Rep. Eric Swalwell (D-CA) has decided to run for president on an anti-Second Amendment platform (while exhibiting a clear lack of understanding about guns), and has reiterated his desire to imprison Americans who don’t hand over banned weapons.
Appearing on CNN‘s “State of the Union” with Jake Tapper on Sunday, Swalwell – who last year joked about nuking gun owners who refuse to give up their firearms – discussed his longstanding proposal to ban so-called ‘assault weapons.’
TAPPER: So, gun control is the central plank in your campaign.You wrote last year — quote — “We should ban possession of military- style semiautomatic assault weapons. We should buy back such weapons from all who choose to abide by the law. And we should criminally prosecute any who choose to defy it by keeping their weapons.” Criminal prosecution for keeping assault weapons. What’s the punishment for people who don’t hand in their guns? Do they go to jail?
SWALWELL: Well, Jake, they would, but I also offer an alternative, which would be to keep them at a hunting club or a shooting range. And the reason I have proposed this is because these weapons are so devastating.
Swalwell then displayed his ignorance over the difference between a ‘rifle’ and an ‘assault rifle,’ the latter of which is a term invented by the left.
“You know, keep your pistols, keep your long rifles, keep your shotguns,” said the California Democrat, who added: “I want the most dangerous weapons, these weapons of war, out of the hands of the most dangerous people.”
Anti-gun activists don’t seem to understand that ‘assault rifles’ are functionally identical to other ‘long rifles’ as pictured above; both fire exactly one bullet each time the trigger is pulled, while neither can engage in burst fire or fully automatic fire unless illegally modified.
We’re guessing he also calls magazines ‘clips.’
via ZeroHedge News http://bit.ly/2IzhTnm Tyler Durden
Last Friday, when commenting on what BofA has called a year that is “on track to be the best year in capital markets history“, we reminded readers of January 2018, when during the infamous stock market meltup and right before the Volmageddon implosion of inverse VIX ETFs when sellers of volatility saw years of accrued paper profits wiped out in seconds on February 5, 2018 and when the S&P tumbled by 10% in a couple of days, the financial press greeted readers with article such as this one.
And with the performance of the S&P in 2019 similarly euphoric, and “melting up” each and every day, with the S&P now up over 25% from its Christmas Eve low when Steven Mnuchin infamously called the Plunge Protection Team to rescue the market…
… we were wondering just what soundbite would cement the fate of the current rally and end the euphoria this time.
The answer emerged earlier today when during an appearance on CNBC,
The rally in global equities may have further to go as more money jumps back into the market, Larry Fink, the CEO of the world’s largest asset manager who is eager to grow his AUM even more, shameless talked his passive investing book and urged mom and pop to give their savings to him for safe ETF keeping, when he said that – just like in January 2018 – “we have a risk of a melt-up, not a meltdown here. Despite where the markets are in equities, we have not seen money being put to work,” echoing something we have repeatedly pointed out.
“Many people thought we were going to be in a period of rising rates. We were not and we saw huge underinvestment and people had to rush into fixed income,” Larry Fink says. “We have not seen that in equities yet” and probably for good reason as we note below.
Underscoring the paradoxical nature of what is already a melt-up, one which has been driven entirely by corporate buybacks, short covering and dealer gamma imbalances, even as institutional and retail sellers have been aggressively dumping shares, especially since as we reported, we now know that foreigners have not only sold a record amount of US stocks in the past 12 months, but have been aggressively sellers for the duration of this rally…
… Fink pointed out that “we have record amounts of money in cash. We still see outflows in retail in equities and in institutions.”
Fink, is of course, correct. The bigger issue is that this mountain of money on the sidelines has been boycotting the stock market for the past 4 months even though asset managers are desperate to catch up to the S&P due to FOMO. And, ironically, the higher the market goes, the less likely it is that it will see participation from retail or institutional investors who will instead opt to wait for the inevitable December retest before they allocate money to the market, if then. Meanwhile, as the excess cash from Trump’s tax cuts and repatriation holiday dwindles, corporate buybacks will begin to shrink, until eventually they become a trivial factor and can no longer prop up stocks.
And confirming that investors no longer trust a market where not only the Fed, but the president and the Treasury secretary are all doing their best to artificially levitate it to new all time highs, Fink noted that while investors no longer trust stocks, they are rushing into the safety of yield instead: “We’re seeing huge excitement in fixed income” but investors aren’t rushing into equities.
