Is Merger-Mania-October the Classic Paroxysm before it All Comes Unglued?

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Something weird is going on – that’s all everyone knows.

October was merger-mania month with a pre-election surge during the waning days: five of the largest 11 US-focused Mergers & Acquisitions in 2016 were announced in the last 10 days of October, including two that broke all-time industry records.

The mania was topped off by two big announcements on Monday:

  • GE’s $25-billion acquisition of Baker Hughes. Since 2008, the M&A-meister, financial engineering specialist, and industrial powerhouse has gobbled up 51 companies of $1 billion or more in value.
  • CenturyLink’s $24-billion acquisition of Level 3 Communications.

In the prior days, three big deals made investment bankers salivate:

  • AT&T’s $85.7-billion deal to acquire Time Warner, announced on October 22, the hugest deal in the history of media, even huger than the prior hugest media deal ever, the AOL Time Warner deal that ended as a spectacular success along with the rest of the mania at the time. But Wall Street instantly refuted what everyone had been thinking from the very first moment, that this was most decidedly and in fact, doubtlessly, not the next AOL Time Warner.
  • Qualcomm’s $39.2-billion acquisition of NXP Semiconductors, announced October 27, the biggest deal in the history of the semiconductor industry.
  • British American Tobacco’s $46.9-billion acquisition of Reynolds American – the 57.8% it didn’t already own – announced on October 21.

This pushed US deal volume in October to $330.3 billion, the second highest month on record, after July’s $332.3 billion! And this comes after the all-time record year 2015.

It pushed global deal volume in October to $502 billion, according to the Financial Times, and to $489 billion, according to Bloomberg, which pointed out that October was the busiest month in 12 years (Bloomberg chart via Christine Hughes, OtterWood Capital):

This sort of deal making where billions simply don’t matter is eerily reminiscent of the last-minute frenzies in 1999-2000 and 2007, before it all came unglued. Everyone knows that after a record-breaking M&A boom, stock markets tank. The only thing no one knows is when this will happen, when the M&A frenzy will go into its final paroxysm and collapse.



Everyone is trying to come up with their own theories to predict this event and put a timeline on it. One thing is a given: Never in history has there been that much central bank manipulation; never have there been $12 trillion in bonds that traded with a negative yield; never have central banks printed so much money. It’s a new era, and none of the old models will work. Something new and unexpected will be taking place instead.

But the red flags keep cropping up. According to TrimTabs Investment Research, cited by USA Today, US companies committed $105 billion in cash (in addition to stock) to pay for these takeovers in October, beating the prior all-time monthly record of $97.5 billion set in October last year:

“The flurry of cash mergers is a cautionary long-term signal for US stocks,” TrimTabs CEO David Santschi told USA Today. “Cash merger activity has a tendency to peak around market tops.”

Have cash mergers, and M&A in general, peaked in October? Or was it just another record on the way to more records? Something weird is going on – that’s all everyone knows.

And then there’s the lag time between the record-breaking mega merger data that blows a hole into the ship, and the sinking of the ship. The lag could be a year or longer.

For example, last time: Private equity firms KKR, TPG Capital, and Goldman Sachs Capital Partners announced in February 2007 that they would acquire the Texas utility TXU; the deal became final in October 2007. It was the biggest, most leveraged, craziest buyout ever, and it would ultimately collapse into bankruptcy. With hindsight, it was the final deal-making paroxysm. The stock market turned south the moment the deal became final, at first in a very casual manner. It took another 11 months before Lehman imploded and all heck broke lose.

None of the October deals are “final.” So if October is the peak in deal-making, as some are saying, then the timeline starts now, and goes for maybe 12 or 15 months before it all comes unglued again.

But it assumes that this time will be like last time. Yet, this time will not be like last time. Nothing will be. Central banks have seen to it that something different will happen, and that it will happen differently, on a different timeline and scale, with far more debt and derivatives than ever before, and a far greater willingness by central banks to muck it up even further.

We know one thing for sure: This M&A frenzy will lead to record debt issuance mostly in 2017 to fund it all, assuming these deals get completed and things don’t come unglued prematurely.

So far this year, companies in the US have already issued $1.4 trillion in bonds, according to Dealogic, a record pace, to fund acquisitions and stock buybacks, rather than do something productive.

