A Wobbling Stock Market

A third period of heightened volatility shouldn't surprise us.

Consider this chart of the SPX (S&P 500) over the past two years: take a look at the relative steepness of each of the red lines (rallies), the duration of each rally (purple lines), the blue boxes (volatile spots of bother) and the green line (market has gone nowhere for 19 months as every rally to new highs drops back to or below the high of January 2018).

As the saying goes, a market topping is not an event, it's a process. There are a handful of historically useful characteristics of topping markets:

1. Declining volume / liquidity

2. Increasing volatility--major swings up and down that increase in amplitude and frequency

3. Inability to break decisively above previous resistance (i.e. make sustainable new highs in a stairstep that moves higher).

We see all these elements in the S&P 500 over the past few years. A healthy, stable advance in 2017 led to a manic blow-off top that crashed in February of 2018, setting off a period of high volatility.

This set up another stable advance that was shorter than the previous advance, and also steeper. This led to the multi-month period of instability that concluded in a panic crash in December 2018.

Since then, advances have been shorter and steeper, suggesting a more volatile era. Three advances to new highs have all dropped back to (or below) the highs of January 2018. In effect, the market has wobbled around for 18 months, becoming more volatile after every rally.

Notice how the duration of each advance is getting shorter even as each advance is steeper, i.e. more manic. Notice also that the amplitude of each volatile plummet from new highs increases.

What happens next? No one knows, but a third period of heightened volatility shouldn't surprise us--nor should a further increase in the amplitude of the move during the next volatile spot of bother.

Recent podcasts: I was blessed to be invited to two terrific podcasts:

Parallels Between The Decline of the Roman Empire and America (46 minutes)
Host: Patrick Vierra of SilverBullion.com.sg

Market Huddle Episode 41 (guest: Charles Hugh Smith)
Hosts: Patrick and Kevin
(I am the first guest, then I get to do the last half-hour informal free-for-all.)


Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)

My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

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The Road to Hell Is Paved with Virtue-Signaling

The idea that everything will be solved if we borrow a couple more trillion and give it away is the dominant paradigm.

Here in the decay phase of Imperial Pretensions, The best lack all conviction, while the worst are full of passionate intensity. It's a line from Yeats' poem The Second Coming, and it speaks to our current stumbling descent toward the abyss, where the worst invest their energies in virtue-signaling and the best retreat from the hopelessness of actually addressing our real-world problems.

The road to Hell is paved with virtue-signaling: rather than actually solve the knotty problems that are dragging us toward the abyss, we substitute self-righteousness for problem-solving. That is virtue-signaling in a nutshell.

Virtue-signaling goes hand in hand with the only "solution" that's politically correct: throw a borrowed trillion dollars at the "problem", dance the humba-humba around the bonfire at midnight and hope that magic will resolve the underlying issues.

Hence the calls for Medicare for All, Universal Basic Income, and free college for all, all paid with borrowed money, despite the virtuous bleatings that "taxes on the rich/robots" will magically pay for trillions of additional dollars to be squandered on corrupt, self-serving cartels.

The well-being of the American populace is broken, with well-being including mental and physical health, financial security and access to all forms of capital, including education, infrastructure and functioning institutions.

Throwing more money at the cartels that have failed--defense, governance, healthcare and higher education--won't solve anything. The health of the American populace is in long-term decline for structural reasons: our diet has deteriorated, our fitness has deteriorated, our educational inputs regarding diet, fitness and health have deteriorated. Popping another $1,000 a month pill doesn't restore health or well-being, yet that's what the healthcare cartel profits from: managing our sickness.

As for the "defense" industry, a.k.a. the military-industrial-intelligence cartel:rather than do the hard work of redefining America's role in the world (declining to pursue wars of choice and policing the world) and then right-sizing the armed forces for the emerging realities of automated warfare, cyber-warfare and asymmetric warfare, we spend trillions of dollars on a jumble of horribly costly legacy weaponry with a sprinkling of pixie-dust "innovation."

