While waiting for his flight at Prague Airport in the Czech Republic, piano player and musician Maan Hamadeh sat down at a public piano and played Beethoven’s famous Für Elise for an unsuspecting crowd in various styles and renditions.

The unexpected performance was a treat for other passengers, I can’t think of a better way to wait for a flight!

Sometimes you just have to sit back, look at some charts, and say WTF...

Carry Trade
1. SPX vs USDJPY

2. SPX vs US Treasuries

3. SPX vs US Term Structure

Fun-durr-mentals
4. SPX vs Fwd EBITDA Expectations (bottom-up)

5. SPX vs US Macro (top-down)

6. SPX vs Jobless Claims (so long held as supportive of the recovery)

7. SPX vs Lumber (the housing pillar is cracking)

Risk Assets
8. SPX vs High Yield Credit

9. SPX vs China's Shanghai Composite Equity Index

10. SPX vs Japan's Nikkei 225 Equity Index

11. SPX vs Emerging Market Bonds

12. SPX vs Emerging Market FX

Of course, there are those who see these charts and through no self-referential cognitive-dissonance of their own (well in fact entirely for that status quo engendering reason) will proclaim... that proves it - US is cleanest dirty shirt and money is flooding back to 'safety' - however - that is entirely disingenuous...

The ironists among market punters will even attempt to construe all this as a reason to buy more developed world stocks on the premise that the money flooding out of such places as Thailand, the Ukraine, Turkey, and Argentina will be parked in the S&P and the DAX (perhaps overlooking the fact that the purchase price of these now-unwanted positions was most likely borrowed, meaning that their liquidation will also extinguish the associated credit, not re-allocate it).

 

The Goldilocks lovers will also tend to assume that any such disruption will serve to delay the onset of genuine tightening and may even induce further ill-advised stimulus measures on the part of the major central banks. Certainly Madame Christine Defarge – that tax-sheltered tricoteuse who knits beside the guillotine set up for the hated bourgeoisie – has already begun to militate for such a response.

 

For their part, the biddable are already trying to drown out the noise of the Cacerolazo by making the fatuous argument that the EMs account for such a piffling portion of world GDP that their fate should be a matter of complete indifference to the rest of us. Needless to say this is a touch disingenuous at best. Their share of end consumption-biased GDP may be lower, but they account for an equivalent fraction, if not a small majority, of global industrial production – and they have been responsible for an even bigger proportion of its growth this past decade. Ditto for trade and ditto for resource use.

Bonus
13. SPX vs The Federal Reserve Balance Sheet - The Truth

From the "Mathbabe":

Not every person gets trained in being wrong and admitting it. I’d wager that most people in the world, for most of their professional lives, are trained to do the opposite in the face of being wrong: namely, to wriggle out of it or deflect criticism. Most disciplines spend more time arguing they’re right, or at least not as wrong, or at least they have different mistakes, than other related fields. 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

We can no longer afford the expansion of healthcare/education or their out-of-control costs.

If we strip away obscuring narratives, we can clearly see that the two employment sectors that have expanded rain or shine for decades have functioned as gigantic make-work projects. I refer of course to healthcare and education, specifically higher education.

We can see the outsized gains in these sectors by comparing total population growth to the number of full-time jobs and the number of jobs in education/healthcare since 1990. Here is total population: a 27% increase since 1990:

To separate out the wheat (jobs that support households) from the chaff (part-time work that cannot support a household--even a job with one hour a week is counted as a P-T job), let's use full-time employment as a baseline. Full-time employment rose about 20% since 1990, less than population.

Education/healthcare employment rose by 81% since 1990--three times the population growth rate and four times the percentage increase in full-time employment.

For more on these sectors' growth, please read Mish's recent entry, Ominous Looking Picture in Healthcare and Education Jobs.

If education and healthcare had expanded to meet the needs of a larger population, employment in the sectors would have increased about 30% since 1990, not 81%. So 50% of the sectors' expansion is above and beyond population growth.

