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Apakah Anda Masih Rasional?

“What are the facts? Again and again and again – what are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the un-guessable “verdict of history” – what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!”

– Robert A. Heinlein

“What experience and history teach is this – that people and governments never have learned anything from history, or acted on principles deducted from it.”

– Georg Hegel

Saya sudah sering mengatakan bahwa bagi yang ingin mencari kebenaran harus mencarinya melalui media alternatif dan melalui para pemikir kritis yang objektif yang senantiasa berbicara berdasarkan fakta.

Sekarang bukan waktu yang tepat untuk berangan-angan atau berkhayal. Pada akhirnya, fakta lah yang akan berbicara.

Seperti dikatakan Heinlein beberapa dekade lalu bahwa masa depan itu tidak pasti sehingga fakta-fakta adalah penting agar Anda tidak hancur dalam ketidaktahuan.

Juga blog Monty Pelerin’s World baru-baru ini memberikan investor peringatan keras dalam tulisan yang berjudul Economics Cannot Trump Mathematics”, bahwa ketakutan ekstrim itu wajar:

“It is nearly impossible to convince people that an economic ending is likely, perhaps inevitable. It is beyond anything they have seen or can imagine. I attribute that to a normalcy bias, an inherent weakness of experiential learners. For many, accepting something that has not occurred during their time on the planet is not possible. The laws of economics and mathematics may shape history but they are not controlled by history.

The form of cataclysm and its timing is indeterminable. Political decisions continue to shape both. The madmen who are responsible for the coming disaster continue to behave as if they can manage to avoid it.  Violating Einstein’s definition of insanity, they continue to apply the same poison that caused the problem. These fools believe they can manage complexities they do not understand. We are bigger fools for providing them the authority to indulge their hubris and wreak such damage.”

Jadi bagaimana dengan Anda? Jika Anda benar-benar merasa hidup di dunia yang rasional, maka pastinya Anda membaca tulisan dari Jim Quinn di bawah ini, yang dipublikasikan pekan lalu dalam The Burning Platform blog:

“Bernanke has leveraged his balance sheet 60 to 1. Lehman and Bear Stearns were leveraged 30 to 1 when they collapsed. The 100 basis point move in rates over the space of two months has resulted in Bernanke losing $200 billion and effectively wiping out his $55 billion of capital.

Of course, in a corrupt regime accounting fraud is encouraged and applauded by the status quo. Just as the spineless accountants on the FASB buckled to threats from Bernanke and Paulson in early 2009 and reversed the requirement that assets be marked to market so the felonious Wall Street banks could fraudulently hide their insolvency, the Federal Reserve has decided their losses don’t matter. The Federal Reserve classifies their losses as an asset. Don’t you wish you could classify your 401k losses and your home value losses as an asset? The tapering bullshit storyline is just another attempt to distract the masses from focusing on the fact that Bernanke will never stop expanding his balance sheet because if he stops the financial system will collapse in a catastrophic implosion. The Ponzi scheme will continue until loss of faith leads to a scramble away from the U.S. dollar.

The insane amassing of debt since 2008 has put a final nail in the coffin of the ridiculous Keynesian theory, as the Federal government has increased annual spending by 35% over the last five years and the economy is still moribund. Our fearless leaders have driven the national debt from $7.8 trillion to $16.7 trillion in less than five years, a 110% increase. The country continues to add $2 to $3 billion of debt per day. Consider how insane it is that we now accumulate more debt in half a year than we did cumulatively over the first 182 years of our existence as a country. And our elected, or should I say selected, leaders, cheer on the intellectually bankrupt academics like Bernanke whose only solution to every crisis is to print moar and then lie to the American people about his true purpose, act as if annually spending $1 trillion more than we collect while knowing there are over $200 trillion of unfunded promises to fulfill is a reasonable and realistic way to manage the national finances. Any sane person knows our current path will lead to ruin. When you need to issue new debt in order to honor old debt, the end is in sight.