This also describes the higher education cartel, a horribly costly legacy jumble that's failing students while enriching insiders and lenders. It also describes the standard institutional response to knotty issues such as homelessness: the conventional legacy "solution" is to insist on building "affordable" housing at $400,000 per unit, which means we can build 1,000 units rather than the 100,000 units of super-low-cost housing we need.

In a climate where passionately intense self-righteousness is substituted for actual problem-solving, anyone willing to consider real-world knotty problems is shouted down. It's impossible to even discuss issues of citizenship and immigration as they relate to the long-term impact of devaluing citizenship, or the impact on aging infrastructure designed for a much smaller population.

It's impossible to even discuss systematically downsizing America's role and military footprint without being accused of treason, as virtue-signaling support for the Imperial Project is necessary to broadcast your membership in the politically correct camp.

It's impossible to even discuss the connection between the high-profit snacks and sugar-water beverages that fill supermarket shelves and diabesity and metabolic disorders, or the connection between the decline of community and the rise of the Savior State.

The idea that everything will be solved if we borrow a couple more trillion and give it away is the dominant paradigm. We all understand why: solving difficult real-world problems in a fraying society riven by shrill "advocacy" (i.e. give "us" the free money rather than giving it to "them") is immensely more challenging than passionately intense self-righteousness (virtue-signaling) and borrowing as many trillions as needed to keep a bloated, ineffective, corrupt status quo glued together for another quarter or another year.

The best lack all conviction, while the worst are full of passionate intensity. The road to Hell is paved with virtue-signaling, and we are about to discover that virtue-signaling, self-righteousness and indignation are not substitutes for the difficult task of completely restructuring failing institutions, modes of production and governance.

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)

My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.

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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, William P. ($25), for your splendidly generous contribution to this site-- I am greatly honored by your steadfast support and readership.

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Who Protected Epstein for Decades, and Why?

Or perhaps "Epstein was an intelligence asset" is just a tissue-thin cover for a much more destructive reality: those at the top of the American state have no moral compass at all.

Let's start by stipulating that the Jeffrey Epstein story is so sordid and outlandish that it's like a made-for-TV movie about the evil proprietor of a nightmarish enclave of private perversion and sexual exploitation, Lolita Island.

For Epstein's victims, the nightmare was all too real.

Next, let's stipulate that in a nation with a functioning system of justice, every individual who knew about Epstein's degenerate empire and did nothing to stop it should be ushered into a Federal prison cell to ponder their sins against the exploited girls and against the nation.

Yes, as in treason, as in "throw them in prison and let them rot" treason. As I have explained, corruption and debauchery undermine the legitimacy of the state, and so doing nothing while Epstein et al. gratified the desires of the rich and powerful for degenerate debauchery was treasonous: the American state will collapse not from military conflict but from moral decay, and every individual who enabled (or made use of) that moral decay is guilty of treason.

Which leads us to the basic questions of the case: who protected Epstein for decades, and why? There are several explanations floating around for the why: those in power enjoyed their diabolically exploitive visits to Lolita Island and wanted to continue their criminal gratifications.

The second explanation is that Epstein was a spy for a "friendly" foreign intelligence agency and therefore off-limits. ("Friendly" is in quotes because when it comes to intelligence, one's "friends" can do more damage than one's worst enemies.)

Let's say this turns out to be true. Wouldn't the NSA, CIA and FBI know of Epstein's activities and connections to a foreign intelligence service? Of course they would. So at a minimum, we can infer the NSA, CIA and FBI enabled Epstein's operation to continue for some benefit, perhaps relating to "honeypot" blackmail and control of "assets," unwilling or willing.

This narrative is the "explanation" for Epstein's wrist-slap conviction a decade ago: he was supposedly an "asset" of US intelligence.

So exploiting vulnerable girls served the "national interests" and therefore it's all OK. If we're supposed to believe this is the heart of the matter, how is America any different from a corrupt developing-world kleptocracy organized to gratify a handful of oligarchs and their cronies?

Or perhaps the "he was an intelligence asset" is just a tissue-thin cover for a much more destructive reality: those at the top of the American state have no moral compass at all. That honeypots and blackmail are standard-issue tools of spycraft targeting individuals in the employee of other nations is a given, but presumably the CIA doesn't recruit 14-year girls as bait (although nothing should surprise us at this point).

