Bubble from which toil and trouble will sooner or later emanate – and devastate the already tenuous existence of the Netto shopper.

On one level, the debates on Boombust are technically impenetrable, and on another an inane collection of process-jargon and euphemistic clichés. This extract from the answer of an apparently legendary talking head (whom the anchor was “thrilled” to have in the studio) serves to make the point:

“I have no problem with unsoydandee, because that also provides opportooniddy from which investors can profit once the volativverdee recedes and we return to normalidee”

It was like listening to Chance the gardener advising the President in Being There….except it was live and real. And it served to encapsulate the elephant-denying assumptions those who pitch up on Boombust simply cannot put behind them:

  • Everything is still normal
  • Volativity is misguided
  • We must have growth
  • Growth will return
  • We have rising gluts not falling demand
  • Wages will start to advance before long
  • There categorically is not a global recession
  • Employment levels have never been higher
  • All jobs are equal
  • China can and will adapt
  • America still has the only economic model that ‘works’
  • Only ‘reform’ can save the eurozone
  • Brexit would be a disaster for Britain.

While the show was on air, China slashed its military expenditure, the PBOC admitted that today’s Shanghai index had required more direct intervention to keep it steady, the former President of Brazil was arrested, Saudi Arabian oil and military costs threatened to take the régime to breaking point, a standoff between Podemos and the Socialists brought Spanish politics to deadlock, the UK output data disappointed for the third month in a row, Goldman Sachs cut its staff levels by 5%, non-performing loans in Turkey were spirally out of control, and Banca Carige SpA shares plunged 11% after the European Central Bank requested the Italian bank present a new funding plan amid a slump in deposits and deepening losses.

The non-farm US payroll data is about to be released. To be honest, as long as the analysis of reality remains this puerile, such jobs data are irrelevant. I’m off for a siesta.

Previously at The Slog: Why history holds the key to oil prices

45 thoughts on “CRASH2: The 13 dopey assumptions of the Bubble dwellers

  1. Still, look on the shiny side. Despite having again been ‘slapped’ down this morning, gold is straining at the leash.

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  2. A couple more ‘assumptions’ that seem to fit the model:

    We’re only here for your protection
    The cheque’s in the post
    I can keep this up for hours

    We can safely assume that the non-farms will also fit.

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  3. http://www.reuters.com/article/us-europe-migrants-schengen-idUSKCN0W613U

    Everything must appear to be normal while the euro clowns ‘negotiate deals’ like the link above.
    Turkey takes non qualifying migrants back in return for 85million turkey visas to flood the eu.
    Wonderful isn’t it. Will you be voting for these C*NTS in the referendum? I definitely won’t. Retirement and a quiet life at home with provisions from Netto is wonderful, but today’s youngsters won’t be able to indulge, thanks to the clowns running the world today.
    I say VOTE BORIS and get out of the Brussels madhouse.

    Liked by 1 person

  4. Can anyone put me right here ? . I recall reading that any UK exports that got shipped out of EU through Rotterdam were included in our trade with EU figures .

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  5. To complete the picture, Der Spiegel reported on the 3rd March, that the Bavarian Bankers Assoc. had recommended that its members should start storing physical cash rather than paying the ECB 0.3% per annum on their excess reserves with the ECB. I just don’t think there is enough cash do do this especially if the Euro 500 note gets the chop. Looks like we’ve accelerated the timetable to ban cash.

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  6. @lampitt
    Yes this is true. It has a name ‘the Rotterdam’ effect. If goods are unloaded at Rotterdam and shipped anywhere else it becomes an export to the EU and also counts as an EU export (not UK) to the rest of the world.

    The whole thing is designed to make the EU look better than it really is and individual countries look worse than they actually are…

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  7. Q. When is a bubble not a bubble?

    A. When it’s a bauble.

    (Old meaning: the mock symbol of office carried by a court jester, a baton terminating in a figure of Folly with cap and bells, and sometimes having a bladder fastened to the other end.)

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  8. Ricoh refers to the “Euro Clowns” – I’ve been trying to remember the words to the song – I think it goes something like this:

    Are we not rich? Are we not fair?
    Down here on the ground and Brexit up in the air
    Send in the clowns

    Isn’t Brexit bliss? Don’t they approve?
    Dave keeps tearing around and George can’t move
    But where are the clowns? Send in the clowns

    Just when EU stopped opening doors
    Finally finding migrants no one wanted were yours,
    Peter makes an entrance again, as usual with Blair

    Sure of their EU ties –
    Nobody cares

    Don’t you love a farce? Our fault, I fear
    I thought that you’d want what I want, sorry my dears
    But where are the clowns? Send in the clowns
    With project fear

    Aren’t they rich? Isn’t it queer?
    Losing the referendum so early in the year
    But where are the clowns? Send in the clowns
    Don’t bother they’re here…..