The insanity of our debt accumulation in relation to our pathetic economic growth is clearly evident to even an Ivy League educated economist or a bubble headed CNBC anchorwoman. Since 1971 nominal GDP has grown by a factor of 14. Over this same time frame total credit market debt (household, corporate, government) has grown by a factor of 32. Real GDP (even using the fraudulent BLS manipulated CPI) has only expanded by a factor of 3.5 since 1971. The exponential growth model is clearly failing, with debt going hyperbolic, while GDP has stagnated.

Clearly we’ve entered the final phase of our debt financed orgy of narcissistic materialism and self-absorbed avarice. The unsustainability of our course is a fact. Our society has gone mad en-masse but we are only recovering our sanity one by one. The global financial system is insolvent. A fractional reserve fiat money based system requires continuous growth or it collapses. The global banking system is overleveraged and real global growth is stagnant. Central bankers are not smart men. They have one response to every crisis – print!!! Bernanke and his fellow banker cronies are printing at hyper-speed in order to prop up the terminally ill mega-banks. Bernanke feigns confusion at the fact that his QE to infinity and ZIRP have only benefitted his banker puppet masters and the richest .1%, while further impoverishing senior citizen savers and the working middle class.

Staying sane in a society gone mad is not easy. Millions of people believe themselves to be sane, but they have really just adapted to an insane society, so they appear sane within the warped paradigm of that insane society. The truly sane people appear to be insane in an insane society. It’s enough to drive a man crazy. The immense forces of normalcy bias and social inertia have led millions to refuse to understand the mathematical certainty of the coming collapse. The worldwide banking system is like a great white shark that needs to keep moving or it dies. Exponential growth and continuous credit expansion have been the essential ingredients to expanding the American empire, but the growth has stopped, while the debt keeps growing. Infinite growth on a finite planet is impossible. As natural resources deplete and become more expensive to obtain, while the planet’s population continues to grow, the fractional reserve banking system and the nation states who continue to pile up trillions in debt will suddenly suffer a catastrophic collapse. We are in the end stages of a confidence game. Your government will not give you warning. We need to come to our senses one by one, until there are enough sane people to tip the scales in our favor.”

What Do the Charts Say?

Seperti yang diperingatkan oleh Adam Taggart dari Peak Prosperity dalam tulisannya yang berjudul Our “As You Wish” Markets Have Reached The Cliffs Of Insanity, bahwa dalam dongeng klasik The Princess Bride dikisahkanbahwa seorang pelayan cantik, Buttercup, memerintahkan seorang anak petani, Westley, melakukan sejumlah tugas untuk menguji kepatuhannya.

Tidak perduli bagaimana besar/sulit permintaannya, Westley hanya menjawab “As you wish” dan melakukannya. Buttercup akhirnya kagum dan cinta sejati pun tumbuh di antara mereka.

Hal yang sama dengan para investor yang jatuh cinta pada pasar modal, yang terus merespon harapan-harapan irasional mereka seolah dengan kalimat “As you wish.” :

Slumping GDP & Revenues

For example, U.S. GDP growth is awful it’s slow and getting slower. It grew 1.8% in Q1 (lower than initially thought) and now analysts are tripping over themselves in a rush to lower their target estimates for Q2; some to as low as 0.3% (Morgan Stanley).

Stock prices are based on assumed future earnings growth. If it looks like companies are going to grow their profits faster in the future, then stock prices should go higher. So, in an economy displaying sluggish/decelerating growth, math would dictate that earnings growth estimates should be handicapped by some factor and stock prices should moderate. But that’s not happening in today’s markets.

Similarly, freshly released Q2 company reports show that a growing number of the largest companies are missing their revenue expectations. And where revenue goes, so earnings (eventually) must follow:

Where Did All the Revenues Go? (Zero Hedge)

According to Deutsche Bank, of the 70 S&P500 companies reporting so far (excluding this morning’s GE EPS beat and revenue miss), 50 have beaten EPS estimates and only 20 of them have missed. As for sales revenue, just 37 of them have topped analysts’ estimates and 33 of them have missed. In reality the revenue beat % is also being skewed slightly higher by the stronger top line performance in US financials so far. If we strip aside US financials, the revenue beat: miss ratio is around 45%:55%. Coca-Cola, Yahoo, Intel, IBM, eBay, Google, GE and MSFT are just some of the household names that have disappointed on the revenue front so far.