But Lolita island (a.k.a. Orgy Island) was not spycraft; it was a privately operated wholesale exploitation of underage girls for the gratification of the Western world's male elites. That some enterprising agency recruited (or blackmailed) Jeffrey Epstein was predictable, as the treasure trove of compromising videos could yield all sorts of useful leverage on highly placed individuals.

Many of us sense an existential crisis is close at hand, and the U.S. is ill-prepared for such a crisis. Possibilities broached by others include a global war, a break-up of the U.S. into regional states, or a civil war of some sort.

My bet is on a moral and financial crisis in which the ruling elites and the federal state lose their legitimacy, i.e. the consent of the governed. As their Federal Reserve "money" loses value and the corruption of the ruling elites and the government they control reaches extremes, the citizenry will no longer heed their corrupt, self-serving "leaders."

If America's ruling elites will not let justice be done, then they guarantee a revolt against the elites that could track a very grim path if that is the only option left open to the citizenry.

Once again I turn to The Second Coming by William Butler Yeats for a poetic evocation of the coming crisis:

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)

My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Simons C. ($20), for your splendidly generous contribution to this site-- I am greatly honored by your support and readership.

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The Internal War in the Deep State Claims Its High Profile Casualty: Jeffrey Epstein

The "traditionalist" Neocons are going to have to decide to fish or cut bait.

I've been writing about the fracturing Deep State for the past five years:

Is the Deep State Fracturing into Disunity? (March 14, 2014)

Is the Deep State at War--With Itself? (December 14, 2016)

Epstein and the Explosive Crisis of the Deep State (July 15, 2019)

The conflict has now reached the hot-war stage where bodies are turning up, explained away by the usual laughable covers: "suicide," "accident" and "heart attack." That Jeffrey Epstein's death in a secure cell is being labeled "suicide" tells us quite a lot about the desperation of the faction trying to protect the self-serving predators that have wormed their way into control of many Deep State nodes of power.

Here's the basic structure of the Deep State conflict as I see it. For context: The Deep State exploded in size and power during World War II. At the war's end, the proper role of the U.S. in the postwar era was up for grabs, and over the course of a few years, the CIA and other intelligence agencies were established and the doctrine of containment of the Soviet Union became the dominant narrative, a narrative that held with remarkable consistency for four decades until the Soviet Union collapsed in 1991.

This collapse was another critical juncture, and debates over America's role in this "unipolar era" were finally settled in favor of the militarily-geopolitically activist ideology of neoconservatism (Neocons).

This globalist ideology spawned a variety of monstrous policy disasters and as a result the Neocons have been challenged by factions within the Deep State.

This Neocon Globalist camp is dominated by the amoral ideology of the ends justifies the means. This everything is allowed, anything can be hidden or justified ideology slowly spread from overseas black ops and a spectrum of interventions to the power nodes of the domestic Deep State.

The failures of Neocon globalism have ushered in another critical juncture in the Deep State. What is America's proper role in a multi-polar world that is fracturing across multiple faultlines? This juncture is a manifestation of a broader profound political disunity in America and many other nations.

As the policy disasters launched by Neocon Globalists piled up, the Neocons were desperate for domestic political allies. As a result, the "traditionalist" Neocons accepted the systemic corruption of the Deep State by degenerate, predatory self-serving elites and their enablers in the intelligence agencies, corporate media and other nodes of power.

Arrayed against this completely corrupt, degenerate camp of Neocon Globalists is a "nationalist" camp within the Deep State that grasps the end-game of Neocon Globalism, and is busy assembling a competing nation-centric strategy. There is tremendous resistance to the abandonment of Neocon globalism, not just from those who see power slipping through their fingers but from all those firmly committed to a magical belief that past success guarantees future success, i.e. doing more of what's failed will eventually succeed.

The "nationalist" faction within the Deep State is gaining ground, and now a fracture in the Neocon camp is threatening the Globalists: the "traditionalist" Neocons who accepted the systemic corruption of self-serving elites are being challenged by "rogue realists" who have finally awakened to the mortal danger posed by amoral predatory self-serving elites.

