Thursday, November 21, 2013

An Insightful Description Of What Is Occurring On Main Street

As I have been saying would happen, the housing market bounce of the last 18 months is starting to crack.  This is a crack that I expect will widen into a big canyon, into which home sales and prices will fall.  It will be a resumption of the bear market trend in the housing market that began in mid-2005 and which needs to go a lot lower and exact a lot more pain before the excesses of the Greenspan/Bernanke/Bush/Obama era have even a chance of being cleansed and fixed.

Existing home sales for October were released yesterday.  And while the year over year headline result was announced as being a big positive, it turns out that if you dig into the actual month-to-month numbers the housing market is slowing down - quickly.  You can read my analysis of the numbers and the overall housing market here:  October Existing Home Sales

Meanwhile, as the stock market plows inexorably toward the moon and then, with a lot more QE, onto Pluto, I was discussing with a friend how QE has done nothing for the economy other than help out a few homebuilders, realtors and most of the corporate insiders who are unloading their company shares at a record pace.  In the context of chatting about the rampant systemic Government and corporate corruption, we discussed how small businesses and individuals have been left in the satanic dust created by the Government and Wall Street.  His commentary on this was too priceless not to share:
It's a horror show.  I know 2 guys in their 50's and 60's who are close to running out of money.  For younger people, generally blue collar guys are the only ones who'll talk openly and freely about reality, and they're angry. The white collar set is brainwashed into pretending that they're keeping up with the Joneses, too stupid to question if their neighbors are living an illusion propped up on credit cards. I freely tell whitey to stop watching TV or it'll finish the chemical conversion of their brains into cat food.

The real "tell" is the Kohl's parking lot (visible from McDonald's where I take coffee every day w/a friend), always brimming with minivans and hot mommy ass. Whence comes Kohl's meteoric popularity of late?  The answer lies in the high-end faux upper middle class stores like Williams-Sonoma--barren without stragglers seeking elusive bargains there.

Society's veneer is down to rice paper. After Christmas, it'll be gossamer.

So what happens when interest rates revert to reality and spike up, destroying even the ability to pretend all is well?  That's when the fun starts.

As a nation, we're a kerosene-doused tinder box awaiting a flame. No accident, this.

I strongly suspect that even the very well-to-do are hurting, fretting many a country club membership and private school tuition check.
I wasn't kidding about the cat food thing...

"Even a dog knows the difference between being tripped over and being kicked." -Oliver Wendell Holmes

Americans are being kicked to death, and do nothing but expire in the lambent glow of TV's illusion, less significant than dead dogs.


  1. CK*wirtschaftsfacts in conversation with Dr. Paul Craig Roberts

    The United States would be in the midst of a transformation process to turn into a lawless police state, while vested interests and their lobbies cannibalized the country.

  2. . Only problem with the T.V. fantasy/credit card scenario it's like coming off a heroin buzz. You get real dope sick and need a fix. When you don't have an income to support that buzz you do what you have to do. Americans are dope addicted and pretty soon that hot mommy ass you see will be selling that ass to get that fix.

  3. Not to worry. Uncle Sam's got your back. Your healthcare premiums just went down. Didn't you get the memo?

  4. Ask the Expert – Jim Sinclair (November 2013)

    SMN: An interesting point you raised there was there isn’t enough patriotism. Do you believe this is lacking in our political leadership? Do you believe they’re in it for their own interests?

    Jim: The problems that we’re in are the spending exceeding so much of income, the size of the debt, the use of quantitative easing, the continued hyper-liquidity situation which is an absolute reality. The hyper-liquidity situation is the parent of hyperinflation, has come from a lack of interest in what is best but more interest in what the various persuasions of politics have as their agenda. I don’t see anything changing that before February 7th, 2014, the next date for the go around on the debt problem.

    SMN: So what is best for them isn’t best for the American public?

    Jim: What is best for them is not best for the world.

  5. Hey, I'm the least politically correct individual in the state of Arizona, as anyone who's sat through one of my comedy sets will attest. And I'm a weekly reader of your site Dave. But if this is what passes as "insight" about how bad things are on Main Street - "whitey", "hot mommy ass", and Oliver Wendell Holmes quotes, then we're more fucked than I even realized. I'm sure those comments are funny and creative in the right context, but they seem out of place on your blog. Maybe it's my perspective, but I hold your work in high regard Dave, and that kind of insight doesn't seem worthy.

    1. It's not my quote, it's my friend's quote. And I thought - as an English from one of the best best college English Dept's in the country and as an avid fan of Hunter Thompson gonzo-style writing, I thought the prose was brilliant. I'm not sure where you see political incorrectness or racism in there.

      In fact, my friend is white and he's making a point about how idiotic the American middle class has become and how absurd it is that middle class mini-van driving MILFs go to Kohls and buy faux high end on stuff on credit cards to give the illusion that they have money. And Oliver Wendell Holmes is one of the most widely cited Supreme Court Justices in history. He is considered one of the most progressive legal minds in history. Not sure where your problem with the quote is unless it was over your head.

