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David Collum: Broken Markets, State Capitalism & Eroding Liberty

user profile picture David Collum Dec 22, 2013
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Annual chronicler Dave Collum sits down with Chris again this year to discuss the major themes of his epic 2013 Year In Review recap.

2013 was a frustrating year for those who believe in cause-and-effect. Markets have been levitated far above what fundamentals would justify. Sovereign debt has increased tremendously, but seemingly without repercussion. Central planners have become more brazen in their belief that intervention is the best way to control both an economy and its citizens to surprising little outcry from the populace:

To me, this year was about civil liberties. It just dominated my field of view.

You can touch upon Snowden, but there were all sorts of breaches of civil liberties this year, all sorts of warning shots that say it's problematic. You can track concerns about the NSA's potential to go to totalitarian to 1975, Senator Frank Church. There have been whistle blowers all along saying these guys are dangerous. And then all of a sudden, somehow Snowden clicked. But he was not the first.

So civil liberty is a huge issue. They've got facial recognition software to make your shopping experience better. Right… I do not want my shopping experience being approved by face recognition software. We're at great risk of going Orwellian here. And this really came through clear this year.

The debt just keeps getting worse; we just keep going bananas on the debt. And these guys, they go on TV. They say we've got to get the consumer consuming. The consumer has no money: it's that simple. The consumer is out of money. Student debt is soaring because the parents are broke. We've got an entire generation that is being damaged daily by opportunities that do not exist that they were promised. And this is scarring.

And then the markets look broken to me. They are so state controlled and anyone that says that is conspiracy theory, then excuse me: What is QE? If the market are rigged, then what is QE? What are zero percent interest rates? What is that?

And so I think broken markets, civil liberties, state capitalism that is the plot.

Meanwhile, because the Dow is up, everyone is partying. But since the numbers are so bogus, we know we are going to get a regression of the mean. History of bear markets show three big legs down. We have only had two. The next one will rip the souls out of investors if it shows up. And the markets, the economy is immuno-compromised. We are fragile. If we get hit with another Lehman-type event, we are going to really crumble this time. We are really going to have a mess on our hands. And I think it could come.

Click the play button below to listen to Chris's interview with David Collum (62m:34s):

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