CEOs are driven to make these deals to offset slowing sales and profits. They need the benefits of “acquisition accounting” to bury inconvenient data deep underground. And they can do it because stocks – the currency with which they buy other companies – have been inflated, and because borrowing costs even for riskier companies are artificially low.

Global bond offerings, at $5.8 trillion so far this year, are up 9% from the same period in 2015, which had been a record year. Everyone is getting nervous about the speed with which debt has been piling up even as the economy has been languishing.

“It is very analogous to 2005, 2006 and 2007,” explained Jon Duensing, deputy chief investment officer of Amundi Smith Breeden. “What happens to the markets when global interest rates start to move higher?”

Better not even think about it.

To fund the current M&A announcements, bonds and leveraged loans will pour into the markets around the world. They’ll be gobbled up by yield-desperate investors – institutional investors, such as fund managers – who no longer look at risks and cannot even imagine that they exist and who don’t even dream anymore of being compensated for taking risks, huge risks. They’ve been brow-beaten by low yields or even negative yields and infused with a bubble mentality that in this central-bank managed world, nothing can ever lose value or implode in the classic manner, and that if it does, it’s just other people’s money that goes up in smoke and that it will all be “contained.”

But with QE and negative interest rates skewing every sense of reality, everywhere, no one knows how or where this might end up.

Why is this economy not yet in an official recession? Read…  What’s Really Different this Time: Business Investment Drops to Lowest September since 2010



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  72 comments for “Is Merger-Mania-October the Classic Paroxysm before it All Comes Unglued?

  1. william
    November 1, 2016 at 9:16 pm

    Conclusion: 12 months until a major crisis. Yet, any number of bubbles can deflate, pop, or continue to expand from now until then. My personal observation is recent mini-crashes of stocks like CYH and BKD signal a new trend, either in healthcare-related stocks, high debt companies, or both.

    • Maximus Minimus
      November 2, 2016 at 11:13 am

      You mean the hot air balloon is losing altitude? Time to bail out, but all I can see is a crocodile pond down below.

  2. Nik
    November 1, 2016 at 9:26 pm

    Aloha Friends…It has simply over the Last few years…Turned into an ‘Alice in Wonderland’ Mentality,Environment and Monetary ‘Circus’…so why in God’s name should any of it make SENSE..? The Rules can be Changed,Modified and/or Ignored at Will and Mr Wolf…do you Truly think that the ‘Rascal’s ‘ would recognize let alone Accept the ‘Day of Reckoning’ as it arrives…? lololol thanks for reading aloha

  3. Bruce Adlam
    November 1, 2016 at 9:52 pm

    Its no different this time the parasite (excessive debt ) will EVENTUALLY kill its Host ( the Economy )

    • Frederick
      November 5, 2016 at 1:04 am

      True true very true however the question remains of who will be their next host?

  4. Jonathan
    November 1, 2016 at 10:22 pm

    Can’t say I’m surprised with the Qualcomm/NXP merger. Consumers electronics has already been saturated and commoditized to death, and there isn’t going to be another huge and low-hanging fruit like smartphones did for these companies anytime soon.

    That’s why we are seeing asinine products like Internet connected microwave ovens: Because everybody has ran out of ideas.

    • night-train
      November 2, 2016 at 1:55 am

      Good point. Why do I want my washer and dryer connected to the Internet? My dirty unmentionables are my business. I don’t want Russian hackers to make them public. It does seem like new ideas are hard to come by, or that the thinkers are out in the high weeds.

      • Winston
        November 2, 2016 at 9:58 am

        And the huge numbers and even far grater numbers in the future of dumb “Internet of Things” devices now connected to the Internet enable this:

        21 OCT 16
        Hacked Cameras, DVRs Powered Today’s Massive U.S. Internet Outage

        https://krebsonsecurity.com/2016/10/hacked-cameras-dvrs-powered-todays-massive-internet-outage/

        A massive and sustained Internet attack that has caused outages and network congestion today for a large number of Web sites was launched with the help of hacked “Internet of Things” (IoT) devices, such as CCTV video cameras and digital video recorders, new data suggests.

        • Chicken
          November 2, 2016 at 10:29 am

          Toss some AI into the mix for additional pain and anguish. Self-assembly is the holy-grail we should be watching for.