    2. Moreover, that commentary directly and metaphorically encapsulates succinctly and insightfully the insidious deteriioration of our country economically, politically, culturally and socially.

    3. You're right Dave, because writing about hot mommy ass and then quoting Holmes is pretty much what qualifies as brilliant prose these days, furthering your point about just how far down the societal toilet we've been flushed. In fact, next week I'll do my part to further the decline of our idiocracy...I'm going to a gallery opening in Scottsdale, and I'll wait until I'm surrounded by people and I'll fart as loud as I can. When I'm sure everyone has heard it, and they're all staring at me in silence, I'll quote Abraham Lincoln. If anyone has any problem with that, I'll point them toward this blog and say "brilliant prose".

    4. Would Mom I'd Like to Fuck--MILF--have made you feel better?

      And "whitey"? Please. There's nothing remotely offensive there--unless you're a prude who never leaves his all-white suburb because he's mired behind a keyboard pontificating about his moral superiority.

      Your Scottsdale gambit is weak and pathetic. Sorry. I was at the opening of the Clyfford Still museum in Denver when a drunk woman pissed all over herself and one of the pieces. Now that was truly moving.

      Why don't you man up and try that?

      A loud fart? Yawn.

    5. I wonder if I know the woman...I missed that opening but I saw the Van Gogh exhibition the Denver Museum of Art put together that was original and unique. It was the best exhibition I've ever seen and I lived in NYC for 15 years, used to hit the Chicago Art Institute when I was in B-school there and have been to the major museums in Paris and all around Italy. It spanned his first known attempts at drawing all the way to his most famous pieces and included a lot of stuff from his "Japanese" stage. I was incredible.

      Never saw anyone take a wiz on anything but I remember some pranksters moved around the pieces of a funky Warhol exhibit that had like beach chairs and sand involved at the Allen Art Museum at Oberlin College and it was hilarious. I knew the guys who did it.

    6. And....Cheyenne completely missed the point as well. As in...the point is in Bangor, Maine and she's wandering down La Cienega Boulevard. But I like her use of the word pontificating....I've got $20 that says she had to Google it to make sure she was spelling it right. Let's try this one more time for the small-minded amongst us:

      This is Dave's blog. Dave can post anything he wants, and he can allow others to post anything he finds suitable. It's his blog, so it's completely up to him. What Dave has to decide is whether he wants his blog to be about fucking, and piss, and shit, and Cheyenne crashing a Bukkake party without goggles, or about how Cheyenne's mom went through 9 months of nausea, bloating, tight clothing, discomfort and vomiting to bring her into the world, and after all that sacrifice all she ended up with was 200 pounds of pure idiot. Not only is that not offensive, but it's funny, it's engaging, and "it's a Tour de Force of blog entertainment - 2 Thumbs up exclaimed Roger Roeper and Cheyenne's dad!"...

      Or whether his blog should be about something besides Cheyenne deciding that a particular art gallery in Denver is too boring so she opts to peel away her size 24 clothes, defecate in her hands, and rub it all over herself while dancing to her own Karaoke version of "Livin' La Vida Fecal".

      That's all I'm saying...this is Dave's little restaurant, and Dave has to write out the menu everyday. Only he knows what best represents the kind of restaurant he wants to run. And if it's a slop house serving salmonella-laced PBJ sandwiches on moldy bread that looks more like Soilent Green, hey, I'm not saying I wouldn't still stop by for a death-sandwich fix every once in a while.

  6. As the criminal collusion between corporate financial interests and the agencies of a tyrannical government is exposed, the battle lines are being drawn in bold relief in a financial and investment community which is becoming radically polarized.

    As the currency is debased and what remaining standards of ethical behavior and financial accountability give way to rampant corruption, cronyism,and favoritism, those of us who still believe in equitable business constructs and legitimate financial practices find ourselves attacked, pilloried, and under assault by those who align themselves with the criminal cartels controlling and manipulating the free markets by coercion, extortion, and outright theft.

    DOW 16000 and a hopelessly distorted precious metals sector go hand in hand with underreported record unemployment and chronic homelessness,endemic poverty, government statistical fabrication,rigged electoral processes and bribed,suborned and blackmailed public officialdom.

    Anyone who supposes anything other than a catastrophic social outcome from this state of affairs is either apathetic or indifferent to obvious facts, delusional, or worse, actually engaged in the prevailing institutional malfeasance.which is most evident at the highest levels of so called governance.

    In this deplorable situation, one of the few positives is the presence of like minded individuals courageous enough to speak out against the lies and mendacity which are afflicting this society and nation like the plague. Whoever your friend is has spoken to this and with much eloquence and good humor. Thanks, god's speed and keep up the good fight!

  7. Watch out with what Jim Sinclair says.
    He comes from a history of central bankers , through his family.
    Hidden agenda could be a reality here.

