Three dominant themes...

...of this blog during the previous five years have been:

1.  The Chinese Crazy Crony Capitalism Corruption Crisis ("CCCCCC"™,®)

2.  The EU experiment, lacking in real amphictyonic cohesion, doing its best to proxy the CCCCCC in creating a new elite class of largely unaccountable and disinterested technocrats with entirely predictable results.

3.  Rate Compression and deflation throughout the Western World.

All of these themes are now fully assimilated.  They are "known".  History will write itself over the next two years.

On to the next project.  Courage, and shuffle the cards dear readers.

When accountability is vacant...

...corruption takes a seat.  No-one should be "shocked and deeply troubled" by this.

Still in the tunnel...

...of volatility.  I don't expect an exit until the holidays, one way or another.

Cnidarian Bleaching...

...occurs during the sudden collapse of symbiosis between corals and the polyps that reside in them.  This may be caused by many factors and scientists appear to be unable to consistently predict which causal factor determines the final outcome.

There are many factors contributing to the collapse of symbiosis between the U.S. and China, a significant one being the importation by China of U.S. fiat currency policy without associated oversight and built-in safeguards and failsafe mechanisms not implemented but evolved from experience with the shortcomings and dangers of the policy.

A major liquidity crisis is underway and the paper dragon is not equipped to counter its effects...and will find few friends given its myriad other objectionable political positions.

I note also China has announced it "intends" to cut its military personnel by 300k.  This announcement was made at a military parade.

Subtle.

Volatility...

...is recursive.  That is, volatility generally begets more volatility until some form of dark equilibrium is met.  This current sell off is not over.

Some very strange activity from several levered volatility ETFs have captured my attention recently...and they do not portend well for the next following few weeks, today's rally notwithstanding.

Band-aids...

...over bullet wounds.

China's devaluation does not address any of its core problems and will only exacerbate financial imbalances.  It merely serves as a signal to party members (and their families) that the party will go on a bit longer.

Do not be shocked if Bermuda and the Caymans suddenly benefit from massive custodial fund balances.

The plot thickens...

"A secret cell at the Greek finance ministry hacked into the government computers and drew up elaborate plans for a system of parallel payments that could be switched from euros to the drachma at the "flick of a button" .

The revelations have caused a political storm in Greece and confirm just how close the country came to drastic measures before premier Alexis Tsipras gave in to demands from Europe's creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation."