From David Stockman: Why This Sucker Is Going Down…….Again!
In a word, with a printing press. But what happened today is that Draghi showed he is out of tricks and Yellen confessed she is out of excuses.
Yes, this sucker is going down. And this time all the misguided economics professors turned central bankers in the world will be powerless to reverse the plunge.
Yawn… haven’t they been predicting collapse since 2009? It gets old after awhile. There have only been two financial crisis in America in the past 100 years: 1929 and 2008…the odds are we won’t live to see another one.
M2 velocity is sill very low and the currency in circulation hasn’t grown beyond it’s historical growth rate.
All this monetary policy can be likened to taking a bunch of money, putting in a safe, and melting the key. It hasn’t gone into the economy.
The stock market and economy is doing well because of fundamentals such as record high profits & earnings and consumer spending. Central bank policy may have helped a little, but it’s hardly the major contributing factor. If the US economy were dependent on QE, why have stocks surged 25% since May 2013 when the fed announced they were going to end QE? Discuss this further here.
Indeed, for a short period of time the brunt of the industrial production adjustment occurred in China and the EM. In effect, China and its supply chain had become the exporter/creditors of the present era.
.., but China only owns 8% of the national debt, although the media hype may make it seem like they own all of it.
Likewise, labor productivity has stalled dramatically. Since the pre-crisis peak nonfarm business productivity has grown by only 1.1% annually or at just half its historic 2.3% rate. Moreover, during the last five years productivity has grown at just 0.4% per annum.
Not sure what he’s taking about. Productivity seems in-line with historical trends:
Furthermore, it seems banks and policy makers have learned their lessons from 2008: lending standards are much more stringent. For example, the quantity of subprime mortgages have fallen considerably since 2008:
After a spike between 2003-2006, mortgage debt is back to it’s historical trend:
Federal Reserve says 29 of the nation’s 30 largest banks could survive a severe economic meltdown. Of course, some people will never be convinced, no matter what anyone says.
Also, leverage ratios for major banks are well off the 2008 highs, which could explain the good stress test results:
Entitlement spending could be problematic. Immigration control won’t stop the millions who are already citizens and producing negative economic value. That leads to the e-word, eugenics, which few have the bravery to endorse, but I see it as possibly the only long-term viable solution to the entitlement spending problem, in addition to restricting low-IQ immigration. Boosting the national IQ by just a handful of points can help remedy a multitude of problems.
We now have life, liberty, free emergency room treatment, ebt, education, section 8 housing, and the purist of happiness…for all. The government won’t allow sick people die in the streets, nor will it deny certain services. Or maybe there will be enough abundance created by technology and the productive class to take care of everyone…hard to know.
I had an exchange with Nick Land about this, and he disagrees, arguing that the Cathedral wins if there isn’t collapse.
I’m partial to not having things fall apart…it would hurt a lot of productive people to have collapse. Hurt wage earners, businesses, retirees who have savings, home owners with equity, etc. We don’t have to throw the baby out with the bathwater.
There are better ways of dealing with the Cathedral than resetting everything. As I posit in the Kaczynski post, is it worth replacing one problem with a worse one? As for solsutions, I don’t know. Collapse doesn’t guarantee the Cathedral won’t be rebuilt. I predict, possibly within the next generation, a mass realization by politicians due public pressure to address problems such as enticement spending and immigration, averting a possible crisis.
The want or desire to see crisis when the evidence doesn’t support it strikes me as wishful thinking, which is antithetical to the rationalist in me. I care about empirical evidence and data. If there have only been two major financial crisis in the past 100 years of US history, I’m going to err on the side of there not being a crisis soon. This unwavering belief in the face of empirical evidence in crisis just strikes me as another religion or superstition, but instead of selling indulgences they are selling newsletter subscriptions, bad investments, and overpriced gold.
I’m also kinda confused by Nick Land and Michael Anissimov, both who were (or still are?) involved with futurism – Accelerationism (to serve Gnon) and Singularitarianism, respectively – but now seem to be renouncing these views by seeking collapse and the end of modernity? Eschatology seems contradictory to futurism. I think in 2011-2013 or so, the idea of a ‘sci-fi NRx’ seemed cool, but since 2014 has fallen out of favor to more of a medieval style of reaction.
Nick Land discusses how NRx is Accelerationism with a flat tire being the Cathedral.
Neoreaction is Accelerationism with a flat tire. Described less figuratively, it is the recognition that the acceleration trend is historically compensated. Beside the speed machine, or industrial capitalism, there is an ever more perfectly weighted decelerator, which gradually drains techno-economic momentum into its own expansion, as it returns dynamic process to meta-stasis. Comically, the fabrication of this braking mechanism is proclaimed as progress. It is the Great Work of the Left. Neoreaction arises through naming it (without excessive affection) as the Cathedral.
So so the solution is to somehow remove or override the decelerator (re-accelerationism) instead of destroying the system, which agrees with my approach as well. The whole thing is kinda confusing, and in the past year I haven’t seen any posts in the nrx-o-sphere about accelerationism, suggesting it may have fallen out of favor.
To conclude, collapse can wait. But who knows, I will leave the window open for < 1% probability for crisis, just in case.