To justify his case for a coming melt up, Fink also pointed out another obvious feature of this rally, namely that central banks are “more dovish than ever … there is a shortage of good assets” for investors, which could ignite the melt-up in the global equity market.
Here one has just two questions: how much of Fink’s CNBC appearance was the result of Blackrock’s latest disappointing results which saw revenue drop 7% from a year ago, and also where on this chart does Larry not think that a melt up has already taken place.
Because no matter how one defines a melt up, a 25% move in three and a half months most certainly fits the definition.
And now we await for the final signal to sell which will come when Bloomberg’s Millennial writers publish the 2019 version of their infamous “The Stock Market Never Goes Down Anymore.”
via ZeroHedge News http://bit.ly/2UCBWZg Tyler Durden
On Monday a federal judge in Virginia unsealed the original 2017 affidavit and criminal complaint on which Assange’s extradition request to the US is based, offering new details including chat logs between Assange and former Army intelligence analyst Chelsea (then Bradley) Manning, which attempt to support a single count of “conspiracy to commit computer intrusion” which may or may not have succeeded.
The US alleges Assange actively sought for and encouraged Manning to crack a password to access classified information on a Defense Department network; the affidavit claims details related to this charge, for instance chat log discussions between the pair over how to crack a password, though the affidavit notes that “it remains unknown whether Manning and Assange were successful in cracking the password,” related to the conspiracy charge.
File photo via the AFP.
“Investigators have not recovered a response by Manning to Assange’s question, and there is no other evidence as to what Assange did, if anything, with respect to the password,” the document states.
However, the FBI-produced affidavit’s language throughout makes no mention of Assange acting in the way of a journalist or a publisher, but instead takes pains to paint him as conspiring to commit espionage.
The document further notes that though Manning suspected the person on the other end of the chat was Assange, ultimately “it took me four months to confirm that the person i was communicating was in fact assange.”
The affidavit describes the individual in communication with Manning “appeared to have extensive knowledge of WikiLeaks’ day-to-day operations, including knowledge of submissions of information to the organization, as well as of financial matters.”
Manning had spent seven years in prison on violations of the Espionage Act and copying and disseminating classified military field reports, before receiving a commutation from President Obama. The secret military documents and files were what put WikiLeaks on the international media map after they were released on 2010, and included sensitive information about the Iraq and Afghan wars, Guantánamo Bay operations, as well as other State Department cables.
The document uses maximal and hyped language to describe “one of the largest compromises of classified information in the history of the United States,” yet struggles to ascertain whether “illegal agreement that Assange and Manning reached” specifically led to the release of the document trove (obviously crucial for charges against Assange to hold up).
Concerning a potential extradition to the US, “probable cause” is cited to be the hundreds of messages sent between Manning and Assange on the Jabber platform. The argument is that Assange and Manning understood that it “would cause injury to the United States,” especially with US forces active on the ground in Afghanistan.
But on this point of whether the leaks did actual harm and damage to US efforts, the document is left reaching, trying to spin and insinuate a narrative that puts WikiLeaks and terrorist groups like the Taliban and al-Qaeda in cahoots.
It starts by claiming that “after the release of the Afghanistan War Reports, a member of the Taliban contacted the New York Times.”
The supposed Taliban member said, “We are studying the report… If they are US spies, then we will know how to punish them.” This strange and somewhat comical example is meant to support the notion that Assange ultimately aided America’s enemies with the leaks.
Worse, the affidavit makes Osama bin Laden — killed in a 2011 raid by US Navy Seals while living comfortably in an Abbottabad, Pakistan compound — out to be a WikiLeaks fan, given letters had been found instructing an al-Qaeda member to “gather” the publicly available material leaked by Manning.
Somehow this is meant to imply WikiLeaks in a round-about way assisted al-Qaeda’s mission. The FBI is perhaps left grasping with this “bin Laden benefited” theory given the relative flimsiness of evidence to support the original “conspiracy to commit computer intrusion” aspect on which the case originated.
The affidavit also alleged the Taliban exploited the WikiLeaks disclosures to put U.S. allies in danger, citing a New York Times article headlined, “Taliban Study WikiLeaks to Hunt Informants.” It also said the raid on Osama bin Laden’s compound in Abbottabad, Pakistan, showed that the terrorist was actively seeking information contained in the WikiLeaks disclosures and that al Qaeda was providing him with information from the leaked Afghanistan war reports. The Afghanistan war reports also contained specifics on improvised explosive device techniques and countermeasures espoused by the U.S. that “the enemy could use these reports to plan future lED attacks,” the affidavit said. — Washington Examiner
Also of crucial note is the timing concerning the US government’s pursuing the case out of which the affidavit originated. The document’s author, FBI special agent Megan Brown, was assigned to the case in 2017, less than a year prior to filing the affidavit.