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  9. The Tory MP’s who are backing Brexit must be pretty sure of themselves surely as, if the vote goes against them then their political and probably non political careers are over, are they not? They will be cast into the wilderness, can’t believe that they haven’t thought this through and plan to come up with something spectacular at the last minute, not giving Cumalot anytime to respond effectively, they do seem to have taken one hell of a gamble on the British public voting the ‘right’ way and, generally the ‘leavers’ are not prone to gambling, they like the odds in their favour too much….

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  10. @Stephen

    Oh folly, folly, deep folly.

    Perhaps we should have a new version entitled ‘Send in the Crows’..

    (Your real surname wouldn’t be Sondheim by any chance? ;)

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  11. The tax receipts appear to show that only 70K jobs were created (Wednesday) in the month that 240K were alleged to have been created (Thursday). The figures show the US has to prevaricate at greater than 3:1 to convince people they didn’t.

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  12. @Hb Sondheim no – Sod’em more like….

    Re: feep dolly – This seems to be a metafive for thoses wanting to Ukexit:

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  13. Regarding the comments about banks and excess reserves, the whole issue is a non issue.

    Reserves are kept on hard disk drives, we don’t see convoys of 40 footers brimmed full with cash making thousands of miles of round trips each day, going from the various retail banks to ECB in Frankfurt. Sure, there might be the occasional security van topping up bank branch cash, but it’s peanuts.

    So if reserves are kept as computer bits on a server somewhere, they are just as safe being on the server of the retail bank as they are on the server of the Central bank, there is absolutely no reason for banks to park reserves at the Central bank and get a negative return on them, no reason at all.

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  14. @ Garet Jax thanks for that confirmation . Its one of those things you read and then discard thinking no can’t be right.

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  15. Meanwhile, I see Caroline Lucas, who for years was a passionate EUsceptic, is now proselytizing for the Remain camp. Does anyone know when she switched sides?

    And Schauble insists: “….that in order to maintain access to the single market in the event of Brexit, the UK would continue to have to accept the free movement of people and make a contribution to the EU budget but without a say over the rules”. Can this be merely scaremongering? Is it the case with Switzerland and Norway, for example? The EU has free trade agreements with such far-flung countries as S. Korea, Mexico and Chile, and I don’t see them being required to open their borders to all and sundry ……

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  16. Glory Days
    The whole insane idea of NIRP is to encourage banks to LEND the money to individuals and small/large businesses. Unfortunately potential borrowers have very little appetite even at low interest rates following the last financial crash. There is some interest from house builders and automotive retailers. The economies in UK and EU are propped up by ever increasing sovereign borrowing, with deficits to match. There is no growth, other than in hungry mouths to feed from the 3rd world. Witness unqualified chancellors and ballooning public sectors combined with a growing resentment to pay taxes which get wasted and not invested wisely. It won’t be very long now before the whole house of cards collapses. Nowhere is safe, everyone wants yield and is risking everything. PM’s are trending strongly and there will be a debt /derivative driven collapse never seen before.

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  17. Ricoh

    The whole insane idea of NIRP is to encourage banks to LEND the money to individuals and small/large businesses.

    I thought the whole idea was that the US government could borrow cheaply… the side effect is that Wall Street can borrow cheap cash to throw at the stockmarkets… and so prop up the US economy at the same time.

    It’s a lot more lucrative than handcuffing yourself to borrowers, business or otherwise.

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  18. @Glory Days

    The situation you refer to is best described as an ‘accounting fiction’, as in there’s no accounting for the amount of fiction in what we are asked to believe, but I suspect you already knew that. Looking for rational explanations for this sort of thing is natural but, due to the ever widening chasm between language and meaning amongst those who come up with these preposterous protocols, only likely to add to the confusion. The thinking goes something like this: if we do away with reason altogether, then nobody can accuse us of being unreasonable. It seems to be working.

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  19. KFC, the ‘eurosceptic’ Tory MPs are, I suspect, being used, so that the Tories win whichever way the vote goes. I wouldn’t be that surprised if the ‘rows’ between Johnson and Duncan Smith weren’t deliberately orchestrated from Downing Street. If these so-called eurosceptics really objected to the EU, why are they in the Conservative Party, which has always been committed to EU membership, and why are they still in Cameron’s Cabinet? The truth is, it suits both sides.

