Generational Dynamics Forum - New Site

Posted: **Sun Jun 22, 2014 7:44 am**

Capex and opex is running its course H for many.
Cluster groups dynamics will and are stabilized for now.
Remember my friend not all have eaten there seed corn
on capital. Even if, or when it slows even 20 or 30 percent
the smart children have already prepared. To be blunt we
made hay when net working capital was stabilized and secured
thinking groups. The kids will be ok until 2018 contracts renewals perks
up and another round of measures with thinking partners to provide essential
needs for many people on many levels. No one said it was
easy either.

Key metrics will water, wheat, weather.
I still feel the key is removing from government all over 12 years in service
as we know the enclaves will sooner or later find out they are not special.
The issue still is the induced brain rot of legal and illegal substances.
The key will be lower the legal drug taxes to eliminate the illegal cartels.
To be blunt if they could launder there cash by now as in the eightys the
markets of human capital will do just that.

Posted: **Sun Jun 22, 2014 9:47 am**

: Extreme.png (35 KiB) Viewed 6160 times

The important part of the graph is the purple section down at the bottom. There, it can be seen that the sentiment is like no other time except for 1987.

That's where the similarity ends though.

In 1987 the optimism was based on the idea that the economy was going to boom for a long time. In 2000, the optimism was based on the fact that there was a new technology, the Internet, that was going to change the world. In 2007, the optimism was based on the idea that through housing the American Dream had become accessible to all. During all three of those time periods, the economy was growing and employment was strong.

In 2014 the optimism is based on the idea that the Fed will not allow the market to fail, that socialism will save the market. The economy is in fact shrinking and the evidence is plain to see. First quarter GDP was revised down to minus 1.0% and a further downward revision is widely expected this week.

The fact that socialism has been embraced by the former free market as to what will save it is dangerous, more dangerous than any outside threat that the US has ever faced, more dangerous than the Soviet threat of 1987.

Not only that but, outside the scope of the market, US civlization is crumbling by most measures - maintenance of roads as was recently pointed out, for example. The only exception I can think of off the top of my head is oil production.

Under those conditions, I would expect the collapse can be quite rapid because in reality the only thing holding the stock market up is faith in socialism, which is not a sound underpinning for a former free market system. Not only that, but the market is showing more faith in socialism than it showed for the actual growth eras. That can be demonstrated by almost any sentiment survey, not just this one. So my prognosis is that the stock market could in fact collapse back to 1987 levels in as little as a few days. It's impossible to say of course but there's really nothing there to hold it up, besides faith in socialism.

The other thing probably worth mentioning is at the rate the adjusted corporate profits declined in the last quarter, adjusted corporate profits will be below 2008 levels in about 6 quarters if that rate of decline continues. Normally, though, a decline accelerates as it gets going.

Posted: **Sun Jun 22, 2014 11:23 am**

The Wall Street Journal wrote:The High Price of Obama Fatigue
The IRS isn't Watergate; it's worse than Watergate.

With 2½ years left in the Obama presidency, it is at least an open question what will be left of it by December 2016. Or us.

http://online.wsj.com/articles/the-high ... 1403139022

Posted: **Sun Jun 22, 2014 11:23 am**

http://finance.yahoo.com/q/ta?t=1d&s=XI ... c=vxx&ql=1

Posted: **Sun Jun 22, 2014 11:28 am**

Higgie said "I would expect the collapse to be quite rapid"

What is your opinion to what happens after a rapid collapse, not just in U.S., but globally.
Does a financial collapse occur rapidly too, such as there would be no online banking, no auto-deposits, no social security, no pensions, that all electronic transactions would freeze?
Or would the governments attempt to prevent civil unrest by allowing token ATM withdrawals, and to continue welfare payments and food stamps?
Does a rapid collapse also indicate a transportation stoppage of food, clothing, and other shipments worldwide?
Or perhaps some combination of the above?
Thanks.

Posted: **Sun Jun 22, 2014 11:50 am**

bluebird wrote:Higgie said "I would expect the collapse to be quite rapid"

What is your opinion to what happens after a rapid collapse, not just in U.S., but globally.
Does a financial collapse occur rapidly too, such as there would be no online banking, no auto-deposits, no social security, no pensions, that all electronic transactions would freeze?
Or would the governments attempt to prevent civil unrest by allowing token ATM withdrawals, and to continue welfare payments and food stamps?
Does a rapid collapse also indicate a transportation stoppage of food, clothing, and other shipments worldwide?
Or perhaps some combination of the above?
Thanks.

What I meant by that is for example in 2007-8 it took about a year after the 2007 high for the stock market to crash. The whole process took about a year. This time it seems possible that the collapse in the stock market can be rapid, that what took a year before could happen in as little as a few days.

