SNAP CRACKLE AND POP

 
 Want to know how bad things in China really are?

Well, you had two signs over the weekend, their trade numbers disappointed and what the WSJ, "China Bolsters Ailing Firms," noted: "China is doubling down on efforts to keep unprofitable factories afloat despite years pledging to curb excess capacity, adding to a glut of basic materials flooding the global economy."

The first thing you should know about this is the broader implication. Government bureaucrats never fix any thing unless they're forced to. The austerity program that the Germans and a few other half-way solvent EU members prefer is anathema to the kick the financial can crowd in Brussels.

The next thing is the term doubling down, an activity most traders and gamblers understand. Some would call it risking good funds after investing previous bad ones. The Keynesian crowd just never gets it. Keynes was supposedly noted for his remark in the long run we're all dead. Well, in the long run most firms either die or get absorbed. There is a well known term for it if they all get absorbed by the government.

Firms are like people they ought to be allowed to die in dignity. We've said it before and we will say it again. Despite all the monetary global madness nothing has been fixed. Papered over maybe, but not fixed. When things get fixed there's usually some pain involved like loss of jobs or employers moving to more friendly climes.

Often doubling down is a bureaucratic form of burying one's head in the pillow and hoping the problem will either correct itself or, like my old girlfriend, just go away. She didn't. And neither will these long-festering problems. Tons of global jobs have already been lost in the weak economy. What the Chinese and others are doing is making it even weaker by boosting more capacity without requisite demand.

As Einstein noted: "You can't solve a problem with the same consciousness that caused it." A change of consciousness for these blokes would be to stop kicking the can and claim it. You caused it, you own it. You screwed the pooch.  This is in part what the upcoming election in the U.S. is about. It's what Brexit is about. It's what Grexit is about. And it's what given the circumstances today things should be about.

If you let the MSM shills tell you otherwise you become just another accomplice in the kick the can game. At the risk of exhuming Keynes' spirit one more time, sooner or later unless there's some drastic changes, the global economy will do it's best impression of an old jingle for a popular U.S. breakfast cereal years past.. It will go snap, crackle and pop.