Have education and medical services improved by 50% since 1990? In many cases, it can be argued the yield on our investments in these sectors has declined even as employment in the sectors has soared. Consider the study Academically Adrift: Limited Learning on College Campuses which concluded that "American higher education is characterized by limited or no learning for a large proportion of students."

While student loans have soared to over $1 trillion, with direct Federal loans ballooning from $115 billion to over $700 billion in a few short years, only 37% of freshmen at four-year colleges graduate in four years (58% finally graduate in six years), and 53% of recent college graduates under the age of 25 are unemployed or doing work they could have done without going to college.

Why has employment soared in higher education? Look no further than bloated administration and non-teaching staff: New Analysis Shows Problematic Boom In Higher Ed Administrators:
 

In all, from 1987 until 2011-12--the most recent academic year for which comparable figures are available—universities and colleges collectively added 517,636 administrators and professional employees, according to the analysis by the New England Center for Investigative Reporting.“There’s just a mind-boggling amount of money per student that’s being spent on administration,” said Andrew Gillen, a senior researcher at the institutes. “It raises a question of priorities.”

The ratio of nonacademic employees to faculty has also doubled. There are now two nonacademic employees at public and two and a half at private universities and colleges for every one full-time, tenure-track member of the faculty.

The number of employees in central system offices has increased six-fold since 1987, and the number of administrators in them by a factor of more than 34.

As for healthcare in the U.S.: despite soaring employment and expenditures, life expectancy in the U.S. since 1990 has fallen well below that of the United Kingdom (U.K.), a nation whose healthcare system is widely criticized in the U.S. (World Bank, Life Expectancy at Birth)

Yes, there are many metrics of overall health, but the U.S. has not experienced a 50% increase since 1990 in any of them. If anything, the overall health of the populace has arguably declined, even as the nation pours almost 20% of its gross domestic product (GDP) into healthcare.

This is not a slam on those earning a living in these sectors; it is simply a description of sectors that have functioned as "make-work" sources of jobs.Consider the appallingly perverse dynamic of student loans: now that tens of millions of students need student loans to pay sky-high tuition and fees, colleges need huge administrative staffs to manage the student loan process.

The yield (in earnings) on the increasingly unaffordable college degree is declining sharply:

The enormous sums of money needed to pay for these make-work sectors is coming out of household incomes that are stagnating for 90% of all households.

If we subtract healthcare and debt service from household earnings, we find that wages/salaries are in recession territory:

In other words, the nation can no longer support these enormous make-work sectors, where employment and expenditures rise while the yield on those gargantuan investments actually declines--a classic case of diminishing returns.

Consider the percentage of healthcare employment that is paper-shuffling resulting from America's dysfunctional pastiche of private cartels and Federal programs; I have seen estimates of 30%, but this doesn't include the staggering sums lost to fraud, embezzlement, over-charging, useless or even harmful procedures, duplicate or needless tests, and so on.

As I have often noted, if we compare our per-person expenses for healthcare with other advanced democracies such as Australia and Japan, we find those nations spend roughly 50% of what the U.S. spends per-person, with better and more evenly distributed results. This strongly suggests that healthcare should cost half of what it currently costs, if the U.S. sickcare system wasn't so wasteful, ineffective and dysfunctional.

As for tuition costs: I have demonstrated in my book The Nearly Free University and The Emerging Economy: The Revolution in Higher Education that the tuition for a four-year bachelor's degree could (and should) cost $5,000, not $100,000 or $200,000. The technology and tools already exist to accredit the student, not the institution and provide distributed courses, adaptive learning and real-world, workplace-based workshops for a tiny fraction of the ineffective, unaffordable system of higher education we are currently burdened with.

Once costs decline 95%, there is no need for student loans or the bloated bureaucracies needed to manage the parasitic student-loan system.

Why is employment in these sectors finally slowing? For the simple reason that they've run out of oxygen: we can no longer afford their expansion or their out-of-control costs. Much cheaper and more effective systems are within reach, if only we look past failed models and politically powerful cartels and fiefdoms.