Your question then pertains to what would follow that and how soon it would follow. My guess would be that within days at most, all the electronic transactions would freeze, as you stated. Soon thereafter, within another few days, the supply chains worldwide will be disrupted due to the lack of critical components. I'm basing that partly on the fact that, in 2008, that situation was days from occurring, according to some. I'll find some quotes. Factories will shut down and once that happens retail will shut down after that. There will be a lot of chaos for a few months. Then I think at some point, things will stabilize and some order will be reconstituted. It would be hard to say how or where. If things get real bad it could just be within local areas, like at the city or county level and that would be the end of the first leg down. Some sort of stability would return for a few months or a few years but at a lower level of organization before the second leg down occurs, probably due to another cause than the stock market collapse, like a pandemic or a war. My guess would also be that the first leg down will be the end of the stock market and the Federal Reserve.

Posted: **Sun Jun 22, 2014 12:09 pm**

Higgenbotham wrote:I'm basing that partly on the fact that, in 2008, that situation was days from occurring, according to some. I'll find some quotes.

This is from a person who works as an engineer in a semiconductor plant in Asia. I read anything he writes pretty religiously. These are blog comments and a search can find this comment. I usually copy the blog post and paste it into a document program so I can search his comments.

This is a sample comment. I do remember he said somewhere else that they were within days of shutdown in 2008 due to this kind of situation (and I will look for that).

Making semiconductor, yes, it is a very resource intensive product. We use a lot of water and electricity (really really a lot). We use a lot of exotic stuff like Indium, pure helium and other gases that no one in the main street knows. We use gallium arsenide and many other chemicals and rare earth just to make chips for mobile phones and game consoles. The machine that makes these chips uses ceramic parts that is very pure and very difficult to manufacture. We use ultra-pure water that requires fantastic filtration systems. We use diamond tipped blades to cut the wafers. We use specialty adhesive to bond the chips to the products. We use extremely precise parts like mass flow controllers (that has dual use in uranium enrichment) in our equipment. Our O-rings has space age materials and one 20-inch diameter o-ring may cost USD2000.

Do a Google search on GALDEN coolant that we use in our chillers. Galden is also used in the NASA space program. Do a Google check on EKC265 and see why Dupont is charging semiconductor companies thousands of dollars just for a few gallons of these liquid. Even in good times, the lead time for these materials are long and the supplier wants a forecast so that they can prepare for us. You cannot call them and say I want 10 bottles now.

With all the exotic materials and part, think again on where the manufacturer source their parts to make these exotic materials for us. Think of their supply chain that is so long and also the supplier’s supplier. Think of the proprietary materials that they know only. Think on where to get Indium and gallium when the quality of ore is getting worse. There are tens of thousands of parts that can spoil in the semiconductor factory.

What I have said the last 6-7 paragraphs are for the SEMICONDUCTOR CHIPS that goes into the controller and not the entire wind turbine or solar panel. The skills required to change the parts is another story. When TSHTF, do we still have the skills? Anyone knows how to change the inverters of a solar farm? Anyone can get a crane and climb up the wind turbine and see which part to change. Without the skills, no one dares to climb up or change any parts.

Remember, like the semiconductor factory or a modern car, one spoilt part or busted bearing (made with futuristic alloy that can withstand the stress and heat) and that machine cannot be used.

Tell me how we can manufacture semiconductor chips (which are so pervasive in our life) if any of the supplies mentioned above is gone. As far as I know, there are no substitutes. I stand to be corrected. Anyone out there, let me know if I am wrong.

It seems likely to me that the first leg down will shed the system of "free trade" that has occurred over the past 30 years or so and then some stabilization will take place. Each area where the political system reconstitutes will need to work to be nearly self sufficient and then have a nearly zero balance of trade after that.

Posted: **Sun Jun 22, 2014 12:35 pm**

http://ourfiniteworld.com/2014/05/29/co ... -the-past/

Posted: **Sun Jun 22, 2014 12:52 pm**

John wrote:http://ourfiniteworld.com/2014/05/29/co ... -the-past/

I think this is a good one to read because it gives ideas from various people, though their slant is more toward resource depletion. If the resource isn't in fact so much depleted (or maybe more accurate to say dependent on the financial system operating as it currently does to get extraction) as they seem to think, and the cause is a supply chain disruption, I think that changes the dynamics of how soon and to what extent the system can be stabilized and reconstituted. It might be at a ~1950s level rather than some time before that. Some people think we are heading straight into a pre-industrial civilization situation without stopping at any point along the way.

Posted: **Sun Jun 22, 2014 1:04 pm**

Thanks John and Higgie for the Gail Tverberg link. Much to read there and contemplate.

Generational Dynamics Forum - New Site

Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics

Re: Financial topics