EXACTLY one year ago, Super Dunce called OPEC and demanded lower oil prices. Mother Nature was listening in on the conversation and granted him his wish to the tune of -$60/bbl this week at Cushing futures settlement...
One price war later - Mission Accomplished:
April 26th, 2019:
MAGA is a tale of exceptional arrogance ending exceptionally badly. A failed consumption oriented vacation from reality imploded overnight. Trump's half-assed response to this crisis will bring MAXIMUM health and wealth destruction to dedicated denialists. Those who cling to the ways of the past will suffer in measure with their addiction to failure.
Charles Hugh Smith penned a missive on Zerohedge yesterday claiming that this event bears no relation to any event in the past. He suggests that the 1973 oil embargo was the closest analogue. Unfortunately, nothing could be further from the truth. The 1973 Middle East oil embargo was the single greatest inflationary event in U.S. history. Oil shot up 400% in one year. This week, oil went negative for the first time in history. The early 1970s were also the peak period for U.S. labor protections, benefits, and inflation adjusted wages. The Trump era marks the absolute low point in the past 100 years for U.S. worker protections.
Here below we see that labor share of the economy peaked in the early 1970s, BEFORE women joined the workforce en masse. Think about that fact. U.S. households have lost ground even despite adding two incomes in most families. The 1973 oil shock is highlighted in yellow:
Now, several million people EVERY week lose their healthcare coverage during the worst health crisis in U.S. history, compliments of Trump's efforts to destroy Obamacare. He dismantled it so he could plunder the Treasury to the benefit of offshore bank accounts. The U.S. has healthcare costs twice the OECD average and obesity twice the OECD average, it's a recipe for mass extinction. And of course, Trump has lied about the economy for three years straight. Entering this COVID fiasco, the U.S. had the weakest late cycle economy in U.S. history. A Fed funds rate at 1.5% in February compared to 5% in 2008 and 7% in 2000 at the peak of those cycles. And a 5% of GDP projected deficit with a 2% growth growth rate. A recession at any other time in U.S. history. The resulting deficit driven 2019 repo liquidity crisis drove a late cycle manic stock market meltup. "FOMO" speculative appetite peaked in February of this year a full month after the Wuhan lockdown. The largest liquidity driven bubble in U.S. history right before the biggest crash in U.S. history. Intelligent people ask all the time, could Trump get re-elected in November? Of course he could. This country gets dumber with every passing day. Why? Because U.S. corporations want a dumb country. It's much easier to plunder a dumb country than an intelligent one. Which is why U.S. news is the lowest quality in the developed world. And why there are 2,000 TV channels and nothing worth watching. The libertarian movement never had the slightest chance of having a real following. The vast majority of Americans are wholly incapable of thinking for themselves. College is now just a four year self-bankrupting frat party.
As I've said, we must think for ourselves now. Another commentator, this time on CNN, decried this growing view that the COVID crisis is good for climate change. A climate activist, she claimed that this was not the way it was supposed to happen - at human expense. Sadly, Mother Nature doesn't give a flying fuck what we think. She saw the hairless monkey running amok, GOP consumption sentiment at ALL TIME highs in February of this year, a full month after the Wuhan outbreak, so she pulled the plug on these desecrators for MAXIMUM impact.
Here is where it gets interesting, meaning lethal. The past is gone. Now, less IS more. Those who don't get the new religion ASAP will merely be more carbon to be harvested. Corporations have failed the human race on a biblical scale. What I see next is a market crash on a magnitude that makes this prior crash seem trivial by comparison. And then, I see a bailout for the middle class, and no bailout for corporations. Meaning mass corporate defaults on an epic scale.
At that point, mythology regarding American capitalism will implode. FULLY. The public will finally realize that uncontrolled greed has destroyed everything.
Health AND wealth are now fully exposed. As Bernie Sanders explains, this fiasco has fully exposed the weaknesses of the American system.
"What kind of system is it where people today are dying, knowing they're sick, but they're not going to the hospital because they can't afford the bill that they'll be picking up?"
It's a joke. A lethal joke.
Post debt accumulation, the consumption oriented lifestyle will be a thing of the past. The global carbon footprint will be a fraction of its former levels. This "event" has done more to repair climate change than any ten climate conferences could possibly imagine.
This is a super cycle collapse, larger in magnitude than 1929. The 'b' wave that was the "longest bull market in U.S. history" was a fake rally based upon cheap debt and printed money. All of the poverty emanating from 2008 was monetized into cheap capital for please god, just one...more...bubble.
Now collapsing like a cheap tent.