This suggests, as long suspected, the Obama DOJ likely wasn’t moving forward with charges, after which the Trump DOJ decided to go for it.
The compound in Abbottabad, Pakistan, where Osama bin Laden lived. Image source: EPA
In the document Brown confesses that her understanding of the seven-year-old “criminal conspiracy” is based on “testimony of a forensic examiner in Manning’s court martial, my conversations with FBI forensic examiners, and research on the internet.”
Research on the internet? Perhaps the FBI found itself over-reliant on Wikipedia for those times it couldn’t concoct “WikiLeaks-Taliban” connections out of New York Times headlines.
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The full US federal affidavit below:
via ZeroHedge News http://bit.ly/2v6Am2D Tyler Durden
You can call me Al. By Al I mean Alan Greenspan. Oh I know, he has tons of detractors and critics and there’s a lot to be critical about. But before you go on a hate tirade let’s all have some respect. The man is 93 years old and I for one, if I make it to that age, would be glad to be just half as lucid as he is at this age. Respect.
Now what I’m talking about here is Alan’s interview on CNBC on Friday. Have a close listen as there are some interesting nuggets in there.
It’s actually fascinating for several reasons:
One: He acknowledges that a 10% $SPX rally correlates to 1% GDP growth. That’s how closely markets and the economy are linked. Hence the vested interest by the powers that be to keep levitating asset prices. No wonder then that President Trump is so eager for the Fed to go on the path of QE:
If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%…with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite!
If only we had QE4 we could grow at 4% and the $DJIA would be at 31K-36K. Part of this statement is of course political calculus. After all someone has to be blamed if growth slows ahead of the US election, may as well blame the Fed, not self initiated trade wars or tax cuts. Yet the president of the United States has now squarely made central bank policy responsible for not only the direction of equity markets, but also their levels and directly linked the Fed’s policy to GDP growth. But in context of the upcoming 2020 election the tweet makes sense as he of course doesn’t want to see markets falter into the 2020 election.
Two: But Alan also acknowledges the larger economy is in massive trouble and by extension, markets. A short term boost he calls the current rally with growth faltering in the long term. Key reasons: Slowing growth in Europe and substantial fiscal problems related to entitlements which are rising and will continue to rise due to the demographic picture which can’t be changed. Add an “awful” political climate and you have a structural drag on the economy that Alan sees fading “dramatically”.
Three: The spread in the yield of the 30 year and 5 year. Alan Greenspan sees that as a key measure of the degree of willingness on the part of corporate management to make investments in the longer run.
Here’s that yield chart in correlation to past recessions:
That curve hasn’t inverted, but it exhibits behavior similar to previous pre-recession periods when unemployment was at a cycle low.
How willing is corporate management to make investments for the longer run? Given the pre-occupation with buybacks the action seems to suggest buybacks over CAPEX:
While 10 firms made up 31% of all buybacks in 2018 (according to Goldman) Apple has spent $74B on share buybacks, 2.5 times more than it spent on Capex + R&D. Overall buyback growth in 2018 was way higher than Capex growth.
Certainly says a lot about priorities. In conjunction with the charts posted this weekend in Mind the Gaps this screams 2020 recession risk to me and if so, buybacks will disappear quickly when that reality sinks in perhaps later in the year.
Before you think I’m a lone butty voice on this: Guggenheim is seeing a 2020 recession: “Our Recession Dashboard also continues to point to a recession starting by mid-2020.”
And with it their broader risk assessment for markets is pointing toward a 40%+ drawdown:
That’s a lot of GDP takedown given Alan Greenspan’s ratio outlined above.
The larger message: In essence Al is affirming my Combustion case, that it all will end badly and that the current rally will not last.
We’re playing the same tune. You can call me Al:
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via ZeroHedge News http://bit.ly/2UnGkpU Tyler Durden
“A good company at the wrong price…”is how Stefano Girola, a portfolio manager at Alicanto Capital SGR in Milan, is describing the plunge in Nexi SpA after its IPO – the biggest in Europe in 2019 – collapsed from the open.
