A Flock of Black Swans Hovers over this Bear Market Bounce
The markets have rallied somewhat recently, but the economic indicators continue to get worse—much worse. Maybe the markets are giddy because they are anticipating more money printing.
Black swans abound in the form of debt at every level: the energy industry, student loans, auto debt, personal and credit card debt, corporate debt and real estate/commercial property/housing debt, and then there are the desperately underfunded pension funds, many of which are in the early stages of becoming toxic waste.
The pension underfunding problem is another massive chunk of debt that has been cleverly disguised and layered into the system, another mechanism by which the Wall Street racketeers have sucked wealth from the middle class.
The stock markets’ recent dead-cat bounce will quickly lose steam. Macy’s stock is up 1% because it beat estimates using adjusted EPS. ‘Adjusted’ is a euphemism for ‘recurring non-recurring expenses that we strip out of our reported net income calculation to make the headline earnings report look better.’ Of course, hidden between the lines is the fact that Macy’s revenues and net income (any way you calculate it) has dropped precipitously year over year.
It’s impossible to know how much longer this spike will last. But inevitably the markets will take another parachute-less jump off a tall building and remove another chunk of money from day traders, retail investors and their advisors and, of course, pension funds.