Here We Go Again

[ecosophia]

It's been a while since I paid close attention to the market for financial gimmickry -- yeah, I know, I've been slacking, spending too much time watching pandemics and wars -- so I missed the opening rounds of a familiar story.  People outside the realm of high finance ("high," in this case, meaning something not too far from "stoned out of their gourds") doubtless haven't heard of collateralized loan obligations, aka CLOs, but there's a fairly good chance that all of us will hear a great deal about them sometime in the next couple of years or so. 

Do you remember mortgage-backed securities (MBS), the investment vehicles that blew up so fetchingly in the 2008-2009 real estate crash?  If you missed that, or were too busy running for cover to take notes on the massive lumps of financial junk that were crashing into the street all around you, a MBS was a collection of residential mortgages packaged up as a "security" and traded on financial markets. The ratings agencies obligingly slapped investment-grade labels on them, and they played a very large role in inflating the speculative bubble that peaked in 2008...and then crashing it, and the world economy, in the unraveling that followed. 

CLOs are exactly the same, except that they're manufactured from commercial debt. The merry pranksters manufacturing them insist just as enthusiastically that they're rock-solid, the ratings agencies obligingly slap absurdly high ratings on them...and as far as I can tell they're at least as far into toxic-waste territory as the average housing-bubble MBS is. Oh, and the market in CLOs, which was next to nothing a decade ago, has ballooned since then to somewhere well north of US$1 trillion, with almost half of that added in the last two years. 

So we've got two of the Biblical horsemen, war and pestilence, already trotting along merrily together, and a third, famine, saddling up as we speak -- 30% of the world's wheat crop comes from Russia and Ukraine, you know, and so the price of wheat (and a number of other agricultural commodities) has doubled in the last few weeks and promises to go higher. I don't know where economic crisis fits into the Biblical scheme, but here he comes, ambling up on his pony to join the fun; no doubt the hooves are going "CLOp, CLOp, CLOp."  ;-)

Back when I was living in Ashland, Oregon, and the housing market was going stark staring nuts, I studied t'ai chi with a very capable teacher named Gene Burnett. Gene is also a singer-songwriter, and his most famous song seems highly appropriate just now. Please note that it's breathtakingly NSFW, and not just because the title is "Jump You F***ers"...

Comments

Hallelujah

[hearthspirit]

Holy crapola, she really could predict the weather!

Hallelujah!

Re: Hallelujah

[ecosophia]

Funny.

Lighter reading

[(Anonymous)]

Hi JMG

I, for one, appreciate this entry very much. Also will be humming the tune and repeating the lyric to “Jump You -etc” for the rest of the evening.

Interesting times. One can only sit back and wonder how interesting these times will get, and for how long.

Thank you
Casey

Re: Lighter reading

[(Anonymous)]

If I were a better musician, I'd transcribe the chords and melody to "JYF" so I could strum and hum it. I might even SING it, but I'd have to change just one word to reduce the ambiguity. "Jump, You Recklessly-CokeSniffing-Geedily-Dealmaking-HomeStealers..."

Lathechuck

Economic trouble

[seanbolger1]

My favourite writer on the topic is
Charles Hugh smith

http://charleshughsmith.blogspot.com/?m=1

Kind regards
Sean Bolger

Re: Economic trouble

[chaosadventurer]

I found Charles at AxisofEasy.com where he cross posts along with a couple others with similar views
Very relevant to this post, as he has been raising the alarm on the general financial shenanigans going on where MLSs and CLOs are just a part of it and 'just' the trigger points collapsing the overall everything bubble.

[ari_ormstunga]

That's a really swell song I like it a lot.

Collapse theme song(Jump you...)

[(Anonymous)]

Seems fitting for a theme song?

(H)oorah

[(Anonymous)]

Quite a catchy tune.

[(Anonymous)]

The news just keeps on getting better and better. It'll be a new world at the end of the next 20 years or so that's for sure. I wonder how much longer it will be before cars become a luxury for the few.

[(Anonymous)]

Looking like it'll be by 2036.....

[(Anonymous)]

Please allow me to be the first to say “It’s different this time!”
😉

[ecosophia]

Those words definitely belong on a bingo card.