      • polecat
        November 2, 2016 at 1:30 pm

        ……ever consider that the Russians might eventually end up producing better washers & dryers than the one’s currently made in the west ?? ….and without the IOT ….’;]

  5. nick kelly
    November 1, 2016 at 10:28 pm

    We have:

    Auto crisis: inventories at 90 days.

    Commercial real estate crisis

    Student loans- the largest ‘asset’ of the US govt is its student loan portfolio.
    How’d you like to try and flog that? Hint- skip Goldman, try the Germans.

    The state and municipal financial crisis- plus Puerto Rico, whatever you call it.

    Crash in rents and overbuilt condo crisis

    Energy crisis- not just frackers! See Exxon.

    Retail apparel crisis- a perpetual, but bubbling a little louder now.

    Fast food slow down- McD having probs

    The trapped Fed crisis- no more ammo

    And last but FAR from least- a burgeoning political crisis. If Trump was by some joke of the gods to prevail- more than one state may consider secession. It may be only de facto- he will simply be denied permission to visit on the grounds that security would be too expensive- which would be true.

    • Anthony
      November 2, 2016 at 2:40 am

      Don’t be ridiculous.

      If he fills stadiums now he will doubly do so as President.

      It will be like the celebrations across Europe at the end of WWII

      • November 2, 2016 at 7:25 am

        I think you misread just how divided America is on this current batch of candidates.

        • November 2, 2016 at 8:39 am

          Wolf,

          Respectfully I ask this : Have you done a simple arithmetic analysis comparing the size of Hillary’s crowds versus the size of the Donald’s ? I have seen many comparisons ( all in favor of Trump ) but no comprehensive comparative analysis.

          Something like the last 50 Clinton assemblies compared to the last 50 Trump assemblies. There’s a good prediction in those numbers . . . .

          Again, no disrespect intended, I am only interested in factual numbers.

          SnowieGeorgie

        • Frederick
          November 5, 2016 at 1:07 am

          I disagree with that divided thing Wolf You have to understand that it is the presstitutes doing the reporting and we all know how they got their nicknames right?

      • Alexander
        November 2, 2016 at 8:29 am

        If Trump DOESN’T win, the markets will have to deal with revolution in the United States; that revolution can not be priced.

        • Mary
          November 2, 2016 at 10:20 am

          I’m curious about Trump fans who make these statements. If Clinton wins, are you seriously prepared to take to the streets with weapons? Who are you planning to kill? Anyone you suspect of being Muslim or an illegal? Democrats?

          Seriously, I’d like to know what plans are behind such implied threats.

        • polecat
          November 2, 2016 at 1:37 pm

          …. but the revolution will not be googled …

          with apologies to Gil Scott-Heron ….

        • Smingles
          November 2, 2016 at 3:10 pm

          Yawn. Idol threats from the deplorables. Reminds me of the “I’m moving to Canada” liberals circa 2000, but far more dramatic… and pathetic.

        • Frederick
          November 5, 2016 at 1:08 am

          Alexander Bingo brother

      • November 2, 2016 at 10:44 am

        TRUMP FILLING STADIUMS ? ? ? ?

        I posted a comment at 8:39 this morning ( see below ) . I’ve been thinking about what I read across divers and sundry sites that I visit, many every day, and I would like to expand the comment I posted earlier :

        (1) How many of Clinton’s or Trump’s events have been canceled due to low attendance ? Due to miniscule numbers of interested people attending ?

        (2) How many of Clinton’s or Trump’s events have had overflow crowds, spilling hundreds or even thousands of people into the streets, outside of the event hall or stadium ?

        As I said earlier, there is a prediction to be found in the answer to each question proposed above.

        SnowieGeorgie

        • Doug
          November 2, 2016 at 11:22 am

          The money says otherwise on the political futures market and I trust where people place their money over what they say .Getting all your news from breitbart may make you feel secure but you still only see what you want to see.

        • November 2, 2016 at 11:52 am

          Interesting conjecture.

          I have never seen “brietbart” on TV – – or visited a “breitbart” site on the internet. I really do not even know what a “breitbart” is.

          You really should stick to facts at your disposal instead of making up stuff from the clear blue sky.