    Liked by 1 person

  20. Absolutely Hiero
    Dr Josef Goebbels was an enthusiast for the idea of propaganda overwhelming reason: “We hate the Jews and we hate the Communists, so all Jews are Communists”.

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  21. The only way to assess what Wolfgang Schauble says is to start from the obvious fact that one is dealing with a serial lying, bitter ball of bile whose metier is being a spook.

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  22. Mr Ward, the banks are not in NIRP, bondholders are but not banks, it’s an illusion.
    Even at ZIRP the banks can make a turn, all other things being equal. A 2% point spread multiplied by a very tame leverage of 10 gives solid banking profits year on year. But then they got greedy coupled with fraud leading to the problems we have seen since 1999.
    The banks can’t make a turn now because of the lack of worthy borrowers, plus they are up to their necks in shit caused by that greed and fraud.

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  23. @alexei

    Caroline Lucas has always seen Europe through the prism of her environmentalist philosophy. In 2011 she tabled an amendment to the motion for a referendum thus: “To build support for radical reform of the EU, increasing its transparency and accountability, refocusing its objectives on co-operation and environmental sustainability rather than competition and free trade, and enabling member states to exercise greater control over their own economies.” She qualified this by saying: “I support a referendum on our membership of the EU because I am pro-democracy, not because I’m anti-EU – and because I want to see a radical reform of the way Europe operates. The EU has the potential to spread peace and make our economies more sustainable, and to promote democracy and human rights, at home and throughout the world. But it must urgently change direction, away from an obsessive focus on competition and free trade and towards placing genuine co-operation and environmental sustainability at its heart.”

    Yesterday, before giving a speech at the LSE, she said: “The EU is not an abstract project born of idle philosophising in continental think tanks. The imperative to share sovereignty in Europe, and so ensure economic competition does not again spill over into conflict, was built on the blood and bones of Europeans killed in the disastrous first half of the 20th century. The EU is built on the mistakes of Europeans. It is a pragmatic response to our failure to manage the disruptive forces of nationalism and industrialisation.”

    Clearly, she feels that such great strides have been made in the last five years towards accountability, transparency, and democracy, particularly in countries like Greece, that radical reform is no longer necessary. Either that or she’s just another pusillanimous pragmatist..

    Liked by 2 people

  24. Glory Days savings and other assets held by banks only use is to calculate the leverage on them,NIRPs is just another asset storage facility, money looking for a home to make it as safe as it can be,,better than tulips,worse than precious metals and minerals,when money collapses owning anything that retains it value or loses little is advantageous and probably even allows some influence in the future policies,unless governments is totally changed and all previous is wiped away which can only really be a result of revolution then they’re buying influence on whatever changes do happen,some might say that its a good investment

    Investment isn’t investing in industry because there is only poor if any returns so tulips bubbles are the order of the day

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  25. Hiero, yes, it’s all deception. The whole world is a stage, Shakespeare’s former employees provided much of his inspiration.

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  26. John
    Following through on stuff about beavers!
    I happened on .
    belvoir letting agents:

    For a few years now: I Suspect that the Elites have been building up for their own , later day,OPERATION OVERLORD: They have form when it comes to getting away with big shite…………………They would need orgs such as this to have them put them out of sight! ……………..doing the same with the flood now taking place. They are, in my opinion, (The invaders) supplied with new western travel gear and some dosh , and to the most part , appear to be washed and in “Sunday best” clobber. …….soon deteriorate though………. when left to their own,
    devices.

    4 March 2016 at 12:10

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  27. the Oscar, greatest claim of all has to go to those, including himself, who BELIEVE that Iain Duncan S**T has been the creator of most jobs ever – especially in an economy that’s dead – he truly is wonderful – ask any disabled person

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  28. Also, this very morning, a hoarse whisperer has combined with an equine beauty in a power coupling which should trigger a mass outbreak of reverse peristalsis among all folk still in charge of their own sense of propriety.

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  29. @Stephenroi

    Turdoch is of course the premier manufacturer of blue pills for the U.S. and U.K. populace. It seems unlikely that he would not have access to them himself. (Unlike the readers here, most of whom have swallowed the red one.)

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  30. Google ‘Texas twister’ (Urban Dictionary) – be prepared to acquire more knowledge than you could possibly hope to deal with :(

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