Rabobank: “Markets Are, Across The Board, Totally Divorced From Reality. Facts No Longer Matter”

Featured Story

Make It So!

Back in the 1980s, there was a lot of discussion at my college about “post-modernism”. At that point, it was in a strictly cultural sphere. It meant different things to different people, but I personally found enlightenment in the example of Jean-Luc Picard, captain of the starship Enterprise. To be “post-modern”, I was told, was to be a cultural creation from beyond the modern era. The original Star Trek TV series had been modern (indeed, ultra-modern for the time), but it had clearly been based on pre-modern concepts, such as novels like Horatio Hornblower and Westerns. On the other hand, Star Trek: The Next Generation was based on Star Trek, and hence was “post-modern”.

Post-modernism today seems to be the next generation too. The encyclopedia of Britannica definition is: “…in Western philosophy, a late 20th-century movement characterized by broad skepticism, subjectivism, or relativism; a general suspicion of reason; and an acute sensitivity to the role of ideology in asserting and maintaining political and economic power.”

As the critics of post-modernism point out, it believes that it is not opinions that are multifaceted, but facts: there are no facts and those that assert there are do so from a position of power. Yesterday, for example, social-media lit up after a Tweet from a US teacher claiming that “2+2=4” was an example of Western imperialism and that there are other valid ways of looking at it. This was not a high-level maths reference to Gödel’s incompleteness theorems.

Obviously, the numerals expressing 2+2 =4 are Arabic, and the concept itself emerged simultaneously in ancient China, Persia, and India. We should all also know the chilling Orwellian reference to that equation from ‘1984’: and that when Winston Smith is tortured by the Party, and head swimming, so he can no longer see properly, is asked how many fingers are being held up (four), and Smith says he no longer knows, is told that this is a “good start”.  

So where do we get to post-modern markets? Well, as repeatedly stressed of late, markets are, almost across the board, totally divorced from reality. Facts no longer matter to them, almost as if they were not facts.

We have become used to equities ignoring that Covid-19 is still spreading wildly. Now they have to ignore that the WTO is being forced by scientists to admit the virus may be airborne and carried for tens of meters, meaning that any indoor venue or non-filtered office air-conditioning system is the perfect transmission vector for it. No 1- or 2-meter rule makes any sense if that is proved to be true. How will recently re-opened summer venues cope when we are all huddled indoors in perfect virus-spreading conditions? Yes, equities were down overnight, but not by enough to reflect that emerging fact.

Bloomberg today reports some members of the Trump White House have been pushing for the US to break Hong Kong’s USD currency peg by not letting HK banks used the USD, as punishment for Beijing’s imposition of the draconian new national security law. Yes, this is only some members, and neither Pompeo nor President Trump has apparently yet been given the option to approve. However, this is a nuclear bomb being assembled on the table in front of us pointed directly at Hong Kong and US-China relations…and the reaction in the Hang Seng today was to rise 0.3% at the time of writing.

Receive a daily recap featuring a curated list of must-read stories.

How can this be the case? Because we have post-modern markets. Don’t like facts? Ignore them, and do so knowing that central banks are using their enormous powers to over-rule them. The virus is airborne? So we will buy more assets! The HKD peg is under real threat, politically? So we will buy more assets! Truly, nothing means anything except what that power dictates.

As central banks and Jean-Luc Picard both like to say, “Make it so!

Except, of course, both are mere mortals. Picard just came back as a feeble old man in a very post-modern Star Trek series where he is treated by most of the cast as if he is an elderly parent trying to learn to use Skype for the first time during the lockdown. Moreover, as central banks divorce asset prices further and further from reality, so they help drive the political populism on the right and left that believes facts don’t exist and that all that matters is power. This was alluded to in a recent Martin Wolf op-ed in the Financial Times pleading with someone, anyone to fix capitalism before liberal democracy falls apart – without providing not a single concrete suggestion of how this can be done without neoliberalism doing so.

