Higgenbotham's Dark Age Hovel

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Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sun Sep 06, 2026 5:53 pm

The Buffett Indicator
US Total Stock Market Cap divided by US GDP. Warren Buffett called it “probably the best single measure of where valuations stand at any given moment.”

Current value
241%
https://buffettindicator.org/

This is the highest value ever. For comparison, at the 1982 low it was 32%. The people at dshort.com are looking at a number of valuation measures and coming up with an average 156% overvalued.

That's not the whole story in my opinion. GDP since 1982 has been strongly dependent on debt growth. So in 1985, when the country was concerned about debt growth, it had just surpassed $1 trillion. Now there is some talk about it passing $40 trillion and inflation adjusted that may be up 10 fold or so. In a true economic boom, there's no need to grow your debt 10 fold; you just pay it off and retain some surpluses. The Buffett indicator shows an 8 fold growth.

The part no conventional analyst will consider is that GDP can fall. They just can't conceive of it. The other piece is profit margins. Now this sounds off the wall, but with so much misallocation of capital over the past 50 years GDP can easily fall by 2/3 and profit margins by half. That gets the stock market to the 98% loss vis a vis 1982 valuations on the Buffett Indicator.

That reminds me of a quote I put up on this board by Hugo Salinas Price, the Mexican billionaire and founder of Electra where he said
Higgenbotham wrote: Sat Oct 19, 2013 5:32 pm
I think that we're going to see eventually a series of bankruptcies. And I think that the rise in the interest rate is probably the fatal sign which is going to ignite a derivatives crisis that is going to bring down the derivatives system. There is something like a quadrillion of derivatives and most of them are interest rate derivatives. The spiking of the interest rate in the United States may set that off.

--Hugo Salinas Price (transcribed from the link above)
At this point, anything could set off a series of bankruptcies. No rise in the interest rate is needed. Just a small perturbation somewhere that sets it off and I don't think anyone will be able to identify exactly what it was in retrospect.

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sun Sep 06, 2026 12:46 pm

Dent expounds on the coming crash. He's mostly right, but nobody will listen at this point. One area I think he's not completely right is on the size of the coming crash. He says it will go down as much as 95%. Probably as much as 98% is more accurate. I'm still slowly converting my double inverse into triple inverse. I did about 11 percent more last week.

https://www.youtube.com/watch?v=3oRNtmTE0gA

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sun Sep 06, 2026 11:15 am

The stock market is a dead man walking.

Overvalued by at least a factor of 10 and probably more like 50.
Higgenbotham wrote: Tue Feb 06, 2024 11:43 am Last night, I went through a bag of old hardware from the late 80s and early 90s. Nowadays, most everything is stamped Made in China, so I was curious as to whether I would find such a stamp on any of this old hardware. I did not. Most of the hardware items in the bag were not the type to be stamped (things like bolts) but of the ones that were stamped, all were Made in USA. They are shown below.

Image
The US economy was very much alive in 1985 but heading in the wrong direction. Now it is almost completely dead.

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sun Sep 06, 2026 10:40 am

Higgenbotham wrote: Sun Sep 06, 2026 10:05 am Gary North used to say we have Negatrends.
What were the 12 deadly Nega-Trends Gary North listed?

AI Overview

In his 1985 book 12 Deadly Nega-Trends (sometimes referred to or subtitled as 12 Deadly Mega-Trends), economist and Christian Reconstructionist Gary North outlined a series of systemic economic, social, and political threats that he predicted could collapse modern Western civilization.

The 12 deadly trends listed by Gary North include:

Inflation – The devaluation of currency and erosion of purchasing power.
Government Debt – Runaway national deficit and state borrowing.
Social Security – The financial unsustainability and eventual collapse of government retirement systems.
Third-World Debt – Heavy defaults from developing nations crippling global financial systems.
Bank Failures – Systemic insolvency within banking networks leading to catastrophic bank runs.
Taxes – Smothering tax burdens placed on citizens by expanding governments.
Unemployment – High long-term unemployment and underemployment.
Displacement – Economic disruption displacing industrial workers and families.
Illegal Immigration – Rapid demographic and financial strains on infrastructure and borders.
Government by Emergency – The expansion of federal and state authority through perpetual executive overreach and declared crises.
Local Economic Dislocations – Regional collapse of industries, leaving local communities completely bankrupt.
Climatic Change and Geopolitical Insecurity – Broad environmental shifts paired with global military instability and political fragility.

