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

“We Worry About Armed Conflict”: Investors Are Suddenly Freaking Out About Post-Election Violence

By StevieRay Hansen

Earlier we reported that amid fears of election night chaos, the White House has been put on lockdown, and that according to NBC sources, beginning…

Read More

DoubleLine: Digital Currencies Will End The Dollar’s Status As The World’s Reserve Currency

By StevieRay Hansen

We most recently described the Fed’s stealthy plan to deposit digital dollars to “each American” during the next crisis as an unprecedented monetary overhaul, but more…

Read More

Peter Schiff: The Fed Has Never Been Right

By StevieRay Hansen

Peter Schiff delivered a key-note speech at the Virtual Investor Day Conference. He walked through the history of the Federal Reserve’s monetary policy over the…

Read More

Flying Blind: Clueless About Risk, We’re Speeding Toward Systemic Failure

By StevieRay Hansen

For all these reasons, the risks of systemic collapse are much higher than commonly anticipated. There’s an irony in discussing risk: since we all have an instinctive…

Read More

Crime Pays: Goldman Strikes $2BN Deal With DoJ To Avoid All Charges Tied To 1MDB

By StevieRay Hansen

Goldman Sachs is reportedly on the cusp of settling one of the biggest criminal cases involving a Wall Street bank since the financial crisis: According…

Read More

Futures Jump Ahead Of Tuesday Stimulus Deadline

By StevieRay Hansen

Bulls will breathe a sigh of relief that on the 33-year-anniversary of Black Monday (when the Dow dropped 22.6% on this day in 1987) futures…

Read More

This Is Not Sustainable, Were Watching What the World Is Now Calling the Great Reset

By StevieRay Hansen

(Reality–New World Order Pukes ) Our President Knows the End Is Near With the Current Financial Apparatus… The U.S. government spent more than $3.13 trillion…

Read More

Banks Are In Trouble: Wells Tumbles As Revenues Plunge, NIM Hits Record Low, Warns On Payment Deferrals

By StevieRay Hansen

If there is one constant during earnings season, it is that no matter what the other banks do, Wells Fargo will always shit the bed,…

Read More

No Stimulus, No Problem: One Bank Sees “No Armageddon” Without A New Stimulus Deal

By StevieRay Hansen

In recent weeks, many have opined – this website included  – that with the US economy careening into a double dip recession (or perhaps depression), it is…

Read More

The Pandora’s Box Of Fed’s Digital Currency Will Ignite An “Inflationary Conflagration”

By StevieRay Hansen

We most recently described the Fed’s stealthy plan to deposit digital dollars to “each American” during the next crisis as a unprecedented monetary overhaul, but…

Read More
Posted in

StevieRay Hansen

Leave a Comment