Conspiracy to Keep Market Bubble Going

In this video, Roger Kubarych, a top CFR guy, sez that the economy is horrible but that won’t stop them from continuing to blow up a stock market bubble.

If you don’t know what the CFR is, make sure to read the “Alternative Perspective” section of this Wikipedia article.

I agree completely with the way Kubarych described job layoffs: “ruthless.”

Note: the Wikipedia paged linked to above mentions Carroll Quigley’s book, “Tragedy and Hope.” I have a copy, and it is excellent. I have also discovered that one of the first articles that John F. Kennedy, Jr. published in his George Magazine was “The Quigley Cult”. I can’t find a copy of that article online – not even in the archive of the author’s (Scott McLemee), own website. I reckon the conspiracy took issue with the article…

14 thoughts on “Conspiracy to Keep Market Bubble Going

  1. SPX pattern still a bull. Uptrend line is in
    the 980 area. Needs to be broken to change
    character. The next important market trend
    change date is 9/14-15.

    Pray that you’ve had a complete recovery.
    Everything is back to normal…and all is
    well. Take care.

  2. Good catch, Matt. So one talks to the council on foreign relations when one wants an indepth analysis of the unemployment report? Interesting.
    Heard the logic Kubarych uses from a senior IB yesterday – bubble on until things will work out, as they always do…

  3. Matt,

    i love your chart and hope someday it can be brought back. it is amazing what the big shots will do… sorry to see they used your material improperly. THANK YOU FOR SHARING THE CHART AS LONG AS YOU DID.


  4. paula,

    Good to hear from you. I’m recovering well, thanks. Not there yet but should be in a few more weeks. That operation fooled me big time.

    Hope all is well with you and yours…

  5. Yerk – nice catch. Speaking of appropriation have you ever noticed how many times people from BigPic to the NYT grabbed CalcRisk’s chart of the job comps w/o recognition. Mauldin is still using a Housing vs GDP chart he did years ago but stopped (as am I). Anyway I was going to point to that chart – this is going to go on for a while and the extent and status is still not being widely appreciated. Par of course.

    Just got my own longish (very) collection of where’s the economy at that might be helpful. Don’t usually point to it for you folks but it’s the weekend and it seems OT for the bottom of the cliff and the hoped for jobless recovery.
    Bon Appetit’…comments and feedback welcome. Steal a chart if you like…all sorts of folks do.

  6. dblwyo, thanks for your update. My feeling is there is an overlay of a regular business cycle downturn and a dip in the long-wave. Whilst the first can be fixed by policy, I don’t see that as a possibility for the second one. There is a lack of solid investment opportunities right now – at least in Germany. You’re stuck with overcapacities in traditional industries and govt programs inflating demand in growth sectors like wind. An U shaped recovery cannot happen unless this gets fixed. Also insolvent banks and resource constraints have to taken into account. To sum it up, we are far better at fixing the fast cycle (aka the great moderation) than embracing the opportunities of the long cycle change.

    Your chart “economic wheel of life” do you have related materials – I’d like to read more about it.

    Lack of appropriation is annoying – it does not reflect well upon those doing it as the ones in the know usually know the original source.

  7. Yerk – in reverse order. Oh yeah…but funny once you get over the wounded amor prope! Friend forwarded a chart on logistics works in the extended enterprise a couple of years ago that was “borrowed” from my work in the early ’90s w/o attribution. Last couple of years several bloggers have “borrowed” – some w/ and some w/o and some w/o and not to sensible a links.
    “Wheel of life” – welcome to my “theory” of macroecon. I’ve slowly been mining my backlog of blog posts to create mini-essays on Scribd (Auto Industry complete and 2 of 4 Finance Industry collections) but haven’t gotten done with business cycle and credit market stuff. Dribbling slowly. Best I can for you now is to point you at the blog archive on Economy…earlier on there’s a series on business cycles, indicators and high-frequency indicators. Sorry. Krugman’s long story in the NYT Magazine is well worth your time though. VERY well worth.
    Try these three posts on the Wheel though:

    Hope that helps.

  8. Yerk – to continue…on the cycles plus/minus the long wave we’re roughly on the same page. Lots more we could kick back and forth but that’s the essence. We’ve got a cyclic downturn which’ll be made worse because it’s driven by a financial crisis combined with secular downtrend where recoveries have been weaker and weaker. We got out of the last on the Housing ATM. Now we’re going to live de-leveraging, balance sheet re-building and consumers becoming savers. Which btw changes the worldwide demand patterns enormously.

    On top of which we have NBT Syndrome (NBT=Next Big Thing). I did some foolin around work on long-term innovation cycles and was able to show how they associated with the famous 17/18 year market cycles. My best guestimate is that we’re at least a decade away from the next big wave of innovation, or more. Fortunately or not all my stuff on NBT, innovation and outlooks has been put together in one long downloadable essay collection on Scribd:

    BtW – you’re keeping odd hours. Where are you located? Me I just woke up too early.

  9. dblwyo, many thanks for your links. I’ll dig into them over the next days. It seems we have a very similar understanding – which is not mainstream. I read Krugman’s piece but this leading nowhere imo. Economist’s self-referentialism had them miss the plot and now they go back wards. Confusing. Also, he is ignoring Austrian economics, Hayek and then the Freiburger Schule which never got translated into English but was the foundation for the German recovery after the war. Here’s noon btw so no odd hours 😉

    Between Stalingrad and Kursk there was the third battle for Charkov – which might well fit into your historic picture. Like stimulus gone over the top…

  10. Yerk – point on Cherkov taken. Pushing the limits of beating a metaphor to death and citing Wiki timeline to try and contain the collateral damage.

    Your point on Krugman’s story is fair but it’s more important than you give it credit for. That’s a declaration of war and, despite the errors, it’s still the best there is. The real breakdown came when Leijonhuvd id’d Keynes economics as being about dynamics and disequilibrium. They tried but didn’t have the concepts, math or micro-foundations so Lucas got themselves all wrapped up protecting their rice bowls.

    If you’re gonna go Austrian also go Scandi – Wicksell Not that far out of line though. Hicks was brought up on Wicksell and knew the Austrians well. He wrote 2 (3) great books ala “Capital and Time”. He’s also the guy that formulated the standard IS/LM framework which is still conceptually the best we’ve got but it requires judgment and real world knowledge instead of worshiping at the alter of elegant math models that are sterile.

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