North argued that these threats were structural flaws in modern society, and he frequently used them to advocate for financial preparedness, survivalism, and a transition to gold-backed biblical economic models.
As I best recall, I used to get mailings from people like Gary North, Richard Band, Doug Casey and a few others. They were all of this genre and were selling newsletters and books. At the time, I was buying and rehabbing rental properties in the Midwest Rust Belt. I recall this particular mailer from Gary North (born in 1942 and now deceased) but not all the details. Probably now is the time to listen up.

In the mid 1980s more people in the US were concerned about Federal debt and deficits than today.
The government ran budget deficits in the 1980s, during the Reagan Administration, and Americans worried about them then too. In Gallup Polls conducted in the 1980s, just over eight in 10 Americans said the deficit was a serious problem, including about six in 10 who called it very serious.
https://www.cbsnews.com/news/polls-show ... -deficits/

So Gary could sell lots of books and newsletters in the 1980s because most people agreed with him anyway.

Image

Now is probably the time to be a lot more worried. I wouldn't be buying rental properties today either. Some of the ones I bought in the mid 1980s have recently sold for 15 times what I paid. That's way too high. There was very likely a lot of manipulation and fraud involved to get prices to that point in a basically dead economy. Probably 2/3 of that price increase is due to manipulation and fraud.

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sun Sep 06, 2026 10:05 am

The next question one might ask is whether the US is currently a psychopathic control system, or a pathocracy. The Soviet Union was, right? But is the US really? I don't think there's a clear answer to that one. We have Flock cameras today, millions of books being secretly destroyed by AI companies (obviously run by psychopaths), who knows what they will come up with tomorrow, but the trends are negative or as Gary North used to say we have Negatrends (as opposed to Megatrends).

What I can say at a minimum is that US corporations are by and large psychopathic control systems. And, like I said,
Higgenbotham wrote: Sat Sep 05, 2026 6:59 pm I think more important than this, because corporations are going to go bankrupt anyway, is the individuals who assume political control will tend to become more and more psychopathic over time. So people complain that Trump is a psychopath or more psychopathic than his predecessors (most often using different words) and that is arguable but you ain't seen nothing yet.
So when the corporations go bankrupt, the prisons can no longer be maintained, the police forces can no longer be paid, the ex military lose their disability payments, and so on, the psychopathic wells so to speak will empty out and try to assume political control because that's what they're going to be able to do best.

What will set the Negatrends into strong motion will therefore be the financial collapse.

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sun Sep 06, 2026 12:13 am

Higgenbotham wrote: Sat Sep 05, 2026 10:59 pm Psychopathic control systems appear powerful, operate stupidly and are also very brittle. The Soviet Union was maybe the best example so far of one showing itself to be brittle when it came apart. I expect this one to show itself to be even more brittle than the Soviet Union when it comes apart but time will tell.
Do psychopathic control systems operate stupidly and are they shown to be brittle when they come apart?

AI Overview

Yes, psychopathic control systems often operate with glaring, narrow-minded stupidity and exhibit extreme brittleness when they collapse. While popular media frequently portrays psychopathy through the myth of the "coldly calculating, omniscient mastermind," both neurobiological science and behavioral observations reveal that their control systems are highly flawed.

When evaluated as an information-processing or administrative "control system," psychopathy is plagued by systemic blind spots that inevitably lead to rigid, brittle failures.

1. Why They Operate "Stupidly"

The "stupidity" of a psychopathic control system stems from severe neurological deficits in how it processes risk, feedback, and long-term consequences:

Hyper-Fixation on Immediate Reward: Neuroimaging shows that individuals with psychopathic traits possess hyper-reactive dopamine reward pathways. Once they lock onto a goal (money, power, control), they experience a form of cognitive tunneling. They are essentially blinded by the reward and become incapable of properly weighing risks or altering their course.

