The problem with going through life expecting a "massive repudiation of debt as a dishonest system comes apart at the seams" is that every time you look at that darn S&P 500 chart, you will hallucinate yet another bugaboo hinting at you that the repudiation/apart-coming is right around the corner.
Viz this guy's chart of this morning:
Ooh scary! Price has gone up while RSI isn't as strong as at the last peak! Ooh scary! Let's go short the S&P!
Problem is this:
This already happened in April 2011 and June 2012. Both times avoided that 2008-style 50% decline that the first chart suggests is right around the corner. World didn't end.
In fact, the June 2012 dump was the one that generated that now-famous "massive repudiation of debt as a dishonest system comes apart at the seams" line:
Last year the wild card element to a bullish picture was the election year cycle and in particular, a sitting Democrat election year cycle. This year the wild card is something more powerful; the unwinding of US and global credit markets in a massive repudiation of debt by the withdrawal of its feeder, credit. In a leveraged global economic structure it is credit that fuels the machine.And so after all that, what actually happened to the world after June 2012?
It’s an ‘organic economy’ or it’s ‘organic growth’ you say? As credit continues to be withdrawn we’ll see how organic it is. Really, this is the single silliest thing I have ever seen in print in the financial blogosphere. The economy has been sprayed with myriad toxic elements to try to get it to grow. The system is mutating, and the Fed is the Monsanto of the financial world. Consumer spending is like genetically engineered corn; it’ll feed you but it is part nature and part laboratory (Read: a consumerist experiment).
Hm. Seems the world didn't end. Did pretty well after June 2012, in fact.
Um... not gold, of course.
But wait, there's more:
10-year US Treasury yields are well into breakout mode now and the Banks continue with their breakout as measured in S&P 500 units. So far so good.And so what happened to bonds after this famous "massive repudiation of debt" post of 24 June 2013?
Before ‘T2C’ takes effect however, rising interest rates (bond market declines) across the board could signal that the game is changing; and in my opinion it is changing for the better. That is because linear thinkers and followers of convention will not be able to hide in bonds this time, as if it is just as easy as ‘risk off?… buy bonds’. Lazy thinking is going to be punished.
Stock bulls should learn about the pitfalls of following convention as well, because with the funding mechanism (credit, debt… bonds) under stress, the media creation known as the Great Rotation (from bonds to stocks) is not likely to work out in the short-term.
A dishonest system is coming apart at the seams. What better environment for honest money to be taken to the woodshed for the first slaughter of its bull market?
It seems the world stopped massively repudiating debt the minute that this massive repudiation was brought into the harsh daylight of Wordpress. It's truly almost as if JP Morgan and the Lizard People are out there monitoring the shadowed edges of the blogosphere, trying to find people to torment.
So easy to control, bring to harm.
A gathering of fools, unjustified, on a mountain.
Where is the god of men and children?
He is stalking the minds of dark poor souls.