As Bloomberg reports, a mix of existing and new shares in the payment services specialist had been sold to more than 340 investors from around the world at 9 euros each… but things were not good from the start as the company opened below that IPO price and kept sliding…
The Nexi IPO is the largest in Europe since German brake maker Knorr-Bremse AG’s 3.8 billion-euro share listing in October. It is also the biggest in Milan since Pirelli & C. SpA returned to the market in 2017.
“The Nexi IPO is a source of pride for the country,” CEO Paolo Bertoluzzo said during an opening ceremony at the Milan exchange.
“The share price should be viewed over time, this is only day one.”
But, as Alicanto’s Girola warns,
“I am not particularly surprised by the negative performance of Nexi, which in my view was wrongly priced on expectations that rarity value would have boosted demand.”
All of which is rather odd since CNBC’s Bob Pisani proclaimed that the dismal post-IPO performance of LYFT was a “one-off.”
via ZeroHedge News http://bit.ly/2V2LQ5O Tyler Durden
Having slipped for two consecutive months, US Manufacturing production was expected to modestly rebound in March (by 0.1% MoM) but it failed, ending unchanged.
However, headline industrial production data was not just woirse than expected but contracted by 0.1% MoM in March…
The biggest drivers were Mining which fell 0.8% in March after no change in February, and Motor vehicles and parts production, which tumbled 2.5% in March to the lowest level since July. Q1 saw auto production slide 6.9% – the biggest drop since Oct 2014.
Capacity utilization fell to 78.8% from 79% in February (revised down from 79.1%).
Manufacturing output fell at a 1.1 percent annual rate in the first quarter, the worst performance since late 2017.
As Bloomberg notes, the data signal further manufacturing softness as producers cope with an inventory buildup, continuing uncertainty around trade and a dimming global growth outlook.
via ZeroHedge News http://bit.ly/2ZelUn4 Tyler Durden
There was some good and some not so good news in Bank of America’s just reported Q1 earnings report. On one hand, the bank unveiled that its quarterly profit rose 6% to $7.3 billion, a new all time high, even as revenues dipped with the company trimming some more fat (and/or muscle) as operating expenses dropped by 4% to offset the continued shrinkage in the bank’s trading revenues (all of which was discussed previously).
And while the rest of BofA’s results were generally in line if on the soft side, there was one aspect of the quarterly report that was especially notable, and it had to do with the bank’s asset quality.
Here, what was remarkable is that even as the economy is reportedly getting stronger with better consumer trends, Bank of America bumped up its provision for credit losses to just above $1 billion, or $1.013BN to be specific, up over $100MM from both a year earlier and Q4. This was the highest credit loss provision number since in 6 years, or Q2 2013.
What was also notable, is that this increase took place even as net charge-offs remained relatively stable and as the bank’s total nonperforming loans declines by $0.1BN to $4.9BN, “driven by improvements in consumer.”
Which begs the question: if the economy is so strong and the bank’s NPLs are declining, just what is BofA seeing to be raising its loss provision to a 6 year high?
via ZeroHedge News http://bit.ly/2DfTxvt Tyler Durden
Update 2: Ever careful to watch for false-flags and conspiracy theory concerns, video is emerging of a Gilets-Jaunes in black clothes at one of the two towers half an hour after the start of the fire at Notre-Dame…
One definite way to disenfranchise the yellow vests – as they crush French autocracy – would be to set them up as the fall-guys for this national disaster. Surely that is not possible!
* * *
Update 1: A silver lining – if that’s possible: a Catholic priest was today hailed a hero as it emerged he entered the Notre-Dame last night during the height of the inferno to rescue precious cathedral relics including the Crown of Thorns.
The hallowed artefact, which symbolises the wreath of thorns placed on the head of Jesus Christ at his crucifixion, was stored in the cathedral’s treasury and was brought to Paris by French King Louis IX in 1238. Jean-Marc Fournier, Chaplain of Paris Fire Brigade, was also said to have saved the Blessed Sacrament last night from the 850-year-old Gothic masterpiece.
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Paris prosecutor Rémy Heitz stressed early indications suggest the fire was accidental, as he added:
“Nothing indicates a deliberate act.”
But, as Michael Snyder details below, now that the initial shock of the fire has subsided, the Internet is buzzing with speculation about the origin of the fire. In the end, there are only two options. Either this was an accident, or someone intentionally started the fire. And if the fire was intentionally started, obviously someone had a motive for doing so.
Time columnist Christopher J. Hale set off a firestorm of speculation when he tweeted that a friend who works at the cathedral told him “cathedral staff said the fire was intentionally set”…
Hale deleted the tweet just a few minutes later.