The debauchery of morals undermines the legitimacy of the state and thus of the entire power structure. As I recently noted in Following in Rome's Footsteps: Moral Decay, Rising Inequality (June 29, 2019), America's current path of moral decay is tracking Rome's collapse step for step.

Having enabled and used amoral predators like Epstein, the "traditionalist" Neocons are forced to defend the debauched and now toxic "Liberal" defenders of the Neocon Globalist Project. That they will stop at nothing is already obvious, but what's less obvious is their opponents, the "rogue realists" who understand that empires fall not from external enemies but from internal corruption and debauchery, are willing to take whatever steps are necessary to save the Republic from the self-serving elites that have infiltrated key nodes of Deep State power.

The final fracture is within the "rogue realists": one camp still believes in the Neocon Globalist Project, and simply wants to rid the Deep State of the debauched predators and their protectors. The other camp sees the two as inextricable: the Neocon Globalists are as hopelessly amoral and corrupt as the very worst they are protecting. The only way to fix the mess is to clean house by getting rid of the debauched predators and the amoral Neocon Globalists.

The "rogue realists" are attempting to use the judicial system to bring down the predatory self-serving elites, but given Epstein's "mysterious" end, it appears the Department of Justice is also infiltrated with those willing to do whatever it takes to protect the amoral, self-serving predators and their enablers.

This raises the issue that destroys democracies: who investigates the investigators? The "traditionalist" Neocons are going to have to decide to fish or cut bait: either swirl down the sewer by protecting everyone in Epstein's black book and stash of videos, or clean house before they lose it all.


Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)

My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

---

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Brian M. ($10), for your most generous contribution to this site-- I am greatly honored by your support and readership.

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The Gulag of the Mind

Befuddled and blind, we wander toward the cliff without even seeing it, focusing on our little screens of entertainment and self-absorption.

There are no physical barriers in the Gulag of the Mind--we imprison ourselves, and love our servitude. Indeed, we fear the world outside our internalized gulag, because we've absorbed the narrative that the gulag is secure and permanent.

We've also absorbed the understanding that escape will be punished. Dissent will quickly be suppressed or vilified, and the dissenter socially and economically marginalized.

In a peculiarly human pathology, we now believe the exact opposite of reality:our abuser is our savior, we're getting wealthier when in fact we're getting poorer, the government will always save us, even though the government is the problem, not the solution, and we're entitled to all sorts of good things even as the entire system clings to a veneer of normalcy that is increasingly difficult to maintain.

We dare not realize the crises we're about to face are novel, and the thinking of the past is worse than useless, as doing more of what's failed is about to bear real consequences that cannot be papered over.

Michael Grant described this clinging to the past in his excellent account The Fall of the Roman Empire:

There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. (The Status Quo) attitude is a complacent acceptance of things as they are, without a single new idea.

This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.

This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all.

The Gulag of the Mind is constructed of both traditional fictions--that all the looming crises can be solved by repeating what worked in the past 50 years-- and the new ones of virtual signaling--that publicly signaling our virtuous convictions is magically equivalent to actually solving problems, as if our problems are all nothing but a scarcity of virtuous convictions rather than real-world crises that will require immense fortitude and sacrifice to weather, much less resolve.

The Gulag of the Mind depends on technology--or more precisely, on a magical thinking faith that technology will always effortlessly save us: some new form of magic will manifest at the moment of need and we won't have to change anything in our lifestyle or our corrupt power structure.

In the Gulag of the Mind, a perversion of justice passes for real justice: there are two sets of laws and two levels of enforcement: the wealthy and powerful escape justice while commoners are given life-crushing prison sentences for Drug Gulag offenses, and their vehicles and belongings are confiscated for being too poor to pay the state's onerous penalties and fees.

Befuddled and blind, we wander toward the cliff without even seeing it, focusing on our little screens of entertainment and self-absorption. The bottom of the cliff beckons, and filled with the magical sense of security bestowed by the Gulag of the Mind, we imagine we can walk on air and escape unhurt.

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)

My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

---

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Tom Q. ($5/month), for your monumentally generous pledge to this site-- I am greatly honored by your support and readership.

Read more...