          Just sayin’

          SnowieGeorgie

        • Doug
          November 2, 2016 at 1:03 pm

          Here you go here is how the money is betting now , which of course can continue to change as a Trump victory has gone from .22 to .36 in the last week.https://www.predictit.org/Browse/Group/67

        • November 2, 2016 at 1:13 pm

          Thanks for the link — good stuff.

          So we will know in just one short week, whether (i) people using their feet and stored fat calories to MAKE THE EFFORT to attend a rally — OR — (ii) people ‘making the effort’ to bet their REAL MONEY on an online gambling site . . .

          . . . . . which is more indicative of their propensity to vote.

          In one short week. We’ll have to touch base then, at this same spot ( or as near as can be )

          Cheers ! ! !

          SnowieGeorgie

    • Ehawk
      November 2, 2016 at 5:50 pm

      What do you think will happen with a crooked President like Hillary… now that is all in the OPEN…??

      I’m really not political, but I’d think that the Pandora box has been opened.

  6. ML
    November 2, 2016 at 1:51 am

    So much duplicity, me too products and services, has created an over supply. Insufficient demand to cope with the supply can be overcome by merging and taking over businesses to prune duplicity.

    It is going to take some time before the pencil is sharpened to the point it is just about hanging by a thread.

    • walter map
      November 2, 2016 at 6:29 am

      “So much duplicity”

      While the word ‘duplicity’ (falseness) certainly works, I think what you mean here is ‘duplication’.

    • Jonathan
      November 2, 2016 at 7:46 am

      If you think about, there wasn’t any fundamentally groundbreaking technological advancement in the past 20 years too. Smartphones/faster Internet/Moore’s Law were just trivial and straightforward extensions to what we already have back then compared to let’s say, making a car fly. There’s so much “we will have this amazing X at Y years into the future” hype to distract us from that fact that our track record in this is getting increasingly uglier.

  7. Kasadour
    November 2, 2016 at 2:44 am

    Everyone is trying to come up with their own theories to predict this event and put a timeline on it.

    The event being that c-word— the last word in the previous sentence to the one copied above in italics. That scary word nobody wants to acknowledge as imminent. So, here is my own theory to predict the timeline of the event that starts with a c: The election of Donald Trump. Of course, this is only six days away, not 12 months. Is the election of Donald Trump the black swan event the FED is looking for to pull the trigger on Deutche Bank? If so, our only hope the might FED stay the execution of DB (and certain collapse with it) is that he win by a landslide.

    • walter map
      November 2, 2016 at 6:45 am

      “Is the election of Donald Trump the black swan event the FED is looking for to pull the trigger on Deutche Bank?”

      You could make that argument. You could also guess it will be the event that pulls the trigger on democracy in America, such as it is.

      Whoever wins, you should expect the next U.S. president to be impeached. Both major candidates carry more than enough baggage to sink them.

      • Kasadour
        November 2, 2016 at 8:15 am

        I certainly know what will sink HRC but I’m not sure about Trump. Enlighten me!

        • walter map
          November 2, 2016 at 8:47 am

          “I’m not sure about Trump.”

          You’re kidding, right?

          Sex abuse scandals, child sex abuse scandals, mafia deals, tax evasion, anti-trust violations, casino violations, labor violations, immigration violations, breach of contract suits, contract frauds, racial housing discrimination suits, tenant intimidation suits, Trump University frauds, Trump Foundation frauds, bankruptcy frauds, perjury investigations, frivilous lawsuits, embargo violations, election violations. He’s been a very busy grifter.

          Trump himself has confessed to felony bribery and felony sexual misconduct and is due in court after election day on child rape and racketeering charges:

          http://us.blastingnews.com/news/2016/10/donald-trump-will-face-charges-on-child-rape-and-racketeering-charges-after-election-day-001223129.html

          In addition to the criminal trials, your Republican candidate presently has 75 lawsuits pending against him and has amassed thousands over his career.

          http://www.usatoday.com/pages/interactives/trump-lawsuits/

          He may not be spending much time in the White House.

          Pubs hate him, Dems hate him. All very bipartisan. Vegas oddsmakers are giving him six weeks.

        • Earl Smith
          November 2, 2016 at 11:09 am

          High Crimes are whatever the House says they are. President Johnson was impeached for firing a government official who had House protection.