[(Anonymous)]

Even before the kabuki distraction in Ukraine, I read an article in ZeroHedge about fertilizer prices jumping high enough a lot of farmers were not planting corn this season, soybean seeds were already sold out. Then the fertilizer plant in the Carolinas blew up. I'm really expecting food prices or shortages are going to prove a bigger problem than saber rattling with another nuclear power.

The most reliable predictor of civil unrest is when enough people do not know where they are going to get their next meal. Didn't one of your ingress charts predict famine in the U.S. in 2022?

I've been reading your works since Matt Savinar linked you off of the old LAOTC blog. Enough of your writings got through my thick head that I think I have a fair chance of being around to see how things unfold in the next decade or three. A lifestyle that would horrify most PMC is just a bonus. Got land, never bought a share of stock, new car, new computer, or owned a cell phone in my life. What a long strange trip it's been.

Thanks again for all the writings over the years. If I can have a tenth of the positive impact you have made already, than I will have known true wealth.

FWIW, let the dog out in the field today after reading more than I care on this Ukraine nonsense. Saw two bald eagles circling over the neighbours field. I'll take it as an omen we'll still be around for the hefty chore list we have in front of us.

[ecosophia]

Good heavens, now that's a blast from the past! I'm glad to hear you took the warning seriously -- and yes, you'll likely be in good shape as things unfold.

[kimberlysteele]

A few more rounds of empty shelves, vaccine revelations (the latest one, that the vaccines may be full of parasitic worm eggs, is especially odd) and drooling soliloquies from the Potato-in-Chief and they might not have to jump... because they will be pushed.

[(Anonymous)]

Urgh that reminds me of a nasty dream I had a few weeks ago. I was in the cinema with my kids. The film was about a sort of barren planet where people were taken to be punished by being tied to the ground and eaten alive by worms. I realised I shouldn't be subjecting my children to such a horrific film and the dream ended with me ushering them out of the theatre door.

[(Anonymous)]

I have skin in this game.
I think your concerns here are spot on.
For me, I am watching agriculture commodity prices.

In this recent modern unpleasantness concerning farming and food growth, there is now a great tailwind of problems causing the higher discovery of real value: rising property taxes upon the lands (including farmland) which are due in large part to socialistic idioms and ideals, huge inflationary impacts upon costs to sustain current practices of farming (particularly recently those of fertiliser products and machinery), the ageing of the small-time farmers who have little or no hope of generational youth taking up their family business and therefore the industrialisation and corporation of large-scale farming acrage where the wealthy oligarchs purchase lands and bring to these lands their interests only short term profits ... .

Let us not bring up inflationary pressures induced by the U.S. Federal Reserve policies, nor the Global-Weirding cycle of our weather (human wrought or not). Let us not bring up how industrialisation has brought about the plundering of our planet's reserves nor the pillaging of the earth's bio-systems.

Concerning financial CLOs vs. MBSs: it is the same game as in 2008. Borrow money to play and WHEN things go south ... make sure someone else will be holding your hot-potato due to your good diligence of making your investment-grade items AAA+ rated with their junk "hidden," so that others will buy them and you are free of the mess.

Amazing to me that these boom-bust cycles are so much briefer now.
Spengler for sure.
Alvin Toffler anyone?

-sjh

[(Anonymous)]

Amazing to me that these boom-bust cycles are so much briefer now.

And each one results in greater economic and social damage, while the 'recovery" is weaker and benefits fewer and fewer people.

The crash of '08 was bad, but I noticed it wasn't until real estate market "recovered" that the numbers of visible homeless exploded.

[(Anonymous)]

I suppose I shouldn't be surprised that none of the regulators learned their lesson from 2008, but somehow I wasn't expecting to see the same mistakes made quite so soon....

[escorcher]

Instead it looks like they took the 'hide dodgy debt' principle and super-sized it.

Of course with the headline that mortgage risk will never be so hidden again.

'Clever' humans.

[(Anonymous)]

It seems like we're getting a lot of things all piling onto each other. The next few years promise to be quite something...