Was he lying about what he had been told?
Coming from a professional journalist, that doesn’t seem likely.
Instead, it is much more likely that Hale quickly figured out that he said something that he wasn’t supposed to say.
A YouTube video that purportedly contains audio of Muslims celebrating the fire at the Notre Dame cathedral has also sparked a lot of speculation. But at this point there doesn’t appear to be any way to verify the authenticity of the video.
But what we do know is that all of this comes at a time when churches all over France are being attacked.
On March 17th, the second largest church in France erupted in flames, and police later ruled that it was not an accident…
While Notre Dame is undoubtedly the most well-known landmark to be affected, Paris’ second largest church, Saint-Sulpice, briefly burst into flames on March 17, the fire damaging doors and stained glass windows on the building’s exterior. Police later reported that the incident had not been an accident.
A dozen Catholic churches have been desecrated across France over the period of one week in an egregious case of anti-Christian vandalism.
The recent spate of church profanations has puzzled both police and ecclesiastical leaders, who have mostly remained silent as the violations have spread up and down France.
Last Sunday, marauders set fire to the church of Saint-Sulpice — one of Paris’ largest and most important churches — shortly after the twelve-o’clock Mass.
In Nimes (department of the Gard), near the border with Spain, the church of Notre-Dame des Enfants was desecrated in a particularly odious way, with vandals painting a cross with human excrement, looting the main altar and the tabernacle, and stealing the consecrated hosts, which were discovered later among piles of garbage.
Likewise, the church of Notre-Dame in Dijon, in the east of the country, suffered the sacking of the high altar and the hosts were also taken from the tabernacle, scattered on the ground, and trampled.
Could it be possible that there is a connection between those attacks and the fire that just erupted at the Notre Dame cathedral?
That is a question that any decent investigator would be asking at this point.
We also know that anti-Christian and anti-Semitic attacks are on the rise in France. Just check out these numbers…
The number of anti-Semitic attacks (541) rose 74 percent from 2017-2018 while anti-Muslim attacks numbered just 100, the lowest since 2010.
Meanwhile in the same period, there were 1063 anti-Christian attacks, a slight increase on the previous year.
Needless to say, radical Islamists are responsible for most of the attacks against Christians and Jews, and the number of Muslims living in the Paris area has greatly increased in recent years…
According to reports, the number of Jews fleeing France for their safety has dramatically increased since 2000.
In one Paris suburb alone – Seine-Saint-Denis – 40 percent of the population is Muslim while 400,000 illegal immigrants also live there.
But in this politically-correct era, we aren’t supposed to talk about attacks against Christians, and this is especially true if those attacks are conducted by radical Islamists.
On Monday, even anchors at Fox News had apparently been instructed that any speculation about who started the Notre Dame cathedral fire must be immediately shut down. These days there is very little difference between Fox News and the other major news networks, and that is very unfortunate.
On another note, I also find it very interesting that at one point on Monday a YouTube algorithm linked the fire at the Notre Dame cathedral with the 9/11 attacks…
A YouTube feature designed to combat misinformation offered some of its own during a major news event Monday: It linked the fire at the Notre Dame Cathedral to the September 11 terrorist attacks.
The company blamed the mixup on its algorithms. It removed the links on all Notre Dame fire posts after the issue was flagged.
In this day and age, the “spin” is often more important than the actual events themselves.
In the coming days, a tremendous effort will be made to get us to feel a certain way about the Notre Dame cathedral fire.
But what would be so wrong with allowing us to think for ourselves and allowing us to come to our own conclusions?
The Internet was one of the last bastions for global free speech, but now the heavy hand of censorship is descending, and our ability to freely discuss global events is eroding a little bit more with each passing day.
via ZeroHedge News http://bit.ly/2Gb1UZC Tyler Durden
Precious metals traders are using the ‘f’ word a lot this morning – ‘Fiduciary’ – as they question the rationale for ‘someone’ deciding to puked over 11,000 gold futures contracts (around $1.5 billion notional) into the market, sending the price tumbling to its lowest since January…
Some have argued this is technically driven as Gold breaks below its 100DMA…
But others noted the recent trend of weakness ahead of the London Fix…
Silver was also hammered lower…
via ZeroHedge News http://bit.ly/2GrQRwQ Tyler Durden
Since the last financial crisis, we have witnessed the greatest corporate debt binge in U.S. history.