          Trump will be railroaded by Ryan and the RINOS working with the Democrats for the crime of enforcing the immigration laws and firing Education Dept. officials. And the Senate will convict him because the RINOS want Pence to hold the office instead of someone independent of the Establishment.

          You don’t expect the single party that exists to give up because of a lousy election do you.

        • Cathy
          November 2, 2016 at 12:17 pm

          Walter map,

          I’ve tried to find the lawsuit against Trump that you cite in the link you posted as few days ago. I have full access to Pacer and cannot seem to find it. Do you happen to know the case number or what court it is filed in, what year it was filed or who the judge is, who the plaintiff is? I would like to follow it.

        • nick kelly
          November 2, 2016 at 2:28 pm

          Trial for fraud re: Trump U begins Nov.28

  8. Dan Romig
    November 2, 2016 at 6:46 am

    I wonder, is Jon Duensing asking, “What happens to the United States’ (and many other nations’) soon to be $20 trillion national debt when global interest rates start to move higher?”

    At yesterday’s close, the 1 year Treasury Yield Curve Rate was 0.65%. On 29 January 2007, the rate at close was 5.12%. Do the math on that for a 20T debt, eh?

    • Robert
      November 2, 2016 at 11:50 am

      Yes, and that’s why they keep jacking up “Affordable” health care premiums 50%/year: they are taxes and not healthcare.

    • Smingles
      November 2, 2016 at 3:29 pm

      But… that’s not how debt works. You don’t all of a sudden pay 5+% on your 20T in issued debt.

      But to answer your concern, the Federal government controls the duration of bond issuance. 1 year rate is 5%? Issue 3 month bonds. Simple.

      To add to that, there’s nothing forcing the government to raise interest rates on issued debt, anyways. Look at Japan. Near zero for two decades. The Fed and Treasury dictate the supply and maturity of everything issued, not the market.

      Lastly, interest cost as a % of GDP was about 1.2% in 2015, compared to a post-WW2 high of 3.1% in 1991 (but don’t take my word for it: https://fred.stlouisfed.org/series/FYOIGDA188S).

  9. walter map
    November 2, 2016 at 7:39 am

    “So far this year, companies in the US have already issued $1.4 trillion in bonds”

    And that’s in a rotten bond market. Dummies.

    “CEOs are driven to make these deals to offset slowing sales and profits.”

    Partly. They’re also engineered to impress investors and consequently goose stock prices, in turn goosing CEOs stock-based compensation. But it’s to the detriment of the firm because the effect is usually temporary, because, as we know, up to 90% of M&As fail, and CEOs know that too.

    Our modern CEOs have become notorious for damaging the companies they lead in order to enrich themselves. Deutsche Bank is a clear example among several banks:

    http://www.spiegel.de/international/business/the-story-of-the-self-destruction-of-deutsche-bank-a-1118157.html

    This doesn’t mean M&A activity actually causes a financial market crisis by damaging companies. There doesn’t seem to be sufficient causation here, and companies, particularly banks, have other ways to get into trouble.

    But it does seem those “slowing sales and profits” which presage financial crises also motivate M&A activity, and the two are therefore are correlated in that way because they’re both caused by the same economic decline.

    Which does make excessive M&As something of a predictor for a meltdown. How accurate a predictor still seems unknown for now.

    Maybe if I put more thought into it.

    • Smingles
      November 2, 2016 at 3:30 pm

      That DB article is a fantastic insight into the downfall of a once staid institution.

  10. Ishkabibble
    November 2, 2016 at 10:05 am

    Wolf you have two gems that just have to be repeated time and time again.

    “One thing is a given: Never in history has there been that much central bank manipulation; never have there been $12 trillion in bonds that traded with a negative yield; never have central banks printed so much money. It’s a new era, and none of the old models will work. Something new and unexpected will be taking place instead.”

    and

    “………………with a bubble mentality that in this central-bank managed world, nothing can ever lose value or implode in the classic manner, and that if it does, it’s just other people’s money that goes up in smoke and that it will all be “contained.”

    But with QE and negative interest rates skewing every sense of reality, everywhere, no one knows how or where this might end up.”

    Ever since the TBTF banks’ economic/political coup in ’08-’09, I’ve known exactly where it’s all going to end up — exactly where the TBTF banks want it to end up — the TBTF banks, through their ATMs, their slave governments, military, police and “security” forces, will control all important aspects of human life on this planet.