    1. You know, occasionally someone on some blog posts that comment. I would love to see some proof. I have yet to this day been able to come up with - nor has anyone been able to send me - any proof he's connected to the Rothschilds, Sy Goldman, blah blah blah.

      Show me the money. Show me proof. The ONLY reason I published this comment is because I want to you back up your assertion with proof, because if you can't, it will demonstrate how baseless and retarded that accusation is.

    2. With all due respect, I personally find Sinclair a little suspect myself, mostly through his close association with and huge multi-million dollar bankroll of Satya Sai Baba, his personal guru, a dubious personage who has been connected with global pedophile rings.

      Allegations of financial impropriety leveled against his Tanzanian Royalty Exploration to which he has strenuously offered defense, along with accusations of strong arm expropriation of local gold mines, a pretty standard practice in Africa after all, have met with equally forceful rebuttals by Sinclair.

      His call of the top in Gold in 1979, his subsequent liquidation and exit of the market to the tune of an $11 million return just before the crash smacks more of insider information than the mere call of a savvy trader. Meanwhile the Saudis were suckered into massive Au purchases, purportedly entire boxcars full right before the crash, loosing billions.

      More to the point, his recent strident and erroneous calls for exponential rises in Au, in which he is certainly not alone, seem unwarranted and irresponsible and have cost a lot of investors dearly. In this unfounded exuberance he was either just incompetent and flat out wrong or worse as anonymous suggests, in covert collusion with the cartel. Neither option is especially savory.

      On top of all that Sinclair is tireless in his extravagant and fulsome praise of the tyrannical regime of the PRC. Like so many other high rolling international players, he finds the Chicom business model with its peculiar hybrid of marxist entrepreneurship very attractive. Frankly the guy seems a little unstable. Like a lot of people with way too much money power and influence.

  8. Dave..

    PBOC Says No Longer in China’s Interest to Increase Reserves

    1. Thanks! I missed that. Probably means they're really going to ramp up gold buying. A higher yuan lets them buy even more gold at a relatively low price.

      Also means they're closer to pulling the plug on the dollar.

  9. "Fixed-income investors remain transfixed on Treasury yields, trying to second guess when the Federal Reserve might look to rein in its bond-buying program. But strategists have told CNBC there may be another threat on the horizon with China starting to fall out of love with U.S. debt.

    Yi Gang, a deputy governor at the People's Bank of China (PBoC), said in a speech at Tsinghua University on Wednesday that it's no longer in China's favor to accumulate foreign-exchange reserves, according to reports by both Bloomberg and the Wall Street Journal.

    "The appreciation of the yuan since 2005 has been primarily driven by market forces and overall this has helped improve the welfare of the Chinese people," he said, but gave no time frame for the change in strategy.

    Analysts see this as the PBoC hinting that it will let its currency fluctuate, without intervention, thus negating the need for holding large reserves of the dollar. And if the dollar is no longer needed, then it could look to curb its purchases of dollar-denominated assets like U.S. Treasurys."

    When the world starts dumping our money, things are going to get very ugly!


    "The problems of the US cannot be solved within the country’s existing framework, due to a dilemma: if the economy recovers, the Fed will end its program of support, but the markets will panic, as seen back in September, which will end the come-back...

    More generally, if an ounce of real US growth showed its face, the mountains of dollars printed by the Fed and exported to emerging countries would return to enjoy the windfall, causing high inflation and nipping the recovery in the bud. These “oscillations” between hope and despair will continue until the crisis is confronted with the tools of the world after, or until a shock causes a catastrophe. For it is not the QE that will save the economy, since its best result is the sort of artificial life that supports zombie economies and inflated asset bubbles."

  11. Distraction from exercising the mind. We ditched T.V. two years ago ( watched very little then ) TV is mostly .... crap programming , world view political and corporate propaganda non stop .
    What goes in ultimately comes out . Our next two generations are slaves to hand held devices , more time each day to dumb down .

  12. Dave , Perhaps I should have inserted "Let the buyer beware" regarding my Jim Sinclair comments ~ Thanks for correcting that !
    Fyi > my data derived came from Chris Duane / Don't Tread On Me

  13. The gold bug contingent will come to the same white wet towel hanging from their dicks as Hugh Hendry shorts. What we want to achive first is for you guys to chuck in that towel and believe me you will. The idiots that need to first are the likes of you, turd - he is close bc he just writes drivel now. Then its got to be Maguire, the not whistle blower, then Hathaway, and Jim Sinclair too. HUGH HENDRY is a JIM SINCLAIR arrogant kind of guy. Lastly the likes of JPM GOLDMAN AND WESTERN CENTRAL BANKS ARE THE MOST POWERFUL. There isn't anyone who can go against us. China is a buyer but they want to buy cheap and have gold for years.Any of you little guys just buy Gold at the fringes, not the centre - two different prices. Dream on.


    This is the article I was referring to. Give up. Chuck in the towel.