[(Anonymous)]

Thanks for the heads up. Usually I see economic crisis fall under the famine horse, since one usually leads to the other.

ah the greed that stops too many from knowing its time to exit

[chaosadventurer]

When the crash can no longer be denied, the drop is widely recognized as having been obvious and inevitable..
but when too many in those "high" finance can't see that inevitable, they chose the path to that Jump Gene sings about instead of exiting while they can.
https://axisofeasy.com/oftwominds/why-so-few-see-the-last-chance-to-exit/

Re: ah the greed that stops too many from knowing its time to exit

[ecosophia]

Isaac Newton thought he could time the South Sea Bubble, and lost his shirt. If Isaac Newton wasn't smart enough to do it, I figure the rest of us have zero chance.

And then I remember an old man named Joseph P. Kennedy. The reason you've heard of a family named Kennedy is that one day in the spring of 1929, when he went down from Boston to New York to take care of some business, the shoeshine boy in the train station offered him a stock tip. He took that as fair warning that the market was entering a state of mass hysteria, pulled every cent out of stocks, and put them someplace safe. When the rubble stopped bouncing in 1931 or so and you could buy General Motors stock for $9.00 a share, he started buying again -- and that's what turned him from a two-birt bootlegger to a very rich man.

[(Anonymous)]

That song is a hoot! I must admit, I wasn't exactly expecting that level of schadenfreude from you.

When the courtiers manage, as they always do, to bankrupt their entire country and every peasant toiling away in it, just to ensure that they can keep attending their fêted masked balls, everyone else's thoughts will eventually turn to more common entertainments... like tumbril rides to the guillotine. A nice downpour of investment bankers would make quite the memorable Tic-Toc clip to hand down to the grandkids as an instructional video of how to get offending courtiers to voluntarily remove themselves from influence, should the need arise again within their lifetime.

Preserving old-fashioned, less-energy-intensive ways of addressing recurring problems is so important nowadays. Many thanks for the reminder of that simple and elegant solution.

— Christophe

[ecosophia]

Funny. Yeah, every so often that song comes to mind -- a reminder of older, simpler times. ;-)

[(Anonymous)]

Maybe you could put on your editor hat and persuade some of your musically inclined readers might put together a playlist and a songbook to help us navigate the Long Emergency?
Rhydlyd

[ecosophia]

The floor is open for nominations. The one other song that comes to mind for me is the Kingston Trio's fine little piece The Merry Minuet.

Follow the stock of Deutsche Bank

[(Anonymous)]

In the home currency for a better sense of what the 'in the know' traders are doing.

https://finance.yahoo.com/quote/dbk.f

[(Anonymous)]

I seem to recall reading an explanation of the Four Horsemen in Revelations which argued that Famine wasn't there because of locusts or drought or floods or what have you - he symbolized the Roman colonizers, forcing the Jews to cultivate luxury crops for foreign markets, rather than staples needed at home. Thus this otherwise rather odd quote:

I looked, and behold, a black horse; and he who sat on it had a pair of scales in his hand. And I heard something like a voice in the center of the four living creatures saying, "A quart of wheat for a denarius, and three quarts of barley for a denarius; but do not damage the oil and the wine."

-Cliff

[(Anonymous)]

Cliff,

I think I read the same, or a very similar piece. The one I read argued that the four hoursemen represent the inevitable stages of a collapsing empire, using Rome as a template.

The first rider is not Pestilence but Conquest. It represents the empires attempt to maintain power by attempting to take from nations around them, usually via conquest. Then I saw when the Lamb broke one of the seven seals, and I heard one of the four living creatures saying as with a voice of thunder, "Come." I looked, and behold, a white horse, and he who sat on it had a bow; and a crown was given to him, and he went out conquering and to conquer.

The second, often depitcted as war is actually closer to rebellion or revolution. It represents the factioning of the empire into waring tribes. When He broke the second seal, I heard the second living creature saying, "Come." And another, a red horse, went out; and to him who sat on it, it was granted to take peace from Earth, and that men would slay one another; and a great sword was given to him.

This process eventually leads to Famine. I liked the interpretation that some of this famine might be self inflicted by the elites who demand that their privelgaed lives continue. When He broke the third seal, I heard the third living creature saying, "Come." I looked, and behold, a black horse; and he who sat on it had a pair of scales in his hand. And I heard something like a voice in the center of the four living creatures saying, "A quart of wheat for a denarius, and three quarts of barley for a denarius; but do not damage the oil and the wine."