One thing is certain: based on the one metric companies can’t fudge, the global economy is not only slowing down, but what’s worse, the hundreds of billions of incremental money created by central banks one and all, is not even making its way into the corporate revenue pipeline. For now, the “hope” strategy has worked (i.e., next quarter things will be better).

But this final fallback, which so far has only disappointed, will soon no longer work, when virtually every known accounting tactic is used up and there is nowhere else to go for EPS than where revenues have already been heading for the past two quarters. Down.

With the downward trajectory in corporate revenues, forward earnings expectations should be moderated from their prior levels and stock prices should adjust downward. But, again, that’s not happening in today’s markets.

Instead, like Buttercup, Wall Street is petulantly demanding rising prices, and the markets are answering: “As you wish.” Yesterday, July 18th, both the Dow and S&P 500 closed at all-time highs.

Indeed, the markets have been busy the entire past year making wishes for high prices so. And the pace at which these higher prices are being delivered has increased in the past month:

(source: Finviz)

The chart above shows that in July, the slope of price appreciation has become nearly vertical – completely ignoring the slowing GDP and revenue data. To borrow from The Princess Bride again, we’ve reached the Cliffs of Insanity:

Rising Oil Prices

But there’s more that’s making rising stock prices seem even more irrational at this time.

Oil, the master resource that greases the gears of the global economy, has been rising, too.

Today, oil briefly rose above $109 a barrel. It has risen over $15/barrel since early May.

When oil prices rise, the cost of conducting business rises. Therefore, corporate earnings decline. In addition, the price of gasoline rises, hurting consumer spending, which compounds the decline in corporate earnings. And the expectation of these lower earnings should lead to lower stock prices.

But as we see here, the S&P has powered higher during the upward march of crude prices:

Rising Interest Rates

To make matters even worse, interest rates have recently started rising. This will be a huge development if it continues, but rates are already 60% higher than they were a year ago and are sure to have a cooling effect on economic activity (as borrowing costs increase, resulting in less purchasing at both the wholesale and retail levels). Perhaps they already are, as reflected in the slowing GDP numbers above.


Just as The Princess Bride was a great fantasy, so is any convoluted rationale being used to justify the current elevation of prices in today’s capital markets.

What if we were to teleport in time to the beginning of the year and ask any impartial analyst what would happen to stocks if H1 2013 experienced:

  • A dramatic deceleration in GDP
  • Revenue misses at many of the biggest blue chip multinational companies
  • Sharply rising oil prices
  • A long-term trend reversal towards rising interest rates

The call would have been easy and likely unanimous: Stocks will go down. Or at the very least, enter a defensive “wait and see” trading range.

Of course, that’s not what’s happened. And the point here is not to bemoan the past, but to ask: What’s more likely to happen from here? A continuation of the same extreme outlying behavior? Or a return to relationships that have governed markets for centuries?

To help in your decision-making, Bank of America just reported that money is now entering the U.S. stock market at the fastest rate since June 2008 (right before the last big market crash):

Largest weekly inflow to U.S. equity funds since June ‘08 (note market value of S&P500 index, adjusted for float, exceeded $15 trillion for the first time ever today) Huge $20bn global equity inflows versus $1bn out of bonds.

That’s a classic signal that a market top is near. Money entering (or remaining in) today’s stock market with the blithe hope that the party will continue onwards may soon find themselves in the Pit of Despair:

At least the gold bugs will be happy to have the company.

Because to expect continued record stock prices in the face of the very fundamental headwinds discussed here is simply…

Di akhir laporan ini, berikut adalah sebuah gambar yang bisa membuat Anda tertawa, mungkin dengan lebar:

Terima kasih sudah membaca dan semoga beruntung hari ini!

Dibuat Tanggal 29 Juli 2013

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