When anyone asks me how I can best describe my experience in nearly forty years at sea, I merely say, uneventful. Of course there have been winter gales, and storms and fog and the like. But in all my experience, I have never been in any accident … of any sort worth speaking about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort.”
==Edward J. Smith, 1907, Captain, RMS Titanic
The Titanic sunk relatively quickly, we are sinking relatively slowly. Like the frog placed in the water before the heat is turned on, most of us seem blissfully ignorant of the flames setting the pot to a boil. Quickly or slowly, the fate of those that do not become aware of the economic, social, geopolitical and democratic crises that are already hitting the boiling point in America and around much of the world will be the same.
Zero hedge this morning asked an obvious question given that almost all of the economic data points coming forth over the past several months, but one, are heading south “unexpectedly”, which is a word that is inherently fraught with unsurprising risks. In the current environment, as in past periods, relying on the “experts” or consensus opinions can not only be hazardous to your wealth, but in America today, hazardous to your health as well. All that being said, in my humble (once hubrisian) opinion, we may already be in, or certainly heading into, a recession.
Consensual Reality is either what exists, or what we can agree by consensus seems to exist; the process has been (perhaps loosely and a bit imprecisely) characterized as “when enough people think something is true, it… takes on a life of its own.” The term is usually used disparagingly as by implication it may mean little more than “what a group or culture chooses to believe,” may bear little or no relationship to any “true reality”, and, indeed, challenges the notion of “true reality”. –Wikipedia
In the summer of 1991, Alan Greenspan, the man who would one day be called the Maestro, insisted that all was well with the American economy. Interestingly, as he spoke these words it turned out that the economy was tanking and would receive the designation of having already been in a recession. This was also the economist that, prior to becoming the Fed Chairman, had one of the worst track records on forecasting economic trends of any member of the Wall Street economic community. The same man who warned of “irrational exuberance” in the stock markets, but continued to fund the frenzy for several more years while head of the Fed. All to the detriment of the poor suckers who were herded like cattle into the bubble while, of course, smart money was hitting the exits. And yes, Alan was the same fellow who realized that the only way to keep the early 2000’s economic imbalances from pushing the nation and the world into a serious recession was to absurdly over inflate the housing market while the Treasury and the SEC turned a blind eye to the massive fleecing of Americans and many overseas investors with insanely risky, but brilliant rewarding to Wall Street, esoteric products that ended up destroying trillions and putting us into a depression that we only think we have escaped.
Then of course, just go to the reassuring, but totally bogus statements out of the mouth of the new Federal Reserve banking shill, a firm believer in the “Great Moderation”, helicopter Ben and his then mega rich Treasury Secretary. The man with word Goldman burned onto his forehead, throughout 2007, was constantly telling the American public that the housing market issues were contained and there was nothing to fear. Of course 2007, though a turbulent year, witnessed markets hitting all time highs for the cycle in October. The following year and half would prove all of the most prominent government “experts” just a tad wrong.
One of the soundest and persistent ideas in Skinnerian Behaviorism is that “punishment is only temporary” and reward more lasting on its affects on human psychology and behavior. History never exactly repeats itself, but human behavior is innately and inherently driven to make the same emotive and cognitive errors over time, generationally and within each of our own individual lives. Not only does ontogeny indeed recapitulate phylogeny, but for whatever evolutionary genetic instinctual and cognitive conscious biases humans tend very easily to forget the pain of past experiences far more readily than one might think. Without this essential behavioral consistency humankind would have remained so afraid of potentially painful risk taking that we would still be living in caves. For evidence of the truth of this theorem one need look no farther than financial markets.
The truism that “time heals all wounds” is the commonplace interpretation of the same phenomenon. And, if this were not true every “expert”, and for this discussion, every economist or market strategist would be out of a job with every cycle in the economy or markets. They get to keep their ridiculously overpaid positions and we get to risk losing our money over and over and over again. The joy of a bull market on the other hand is so rewarding we become giddy and the distant pain of the last bear market is even less than a memory, it simply feels like it never happened at all.
Research by psychologist Philip Tetlock finds systematic failures both in experts’ predictions and in their “postdictions” (explanations of the past). He explains why we cannot rely on the “marketplace of ideas” to flush out bad policy ideas quickly enough to avoid serious damage in the meanwhile, and why “lots of nonsense [can] persist for long stretches of time.” Competition among information providers will not suffice if consumers are unmotivated to discriminate among competing claims, are themselves biased as to the information, or are unable to determine the truth of the matter.29 These conditions, unfortunately, are commonly met in policy debates.
===Why Government Fails So Often: And How It Can Do Better (Peter Schuck)
One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you almost never get it back.
Dance to their tunes, if you dare, but I can assure you that if you are not heading for the exits and putting up firewalls to protect you and your family from the coming deluge, you are happy being part of the herd being manipulated by “experts” to leap off the proverbial cliff. Do not trust the experts and I am no expert. Do not trust anything from this government or anyone associated with it or living off of it. The lie has become the norm, truth a mirage.
America has become a criminal enterprise and we, “the people”, are being fleeced–perhaps for the last time. The last time, because our freedoms, the financial markets, the ability to build a nest-egg may be destroyed in this next leg down and in the social and geopolitical turmoil that lies ahead. We are very likely already in a recession, and this with zero interest rates over the past six years and the most massive coordinated global “pump priming” fiscally and monetarily in history.
Beware the second derivative. The relative rate of change in stimulus has turned negative around the world. There really seems to be nothing left in the Central Banks bag of tricks. The financial markets are massively manipulated. True reality will break through the “consensus” fictions of our brainwashed minds and the illusions of recovery will dissipate. It will be a systemic shock that we may never recover from, at least under the current form of capitalism and, as well, the current form of the American political architecture. This next economic leg down will result in social chaos and police state tyranny. It is still a very slight possibility there will be sufficient unrest to delay the 2016 elections. Of course, either Clinton or Bush are, in reality, on the same team and are well nested within families of traitors and crooks.