And the final horse is Death and represents both the death of people and the death of the empire. And with the empire gone the people are now subject to the ruthlessness of nature (both man's nature and the environment). When the Lamb broke the fourth seal, I heard the voice of the fourth living creature saying, "Come." I looked, and behold, a pale horse; and he who sat on it had the name Death; and Hades was following with him. Authority was given to them over a fourth of the earth, to kill with sword and with famine and with pestilence and by the wild beasts of the earth.

AV

Solar cycle 25

[(Anonymous)]

JMG (or others) - are you at all concerned by the possibility of a geomagnetic storm as solar cycle 25 begins?

Re: Solar cycle 25

[(Anonymous)]

Yes, to some extent - but…

To me, this is a distinct (but real) probability. But there are other things which are definitely coming (food shortages; further supply chain problems; …), some things which seem almost inevitable (a financial crash coming to mind), and yet other things which I deem to be very likely (e.g. a substantial number of people developing health problems of one way or another due to novel „treatments“), and some yet other things which are also distinct (but real) probability somewhere down the list (e.g. a nuclear war). And of course there are certain people in the world who try to shove us all into a digital, dystopian nightmare.

Between all that, my worrying capacity is simply maxed out.

I do my best to prepare myself and my loved ones for all that, figuring that if a geomagnetic storm of a relevant strength should hit, at least it will immediately solve some of the other problems (government overreach through technical means coming to mind, or the continuation of vaccination programs), and at the very, very least, all my preparations for said other things will also help me if this stuff should hit the fan.

Does that help?

Milkyway

[open_space]

Interesting that the famine horseman has a balance.

[(Anonymous)]

It’s probably to weigh the grain, showing it is expensive.

[(Anonymous)]

accord with my own divinination system based on Philip K. Dick Western countries are in the corespondence of 216AD,
(formula for the divination system)
https://ecosophia.dreamwidth.org/170530.html?thread=26978850#cmt26978850

216AD:

Emperor Caracalla tricks the Parthians by accepting a marriage proposal. He slaughters his bride and the wedding guests after the celebrations.
Caracalla provokes a war with Artabanus V (of Parthia) to imitate his idol Alexander the Great.

That was the state of Empire, and the kind of moral corruption, disconnect and hubris and this decision had consequence beyond the moment, even might have determined the 3rd century crisis, Caracalla was killed one year later (June 2022 correspondence), and the Parthian Empire was replaced by the more offensive Sassanid Empire.

[hearthspirit]

I like that your divination system also aligns well with Monty Python's Search for the Holy Grail, and that therefore we are analagous to Scene 15. Because that means in Scene 16 we learn the bride was only kicked, the groom did not in fact fall to his death, and the father was only near fatally wounded, no! he is getting better...

And fortunately it all stops before Hubert sings.

[(Anonymous)]

People have been talking about these for some years now, but the train wreck has been moving slooooowly, mainly due to all the printed money and goalpost moving. I remember there was quite a bit of anticipatory flutter when all the malls started shutting down - most of them aren't owned outright but are levered to the hilt and they're all dead as doornails, no hope of ever making their nuts or being worth anything close to what they used to be.

And then the virus panic hit and all small biz retail in the big city just went poof with very little of it coming back. Show of hands - who wants to risk their capital on running a small business in the big city after everything the government bureaucrats have done? So all of that commercial real estate now has an essential value close to zero too. Demand for office space has gone away, companies have figured out they can get their worker bees to pay for office space instead of them. All that is gone for good.

Well, you know how the 2008 crisis ended, with a tsunami of printed money. You also know how the latest crisis ended - with a tsunami of printed money.

Prepare to drink from the firehose once again. Whether you want to, or not.

and goalpost moving.

[(Anonymous)]

"...and goalpost moving."

Archilles and the tortoise, anyone? ;)

Summarized in three panels

[pchelovod]

(Dilbert from December 13, 2008)

Long title for a broad category of people

[the_copper_dragon]

Welp I honestly think that's Deaths job to take care of otherwise it fall under "General f***ery by those too slow to correct themselves in time and resort to accepting the mark/eating the fruit of the Tree of Knowledge of Good and Evil, during a Revelation/Depression/Collapse.".