Unfortunately, as I have pointed out repeatedly, when you look at the rest of the world (other than the US) things are really bad and getting worse, while we're in fact posting up recession warnings month-after-month.

China’s manufacturing industry will contract in September, according to the preliminary reading of a purchasing managers’index released today by HSBC Holdings Plc and Markit Economics. The final number will be released on Sept. 29. If it confirms that activity shrank, the survey will extend its longest streak of contraction readings in its eight-year history. A number below 50 means that activity decreased.

A composite index for services and manufacturing activity in the euro area fell in September more than economists had projected. The PMI slipped to 45.9, its lowest since June 2009, from 46.3 last month. The median estimate of economists surveyed by Bloomberg News had called for a reading of 46.6.

France’s manufacturing industry will contract this month more than economists had forecast, according to a PMI released today. The measure showed a preliminary reading of 42.6 for September, less than the average economist estimate of 46.4 in a Bloomberg News survey.

So let's see if I can summarize this -- China has been in contraction for the longest period in the history of the indicators, yet we're told their economy is "expanding" (based on their alleged GDP) and the Euro area is also into formal contraction.  Worse, France is contracting more than the Euro area at large.

The economic model in China was always bogus; it was predicated on exporting cheap crap to the rest of the world, stealing every bit of intellectual property that isn't nailed down along with hacking people's computers around the world to acquire even more of it (all illegally) and effectively-enslaving their labor force while poisoning them at the same time will lead to a stable, productive and growing middle class.

Yeah.

At the same time in Europe the model is that whatever is taxed to support social programs spending 50% more on them is also a sustainable business model, along with making employees effectively impossible to dismiss or restructure when business conditions change. Oh, and in addition adding more and more leverage through the banking system by counterfeiting the currency in a race with the United States to do the same will lead to "infinite prosperity" (to go along with the infinite QE.)

Yeah.

Remember in October of 2007 there were the "four horsemen" that Cramer kept pumping even as the market was actually topping out and the leverage expansion game was coming apart.  2008 underlined that in spades.

We're about in the same place today but it's far worse this time because this time the lead is coming from China and Europe, which have played even more-outrageous games with their monetary system than we did.

Now add the cherry on top of the sundae -- the average investor is ridiculously bullish and so are the so-called "analysts", with most looking for new nominal highs in the indices, many expecting them this year.

A couple of weeks ago I said that I put the odds of a major market dislocation event before the election as 1 chance in 5, or 20%, and when asked on a panel what I thought the odds were of things coming apart over the next three years I commented that I didn't see how that outcome could be avoided.  Of course there's always a way even if you don't see it, but I haven't changed my mind in that regard at all -- if anything the data since I made those comments has gotten worse, and there certainly hasn't been anything I'd call an improvement in the offing.

In short, this is a time where, if you've clocked big gains in the market, to protect them or simply take them off the table entirely.  The risk:reward profile today is profoundly unfavorable and entirely driven by the belief that The Fed's "QE" will both "work" to solve the employment gap and, at the same time, not cause a monetary accident that trashes operating margins and causes the capital losses that have been hidden over the last two decades to bubble to the surface and become realized loss.

I look at the odds of that working out as similar to that of my being hit by lightning while out for my morning jog -- under a clear blue sky.