Corporate debt has more than doubled since then, and it is now sitting at a grand total of more than 9 trillion dollars. Of course there have been other colossal corporate debt binges throughout our history, and they all ended badly. In fact, the ratio of corporate debt to U.S. GDP rose above 40 percent prior to each of the last three recessions, but this time around we have found a way to top that. According to Forbes, the ratio of nonfinancial corporate debt to U.S. GDP is now nearly 50 percent…
Since the last recession, nonfinancial corporate debt has ballooned to more than $9 trillion as of November 2018, which is nearly half of U.S. GDP. As you can see below, each recession going back to the mid-1980s coincided with elevated debt-to-GDP levels—most notably the 2007-2008 financial crisis, the 2000 dot-com bubble and the early ’90s slowdown.
You can see the chart they are talking about right here, and it clearly shows that each of the last three recessions coincided with the bursting of an enormous corporate debt bubble.
This time around the corporate debt bubble is larger than it has ever been before, and risky corporate debt has been growing faster than any other category…
Through 2023, as much as $4.88 trillion of this debt is scheduled to mature. And because of higher rates, many companies are increasingly having difficulty making interest payments on their debt, which is growing faster than the U.S. economy, according to the Institute of International Finance (IIF).
On top of that, the very fastest-growing type of debt is riskier BBB-rated bonds—just one step up from “junk.” This is literally the junkiest corporate bond environment we’ve ever seen.
Needless to say, the stage is set for a corporate debt meltdown of epic proportions.
What makes this debt bubble even worse is the way that our big corporations have been spending the money that they are borrowing.
Instead of spending the money to build factories, hire workers and expand their businesses, our big corporations have been spending more money on stock buybacks than anything else.
Every year, publicly traded corporations spend hundreds of billions of dollarsbuying back their own stocks from shareholders, and much of that is being done with borrowed money.
For example, in recent years General Motors has spent nearly 14 billion dollars on stock buybacks. And that number certainly sounds quite impressive until you learn that General Electric has spent a whopping 40 billion dollars on stock buybacks.
Sadly, both corporate behemoths are now absolutely drowning in debt as a result of their foolishness.
In the final analysis, borrowing money to fund stock buybacks is little more than an elaborate Ponzi scheme. In their endless greed, corporate executives are cannibalizing their own companies because it makes some people wealthier in the short-term.
And now this giant corporate debt bubble has reached a bursting point, and there is no way that this story is going to end well.
Meanwhile, another financial bubble of epic proportions is also getting a lot of attention these days. If you are not familiar with “shadow banking”, here is a pretty good explanation from CNBC…
Nonbank lending, an industry that played a central role in the financial crisis, has been expanding rapidly and is still posing risks should credit conditions deteriorate.
Often called “shadow banking” — a term the industry does not embrace — these institutions helped fuel the crisis by providing lending to underqualified borrowers and by financing some of the exotic investment instruments that collapsed when subprime mortgages fell apart.
This kind of lending has absolutely exploded all over the globe since the last recession, and it has now become a 52 trillion dollar bubble…
In the years since the crisis, global shadow banks have seen their assets grow to $52 trillion, a 75% jump from the level in 2010, the year after the crisis ended. The asset level is through 2017, according to bond ratings agency DBRS, citing data from the Financial Stability Board.
Who is going to pick up the pieces when a big chunk of those debts start going bad during the next financial crisis?
Never before in human history have we seen so much debt. Government debt is at all-time record levels all over the world, corporate debt is wildly out of control and consumer debt continues to surge.
A system that requires debt levels to grow at a much faster pace than the overall global economy is growing to maintain itself is a fundamentally flawed system.
But that is what we are facing. If global debt growth fell to zero, the global economy would instantly plunge into a horrific depression. The only way to keep the game going is to keep expanding the debt bubble, and the larger it becomes the worse the future crash will be.
Most of us have been in this system for our entire lives, and so most of us don’t even realize that it is possible to have a financial system that is not based on debt. This is one of the reasons why I get so frustrated with the financially-illiterate politicians who insist that everything will be just fine if we just tweak our current system a little bit.
No, everything is not going to be just fine. In fact, we have perfectly set the stage for the worst financial meltdown in human history.
At this point nobody has put forth a plan to fundamentally change the system, and there is no way out.
All that is left to do is to keep this current bubble going for as long as humanly possible, and then to duck and cover when disaster finally strikes.
via ZeroHedge News http://bit.ly/2v4tFy0 Tyler Durden