    Of course this is the exact opposite of what should be happening — non-Elite human beings divorcing themselves as much as possible from the Elite’s private TBTF banking cartel.

    • Tom Kauser
      November 2, 2016 at 11:40 am

      It was going OK stock and bond vol. had died down. Siegel had called the bottom while Mark Haines scoffed!
      Bush had worked congress for two weeks begging for a bailout in every room of the White House and treasury had marched the tbtf bankers into a room to sign their banks freedoms away to treasury.
      Finally they got a deal and tarp was passed. After two weeks and a blank sheet of paper Congress approved of buying the banks own junk as an investor of last resort.
      Friday after the vote administration personal stood with Hank Paulson to thank the American people for their vote of confidence approving TARP.
      Hank Paulson announced that instead of buying the banks debt, he was going to give it straight to the banks!
      Robbery and personal vendettas was 2008 this time its just plain old looting ?

  11. Ptb
    November 2, 2016 at 10:19 am

    monetary policy is now infinite? Is there a tipping point out there somewhere ? Probably. But look at Japan. Central banks are reactive. Capital flows don’t indicate anything resembling economic growth. Over capacity keeps telling this story. It’s just financial engineering.

  12. Chicken
    November 2, 2016 at 10:46 am

    It’s a simple question in my mind. Based on what we think we know, are we headed in the right direction?

    • Ishkabibble
      November 2, 2016 at 11:02 am

      I hope your question is an ironic joke. If it’s not, GTHOH!

    • walter map
      November 2, 2016 at 11:28 am

      Depends. What’s your Despair Index these days? OTOH, if your goal is permanent global corporate totalitarianism, things couldn’t be better.

  13. Tom Kauser
    November 2, 2016 at 11:27 am

    A rule change that drained funds from the money market and 500 billion dollars of deals (all with severe anti- trust problems) and you are calling some kind of top?
    Until they stop rolling treasuries and/ or mortgage paper the fed still has the financial backbone to crush you again and again!
    A calming LIBOR and parabolic move in stocks? If everyone is scared shaitless of stocks who(m) are left to ruin the rally?
    Everyone can locate a lifeboat but no one what’s to be seen running for one?

  14. Doug
    November 2, 2016 at 11:36 am

    A surprise Trump election lets predict events the same as Brexit . Immediate devaluation of the Dollar by 20%. Interest rates rise as money flows out of the country in fear, we now get inflation as imported goods become costlier.Higher interest rates now prick all the bubbles and the market melts down . Stock market losses cause pension plans to start defaulting and people now have even less income .The fed now tries something drastic such as depositing money directly into peoples accounts .Lets get this party started .

    • walter map
      November 2, 2016 at 12:11 pm

      “Lets get this party started”

      A charming optimism, however unrealistic. How would you feel about a Trump dictatorship? He has more than enough of the right kind of popular support, opposing public institutions are in severe decline, and supporting institutions are in ascendance. A badly-timed (or well-timed) financial meltdown, as suggested by this article, could easily provide the needed trigger.

      Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.

      – John Adams

      • NotSoSure
        November 2, 2016 at 12:24 pm

        It’s not Trump. Democracy and big corporations can’t live together. Pretty soon you are going to say that Santa Claus exists and that the best things in life are free.

        Either way, karma exists and it’s time for US people to face the music.

      • Doug
        November 2, 2016 at 12:45 pm

        I believe you confused my sarcasm with optimism. A Trump dictatorship scares the hell out of me as I truly think the man is insane . I just think Trump brings about meltdown quicker than Clinton.

        • polecat
          November 2, 2016 at 1:56 pm

          So it’s a quick rip of the band-aid vs sloooooow pull ..

          got it !

          I always thought fast was better …but that’s just me … ‘;]

    • polecat
      November 2, 2016 at 1:52 pm

      And with a Clinton shoe-in ??? All hugs, bunnies and rainbows ? ….. I think not !

    • Chicken
      November 2, 2016 at 6:59 pm

      By definition, a currency would fall if the money was rushing into the country. Most of the currency is out of country thus if suddenly it became unpopular (for whatever reason) it would come flooding back in.

      One way for that to happen would be to exchange it for manufactured goods?

      So I’m not sure what you’re saying but I fear perhaps, you’ve been mislead?