Meanwhile, if the core argument that the unthinkable on Hong Kong can’t happen as that would mean US stocks would go down (heaven forfend!), be aware that right up until the post-modernists run central banks, the central banks will be the full post-modern anyway. The Fed is not going to set US foreign policy, but it would have to react to it – so why not buy stocks if needed in a geopolitical crisis? Clarida yesterday said there are no limits to how much the Fed can buy, after all, even if he did not say stocks. But stocks, corporate bonds, junk bonds, mortgage bonds, government bonds – these are all just words, aren’t they? Rightly, and in more ways than one, think about the power.

Source: ZeroHedge

StevieRay Hansen
Editor, BanksterCrime

God often uses men who are not of the best moral character. Pharaoh, Nebuchadnezzar, Cyrus, Herod, and Trump (amongst others), to accomplish His will in events He orchestrates during human history. We either trust the sovereignty of God or we don’t. Nothing happens apart from Him…

The best index to a person’s character is how he treats people who can’t do him any good, and how he treats people who can’t fight back…

The Birth Pains Are Growing Stronger….

One of the signs of ruling class collapse is when they can no longer enforce the rules that maintain them as a ruling class. When the Romans started making exceptions to republican governance, it was a matter of time before someone simply decided the rules no longer applied to them. Perhaps the robot historians will consider Obama our Marius or Sulla. Maybe that person is in the near future. Either way, the rule of law is over and what comes next is the rule of men.

“Don’t piss down my back and tell me it’s raining.” Outlaw Josey Wales

Don't Miss

‘There Is No Monopoly Here:’ Tim Cook Welcomes Antitrust Investigation of Apple

By StevieRay Hansen

Speaking at the Atlantic Festival recently, Apple CEO Tim Cook discussed the antitrust issues that the tech giant is facing amongst a number of other…

Read More

Traders On Edge As Futures Fail To Rebound After Wednesday Rout

By StevieRay Hansen

US equity futures were subdued and European stocks rebounded from an early selloff as markets tried to stem the Wednesday rout sparked after a range…

Read More

WIrecard’s Business ‘Almost Entirely Fraudulent’, Auditors Uncover $1BN Loss, Report Finds

By StevieRay Hansen

Carmine Di Sibio, the international chairman of EY, said in a letter to clients published earlier thsi month that  while he “regrets” the firm’s staggering lapse…

Read More

How Big Banks Have for Years Engaged With Dirty Money, While the Working Class Struggle

By StevieRay Hansen

It Is the Elitist Way of Doing Things and the New World Order Will Even Be More Corrupt… The agency, which operates under the Treasury…

Read More

Deutsche Bank Trader Prosecuted By DOJ Was A London Gold And Silver Fixer

By StevieRay Hansen

This is just the beginning of corruption that will be exposed in the months ahead, more bankers will be headed to prison soon… ‘Beginning in at…

Read More

Stocks Suffer Longest-Losing Streak In Over A Year As Dollar Dump Continues

By StevieRay Hansen

Stocks are down for the 3rd week in a row – yeah we know!!! – leaving levered-call-buying RH’ers facing something they likely haven’t seen in their…

Read More

Ex-JPMorgan Trader Sentenced To 8 Months In Prison For FX Bid-Rigging

By StevieRay Hansen

Two years after former HSBC head of currency trading, Mark Johnson, became the first person to be convicted in a global crackdown of currency rigging…

Read More

Markets Will Crash within Days, Pull Out!

By StevieRay Hansen

But, but, but… The ‘very successful’ IPO of Snowflake now has everyone who bought after its release yesterday now underwater… The Nasdaq is leading the…

Read More

Peter Schiff: The Fed Set The Fiercest Wildfire

By StevieRay Hansen

Wildfires are raging out of control in western states doing millions of dollars in damage and disrupting countless lives. In a recent podcast, Peter Schiff…

Read More

A Staggering 84% Of All S&P500 Assets Are Now Intangible

By StevieRay Hansen

Last week, we brought you some of the latest musing from Bank of America’s Jared Woodard, who in the latest Research Investment Committee report discussed the reason…

Read More
Posted in

StevieRay Hansen

Leave a Comment