Darth Chipmunk

Matt Nesto has a video and brief article up over at Yahoo! Finance that sets a dark tone for the short-term future of the world economy:

“Around the world, the single narrative of collapse has taken hold,” says Ed Dempsey, chief investment officer at Pension Partners. “Everyone is positioned for collapse.”

But the article isn’t all doom and gloom:

“I’m not saying that the event can’t happen or it won’t happen, I’m simply saying that bond investors are positioned as if it [the cataclysmic event] has already occurred, and therein lies the opportunity,” Dempsey says, painting a scenario that could see the S&P 500 finishing the year with a 30-40% gain.

While Dempsey says it is clear that we are in the midst of a slowdown, and probably headed officially for recession by the 3rd or 4th quarter, the current climate is just not that threatening.

That seems odd to me. Dempsey acknowledges the 800 lb. gorilla, AKA the narrative of and positioning for collapse. But then he seems to contradict himself with the suggestion that the S&P 500 could see a 30-40% rise by years end contrasted with the next sentence where he suggests a recession by the 3rd or 4th quarter. How do you reconcile that?

I’m not an economist. But even my squirrel brain realizes that there are many things happening on our planet that have a negative impact on the economy and on people’s perception of it, and rightly so. Only a fool would ignore them:

• The Middle East is in chaos. Islam and Sharia spread across the planet and leave violence and death in their intolerant wake.
• Israel and Iran (and Islam) seem intent on mutual destruction.
• Egyptian Muslims are pushing to destroy the Great Pyramids.
• Europe can’t handle its own sociopolitical experiment in a unified currency as Greece, Italy and Spain drag down the Eurozone while France goes full-tilt socialist and Germany facepalms.
• Japan seems to have been nearly mortally wounded by the tsunami that has crippled their economy.
• North Korea is doing bath salts and trying to eat South Korea’s face while wearing a Winnie the Pooh costume.
• Russia is deliberately working against the west, again.
• China has gone from walled-off bit player to leader on the global economic stage.
• And the United States, the entity that the world looked to for stability and strength, has virtually abdicated its responsibility to the rest of the planet as the leader of the free world bows to leaders of lesser nations (yea I said it), demeans American exceptionalism, and engages in a strategy of appeasement of old enemies by suggesting greater flexibility after his election.
• The President of the United States wages culture war against his own people to divide us into voting blocs by race, nationality, gender, sexuality and more and pit us against each other for the sole purpose of tending to his reelection.
• American municipalities are now failing and declaring bankruptcy under the fiscal burden of sweetheart union pension and benefit plans, increased entitlement spending and increased taxes that don’t generate revenue. Our leaders at every level tell us “things are fine” way past the moment they’re not. They are clearly more concerned about their skin and the status quo than the best interests of the people they serve or the oaths of office they swore.

There isn’t a shred of evidence that any of our leaders are serious about admitting there is an issue, much less doing anything about it as they deliberately enact expensive health care and green legislation, bankrupt energy companies, give huge loans to unviable solar and wind boondoggles and “necessarily” drive up traditional energy prices while telling me I’m being histrionic.

I’m watching in horror.