      • Doug
        November 2, 2016 at 7:59 pm

        Bonds being sold and then converted to something else would be a case of money fleeing the country . Every currecy crisis in the world has followed this pattern . I know of not one crisis that happened from money pouring into a country , the crisis happens when they head for tbe exits at the same time .The money you are talking about odds actual cash oversees and small % of what we call 💰.

  15. nick kelly
    November 2, 2016 at 2:42 pm

    Who would have thought all these people with a computer, internet electricity, a roof, and leisure would be so totally dissatisfied they look forward to anarchy and the collapse of the economy?
    And that computer you are commenting with would have cost a million dollars 30 years ago- now yours for 500 or so courtesy of big corporations. They began as little outfits, but to scale up and deliver low prices you have to go big.
    Oh and these preppers and their redoubts- you would be amazed how much division of labor existed before the US existed – check a few surnames- Cooper, Sawyer, Shoemaker, Smith, Carpenter, etc. etc.
    These people lived in communities- and although hunting and fishing helped it was farming that enabled the above trades.
    How many preppers own a plow?

    • walter map
      November 2, 2016 at 4:45 pm

      Nick, I’m sure there are any number of good reasons for people to let corporatists become their lords and masters. But they’re just not listening for some reason. Since people don’t seem to know what’s good for them, corporatists are just going to have to take it upon themselves to do the right thing and make that decision for them.

    • PrototypeGirl1
      November 2, 2016 at 6:04 pm

      I’ve been a prepper for several years now and I don’t have a plow. Actually we grow in buckets, really helps keep the bugs and critters out. We know how to filter water and grow from seed, or from food. Right now I have 2 Pineapple plants sprouting roots. It’s Nov and I am still harvesting delicious cherry tomatoes. We all have lots of seeds fertilizer and grow lights. All the preppers I know have LOTS of food storage and they practice food preservation. So a plow no I don’t have one but I don’t think I need one. Seems like it would be a lot easier to protect buckets I can move around as needed than a big open field.

      • nick kelly
        November 2, 2016 at 9:19 pm

        Grow lights? Too funny. What powers the lights?
        Friend you sound like a nice guy but you are a hobby farmer- unless of course those grow lights are powering a gro- show.
        Agriculture does not plow fields for the fun of it. You can’t grow wheat in buckets.
        I grew cherry tomatoes too. I grew in a kiddies wading pond I bought for five bucks because it had a hole in it. Of course I added holes.
        Great production- 5 pounds off three plants.
        But I did it for fun- I didn’t think I was replacing the economy.

        Grow lights? Sorry but that leaves me kind of typeless.

        • nick kelly
          November 2, 2016 at 9:46 pm

          Ps: I’m not saying it is impossible to go completely self-sufficient just that it is easy to underestimate the difficulty.
          Just reading a book by Joe Garner about homesteading on Vancouver Island around 1910. His Dad buys a team of oxen to log etc. First thing critters do is break the ox-bow- the piece of wood shaped like a 3 on its side that is their harness.
          Making another is a week long production- steaming wood for hours so it will bend etc.
          By preppers I mean those who think they can become completely self- sufficient, where there is no net.
          Obviously there are lesser degrees of this, so we may be working off different pages.

          Segue: Henry Ford was very proud of his private hydro-electric generator- and of its heating the house, an early use.
          But the year he died the Rouge had frozen- and his bedroom was ice cold.

          sa f fgalnsve rfgivinfgut en n f tas stuff wears out

        • Dan Romig
          November 3, 2016 at 8:13 am

          My father and I sold our wheat seed breeding and genetics company, Trigen Seed LLC, to Limagrain Cereal Seeds six years ago.

          Wheat in buckets? LCS has their 1st generation crosses grown in Ft. Collins CO on shallow pallets stacked three tiers high under computer controlled lighting and irrigation. The legalized cannabis business has quite a few benefits, eh?

          LCS is also in the high-end malting barley business with a great variety for craft breweries called Genie. Craft brews typically contain 2 to 3 times the amount of barley than a Bud, Miller or Coors, and LCS is working with the great breweries in Colorado to bring you better beer!

        • nick kelly
          November 3, 2016 at 8:45 am

          No doubt wheat breeding is done on a small laboratory scale- but the point of creating a new strain is to plant millions of acres with it. Which have to be plowed.