Punishment and Threat Blindness: A healthy control system uses negative feedback (fear, anxiety, legal threats, social backlash) to course-correct. The psychopathic brain suffers from a disconnected amygdala-ventromedial prefrontal cortex (vmPFC) pathway. Because they do not accurately process threats or register fear, they repeat the same self-destructive behaviors over and over, entirely failing to learn from past mistakes.

Grammar of Social Exchange Deficits: They are fundamentally impaired in "precautionary reasoning" and the nuanced mathematics of mutual social contracts. Because they view all relationships purely as transactional zero-sum games, they fail to anticipate how their exploitation destroys the very systems that sustain them. This is fundamentally a form of strategic stupidity.

2. Why They are Fragile and "Brittle"

A resilient system is flexible; it bends, adapts, and absorbs shock. A psychopathic system is rigid and depends entirely on absolute domination. When that domination is disrupted, the system doesn’t adapt—it shatters.

Image

3. How the Collapse Manifests

When a psychopathic control system comes apart—whether it is a toxic manager being exposed, a con artist run to ground, or a domestic tyrant losing leverage—the collapse is notoriously messy and brittle:

Behavioral "Cracks": Under sustained pressure or prolonged exposure, the energy-intensive "performance" of being normal fails. Micro-expressions, stress-induced physiological changes, and erratic behavior quickly shatter their superficial charm.

The "Scorched Earth" Pivot: Because they lack the emotional toolset to navigate failure, compromise, or authentic remorse, their final failure mode is often highly destructive. If they realize their control is permanently gone, they frequently switch to a desperate, unhinged "destroy everything and everyone on the way down" mentality, which often results in their own total undoing.

The "Burnout" Phase: Statistically and clinically, as psychopathic individuals age, their high-energy, reckless style becomes unsustainable. Lacking a foundation of real relationships or adaptive coping mechanisms, their later lives often collapse into profound isolation, physical deterioration, and depression.

In short, they appear formidable only as long as they maintain absolute leverage. The moment that leverage slips, the structural rigidity of their psychology prevents them from bending, causing the entire facade to break instantly.

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sat Sep 05, 2026 10:59 pm

Psychopathic control systems are pretty easy to screw with because they're run by stupid psychopaths. If you're preferentially screening for psychopathy as most psychopathic control systems are, then a fair number of stupid people slide through. It was around the year 2000 that I working in one that had 4 layers of management in that local area: Director at the top, Manager below her, Supervisor below her, then technical employees like engineers and geologists at the bottom. I was an engineer.

The Director at the top was screwing with me through her chain of command and I figured out that it was her who was doing it. Behind closed doors I told my Supervisor that I hated her and it was personal. I made it appear convincing. I never let on to any fellow employees that I was speaking like this. To them, I was a really cordial and loyal coworker.

The organization had just come out with a stupid Violence in the Workplace Policy. The purpose of these kinds of things is to give management a tool to torture people they don't like.

So now my Supervisor had a problem. He had an employee who was saying things that appeared violent according to this stupid policy and he had to assume I was saying similar things to other people. If the Director found out somehow that I was saying these things and he hadn't told her he would be fired. So he had to go up the chain to his Manager and tell her who then told the Director (I am pretty sure of this).

I had a coworker next to me and one across the hall. The next thing that happened was the one across the hall came to me privately and said the Manager had come to him and asked if I had ever said anything violent toward the Director. I would describe him as empathically shocked. I did something like shake my head and say, wow, that is really crazy; these people must be nuts. Then same thing with the one next to me.

Next, I was talking on the phone to an engineer who had been a Supervisor at one time. It was a long conversation. We heard a loud click. He told me immediately that he knew what that was because he had been in management. He said HR just recorded our phone conversation.

Next, the maintenance man in the building reported to the head of HR. He told me he had gone into her office and she had been reading my email on her computer. They still couldn't find anything.

Next, I was sitting in my living room one day and saw Ameritech pull up to my apartment building. Most people still had copper lines at that time. He opened the box for all the phones which was on the outside of the building, did something, then closed the box and drove away. After that, I noticed my phone line sounded different. I was fortunate to have an old friend who loved to talk. I started calling him and discussed in general terms as you would to a friend in casual conversation all the illegal and rumored illegal things the management structure was doing in that place. In a couple weeks, Ameritech drove up again and opened the box, did something, and left and now my phone line sounded crystal clear again.

