The main story told about Icarus is his attempt to escape from Crete by means of wings that his father constructed from feathers and wax. He ignored instructions not to fly too close to the sun, and the melting wax caused him to fall into the sea where he drowned. The myth is taken as a tragic example of hubris or failed ambition, and is often depicted in art.
TK asked me if I could help out this weekend, and put together an EP for Sunday. Apparently, he's all tied up in some dark, drab, dingy basement, somewhere in New England, doing God knows what. Whatever it is, let's hope it's rated triple XXX for his sake.
Being the true blue Slope-a-Dope trooper that I am, this is what I replied to him:
"Sure, anything for you maestro, I'll try and put something together, but it may not be any good. You do realize that I require genuine idiotic inspiration, which plays a very crucial roll in what I do. After all, I'm an artistic dyslexic Idiot Savant, not some crude U.S. grade butcher, and my French Evil Plan's aren't fabricated on-demand like some cheap American made wienerschnitzel!
So here it is, Mr. Knight's requested on-demand dirty water dog EP, served up as promissed with extra ketchup. For those of you that may not be familiar, a "dirty water dog" can be found on most any NYC street corner. It's a hot dog link bathing in murky tepid H2O, that some foreign freak forks out of a small, deep, unsanitary metal container, embedded in his dilapidated push cart. You then have the choice of four basic condiment toppings, which are delivered from equally dubious receptacles; artificially colored, bright yellow mustard or blood red ketchup, putrid green relish, and wet stenchy Sauerkraut, which are then slopped onto a month old stale bun, the wholesale generic brand variety. Enjoy Mr. Mayor!
As you all undoubtedly know by now, I hopped onto the nominal Icarus bus some time ago. I must say, I was certainly fortunate that the express came along when it did, to pick me up before the dreaded local showed up. So what's the next stop you ask? Well, it sure seems like the bumpy ride towards the sun is not done.
My best guess, is that we will continue to slowly ascend towards the fiat fairy tale heavens above, relentlessly climbing towards 1550 SPX. We may even reach new all time altitude highs of SPX 1570 or more. As I have said again and again, the captured capital markets con presses on regardless, and will continue unabated, until the real economic destruction on the ground is so undeniable, that they can no longer perpetuate the con. That is clearly not the case yet, so onward and upwards we go.
Don't get me wrong, we will most certainly experience further turbulence during this slow motion crack up boom, on our way to the inevitable exploding sun-flare inferno. Earnings could be bumpy, Europe will be shaky, MENA could heat up, China may stumble, just to name a few possible disruptive air pockets.
But the real trouble will come late in Q1 of this year, when the USA debt ceiling / budget cuts are once again front and center, where they belong I might add. That my friends, may well be the first straw that stirs the looming bond bubble bust. Keep in mind, that the U.S. bond market is currently sitting at staggering 250 year highs, while the equally over inflated U.K. bond balloon floats along at a mind popping 300 year high. As they say in the english American vernacular; "something's got to give". All we need is a tiny pin prick. Speaking of pricks, the mindless pinheads; Obonga, Pelosi, Boehner, McConell, Reid & Company, could definitely provide the necessary needle to pop the slop.
Here lies the coming moment of absolute truth. The Beltway freeloading fools, will expose to the world, that they have no real way to cut spending without taking the real economy down with them, and once again will be forced to raise the debt ceiling, this will be viewed as complete abject failure, and near total capitulation to the debt avalanche heading towards us, at an ever increasing rate of speed. At which point, the entire planet will finally realize that the emperor has no clothes whatsoever, and that, my fellow Slope-a-Dopes, IS the critical moment of truth where all goes pooooof! U.S. Government Bond Rates go BADADOOM! All hell breaks loose. You simply can't print your way to prosperity, same as it ever was. No free lunch, it just doesn't work that way. We may have passed the the faux fiscal fart, but we will choke on the coming debt ceiling diarea debacle.
William Buckler of The Privateer fame, has this ominous warning for us all:
"The fiscal cliff has been moved ahead in time by two months. Meanwhile, the Treasury is presently once again in “extraordinary measures” mode with the debt limit having been hit on the last day of 2012. Nothing daunted, stock markets have roared into 2013 with their biggest first week of the year gains in a long time.
As we mentioned in our Global Report though, a HUGE warning sign has been erected in the secondary market for US Treasuries. As The Privateer pointed out in our previous issue, yields on 10-year Treasury paper had never remained below the 2.0 percent level for any length of time until April 2012. Since then, they have not been above 2.0 percent. On the secondary market for Treasuries, there have been three peaks above the 152.00 price level since April. They happened on June 1, July 24 and November 16. On January 4, 2013, the “market” closed at 144.50. That’s an established “triple top” on an almost 32-year-old bull market. And THAT puts the “full faith and credit” of the US government in great danger."
While we are on the topic of bursting bubbles, be sure to keep a sharp needle eye on jittery, jolting Japan, and their new prime minister asinine Abe, also known as, Helicopter Kamikaze Shinzo. He may turn out to be the super sushi sea-urchin pinhead that finally strikes the match, which will ignite the run away inflationary currency devaluation incendiary tsunami. The Jap bug may have found the windshield……Splat!
This Roman Catholic Idiot Savant will be preparing his "all in" short play around the Ides of March! In the mean time, enjoy the bubblicious market madness……….Evil Plan 103.0