          Ya grow lights are fun- the HPS gives off a nice yellow light. Great for treating SAD, among other things.

    • Chicken
      November 2, 2016 at 6:47 pm

      Perhaps they’re interested in preventing the anarchy we seem to be headed toward? Do you not read and comprehend the implications of Wolf’s observations?

    • Chicken
      November 2, 2016 at 7:05 pm

      Who would’ve thought the gamblers and criminal institutions would be bailed out at the expense of the middle class via financial repression?

      I don’t consider myself a prepper but I do own a plow. Actually it’s a big 5ft wide tiller attached to a tractor and using this I can plant a single row of beats as far as the eye can see, if need be.

  16. Doug
    November 2, 2016 at 3:33 pm

    Computer cost down meanwhile housing,education, Pharmaceuticals,food and health care through the roof .I don’t look forward to a collapse or anarchy.Our sytems have just become so corrupt it looks like a high probability . In England inflation is projected at 4 % and the Bank of England is talking of lowering rates to .1% we now live in bizzaro world . How this all plays out is going to be interesting to say the least .

  17. Ehawk
    November 2, 2016 at 6:01 pm

    So everybody keeps talking about a crash…

    Wolf, what’s going on in Bay Area and Silicon Valley?

    Start ups, VC money, Jobs, Layoffs. Peter Thiel said that all America is hurting but in the SF Bay things are peachy…

    • November 2, 2016 at 7:27 pm

      In SF, rents are falling, condo prices are falling, office vacancies are rising, sublease space is soaring, signs CRE is starting to head south…. So yes, peachy, everything.

  18. KFritz
    November 3, 2016 at 2:12 am

    A WTF? acquisition was announced in the Bay Area today. Safeway purchased Andronico’s.

    http://www.sfgate.com/business/article/Andronico-s-Community-Markets-in-deal-to-be-10512463.php

    Safeway bought the good will of several clusters of upper-income grocery shoppers, the store locations, the super secret identity of Andronico’s vegetable suppliers (the fruits & veggies are true beauty contest winners, way ahead of Whole Foods), the equally secret identity of Andronico’s meat suppliers (their stores have really good meat, not just beauty contest winners), and the excellent recipes from the delicatessen and prepared foods section. So what was the purchase price? The ordinary folk of Berkeley have long called the store “Astronomicos” on account of the prices.

    • Petunia
      November 3, 2016 at 11:19 am

      If you want decent quality food you have to shop the high end food stores now. The quality in the regular supermarkets has declined since 2008 and is still down. What used to be considered standard quality in our childhoods, is now what the high end stores sell.

  19. Julian the Apostate
    November 3, 2016 at 5:51 pm

    Mary, I shall try to answer your question. It is a fair question, and I truly believe you are seeking to understand. I voted for Trump the other day, and have backed him since he threw his hat in the ring. Franklin said that politics is the art of the possible. Trump is hated because he’s been successful. He has navigated that swamp in NYC and gets things done. One comment threw a lot of accusations at him with no specifics. If any of those were legitimate, they would be beating him half to death with it in the 24 hour news cycle, not letting it lay in some obscure website. You can’t get real Americans to hate a Capitalist…not even a bad characiture of one like J. R. Ewing or Quark on Star Trek. The problem has arisen because those of us who are not collectivists keep electing people to Washington who then either roll over and play dead or worse, desert to the enemy. We are not the ones who will start the Civil War. We are the ones who want to take the country back to original intent, and defend the Constitution, “from enemies foreign AND DOMESTIC.” The collectivists have been chipping away at us since Manifest Destiny and the damage may take that long to repair. A lot of people want to paint Trump with the Hitler brush, while they all secretly want to be Stalin. They hate Trump because he has said the one word that will destroy them utterly: NO! They are flummoxed – you can see it in their panic stricken fury at him. Those of us who still work for a living are tired of the government feeding off of us. Trump is the focus of all that pent up frustration. Maybe some of us are not particularly erudite, but that ‘weird feeling’ that Wolf is talking about IS A PERCEPTION OF AN EXISTENTIAL THREAT TO OUR VERY BEING. I hope this helps.
    I Remain, Madam, Your
    Humble Servant
    Julian the Apostate

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