The Director was fired and Manager was retired after that. But we're talking years after that, not days or weeks. I quit the place long before she was fired. They were doing pretty much what the psychopathic control system wanted them to do, which is psychopathic from top to bottom if you want to call the Supervisor the bottom, but the kinds of things they were doing are supposed to be kept secret for decades and they weren't properly keeping a lid on things. I discussed a few years ago about how a bunch of stuff leaked out to the press, but I don't think I outlined the psychopathic control system aspects as rendered above.

Psychopathic control systems appear powerful, operate stupidly and are also very brittle. The Soviet Union was maybe the best example so far of one showing itself to be brittle when it came apart. I expect this one to show itself to be even more brittle than the Soviet Union when it comes apart but time will tell.

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sat Sep 05, 2026 9:58 pm

aedens wrote: Sat Sep 05, 2026 8:53 pm They stopped references longer than I can give a date.
It was 2017 that I told an employer I was leaving in no more than 48 hours. He told me that if I didn't give a 2 week notice that he wouldn't give me a reference. That was just the first thing that came to his mind to try to get me to stay. A psychopath will say anything; it's not like he was ever going to give a reference whether I gave a 2 week notice or not.

Re: Higgenbotham's Dark Age Hovel

by aedens » Sat Sep 05, 2026 8:53 pm

They stopped references longer than I can give a date.
Exempt employees are those who are not entitled to overtime pay under the Fair Labor Standards Act (FLSA)
because they meet specific criteria related to their job duties and salary, typically earning at least $684 per week.
They usually hold positions in administrative, professional, or executive roles.
If your not dead you had no excuse for decades.
As noted we had one code. Automate to prevent medical as RMI and install the code when one retired
since it was a unwritten rule if you do your next call in Factory Rep Contractor is In Guam genius.
Selective memory and the bathtub curve had one rule. Reality.
Actual Engineers to not mess around since guess who trained them in the real World also.
Had one who explained to me I was stupid. He made it 6 months and imploded on His own level two core values.
No smile, no malice, no lost time on My watch for my Men.
I had one rule. If I call you already failed as a Manager.
Two rules apply. Fear and Praise with back handed compliments with plenty of Diazepam for the other true believers.
We called them the Insulators. No feed back existed since all else are labeled mushrooms.
They where and are a tolerated disease since no one wanted to train any one else since
you do not mess with those who did produce and always on budget. If you did not listen it was clear to results.
You cannot capture culture as it develops or it goes.
HR turned into potted plants living on Airplane to reduce fiscal spending.
Last contact was stated your prediction what was going to happen is.
At least in that site specific malaise of the Educated. You cannot capture excellence.
Avoid those who compromised it.

Re: Higgenbotham's Dark Age Hovel

by Higgenbotham » Sat Sep 05, 2026 8:08 pm

Let's talk about psychopathic control systems. Let's say a corporation has an employee who is generating a lot of profits and has the potential to generate even more profits for the corporation in the future, or so it is believed.

Within that system there is a rule encoded into law that employment is "at will" which means that the employer and the employee both have a right to terminate the relationship at any time for any reason.

There is another employee who is thought to not generate much profit for the company and doesn't seem to have the potential to generate more profit in the future. So that employee is walked out the door without any notice and a notice then comes out that this employee has left to pursue other opportunities. No big deal, the employment relationship has been terminated under "at will" rules.

On the other hand let's say the other employee who is generating all these profits walks up the the employer and says I am terminating the employment situation right now and am leaving. The employer says, oh no, you can't leave yet. We are having an emergency meeting right now because we need you. The employer goes further, saying if you don't give us a 2 week notice and work it you will not get a reference. The employee says he is leaving anyway and walks out the door. The employer then states that this employee has "revenge quit" leaving them in the lurch and costing them tens of thousands, maybe even hundreds of thousands of dollars. Not a word about the solid performance that made them go into panic when the resignation was announced. Not a thought about the other employee that was fired or any concern whatsoever about either employee's personal situation. No thought whatsoever about fairness or equitability in the employer employee relationship. Only the thought that they have a right to control the body that generates those profits.

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