The cowardly dithering in the Eccles Building is
sucking Wall Street punters into a vortex. And it promises to
be the mother of all bubble implosions.
There is no other possible outcome
for a stock market that is trading at 24X reported earnings in the teeth of an
enormous headwinds ever accumulated.
The intensifying global deflation/recession lapping upon
these shores gets more ominous by the day. Yet that’s only the half
of it.
When you take an unvarnished look at the domestic
economy, the real recessionary skunk in the woodpile becomes
apparent. Yet the casino is falsely capitalizing earnings
as if recessions have been outlawed and the nirvana of Keynesian full-employment
has become a permanent condition, world without end.
Today’s bubble vision meme that all is well because the Fed
judges the economy to be strong enough to absorb 1% money market rates sometime
next year is just a manifestation of that permanent full employment
delusion. After all, earnings always collapse during a recession—–so implicitly
there is not one in sight as far as the eye can see.
Then again, why would anyone credit the Fed’s insight into the
future or even its grasp of the present? In its April minutes, for example, it
noted that the world financial dangers that caused it to pause in March have
now eased.
No, they haven’t. As detailed below, the only thing that changed is
that China went through another flash bubble in the commodity space that is
already done and gone.
In fact, the Fed has never, ever anticipated a
recession——even when we were in month 118 of the 1990s technology and dot-com
bubble.
Likewise, it had no clue that the housing collapse was coming
and was shocked by the September 2008 Wall Street meltdown. And
now it has had to revise sharply lower every single GDP forecast it has
made in the years since the crisis........
