Thursday, December 8, 2016

In Psychopaths We Trust

As of today's ECB meeting, the U.S., Europe, and China are in the process of tapering/tightening Monetary policy...

Even as global trade and GDP are at seven year lows, and global debt is at all time highs...

"Over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance.” - Hyman Minsky

Global yields (red) with GDP growth (black):

Global Economic Policy Uncertainty Is At A Record High

Amazingly, economic policy by Twitter isn't helping to improve uncertainly much. So far this week Trump hammered China, Boeing, all of Biotech, and now he's on to whatever Unions still exist, after a generation of psychopaths in power...

Nevertheless, the Trump rally is punishing any "doubters":

Because there are no doubters...

Active Manager risk asset allocation is the highest in 3 years:

U.S. Treasury by Goldman Sachs
Think they're a little excited?

Europe is ready
The last several ECB meetings are indicated...

Internet stocks


Small banks

Foreign policy by Lockheed Martin got pounded today

Joining J&J to the downside...

And the Equal Weight / Cap Weight S&P ratio is in crash position...

"Don't have any doubts about getting out"

Anything But The Truth

The truth is the enemy of mankind...

In the beginning, God created everything and then in an act of cruel irony created the hairless monkey. This wretched creature had NONE of the survival capabilities of every other species, except a slightly bigger brain. The "abandoned" humans were pissed off. So they created everything they needed to protect themselves from the rest of nature - houses, clothes, food, Walmart etc. And while they were at it they created their own God as well, since the one that created them had forsaken them to "nature". But, of course they couldn't agree on which version of their fake God to worship so they annihilated each other continuously while disagreeing on the shape and form of their fake God.

Next thing you know, they found a new world and met the Native Americans. White man said "where is your God". The natives said "we worship the one true God of nature". The white man recoiled - "you need to worship the God of man". So they laid out a deck of six thousand cards and said pick a God any God. And the natives said how do we know which one to pick? The white man was outraged at the "heathens" and they slaughtered them and took their land. 

Next, mankind created the corporation to harness the power of infinite profit growth on a finite planet. Labour was too expensive however, so they invented the Monsanto to double the human population in 40 years, while cutting the wildlife population in half. This essentially created free labour for unlimited profit. By that point a quarter of the world's population was living off of the slave labour provided by the other three quarters of the planet. And the finite planet was getting totally fucked up by the infinite profit growth, but since the humans didn't trust nature, they consulted the oracle of Exxon as to what to do about it. And the Exxon said, do nothing. And they believed their corporate masters who protected them from the laws of nature while using them up like human Twinkies. 

Eventually things got so bad that instead of changing their ways, they decided to build a rocket ship to Mars. Because the answer to fucking up one planet is always to find another one. Never mind that on a good day Mars is 10,000 times worse than Death Valley on a bad day. This was their corporate plan. 

And wouldn't you know, they trusted their corporate masters right to the very end. And then they realized it was their turn to make the quarter. 

Wednesday, December 7, 2016

100% Terminal Idiocracy

"The fall of Globalization was a buying opportunity. What else?"

"Getting in was easy"

Energy policy by Exxon

Food and Drug Agency by Monsanto

Treasury by Goldman Sachs

Healthcare by Merck

Trade policy by Walmart

Foreign Policy by Lockheed Martin

Environmental policy by the Koch Brothers:

CNBC Dec. 7, 2016
Trump's Pick for EPA Head Is Suing The EPA
"Pruitt has been a fierce critic of the EPA, and has been tied to the oil and gas industry, which aligns with Trump's signaling of an interest in loosening energy regulations."

"Having Scott Pruitt in charge of the U.S. Environmental Protection Agency is like putting an arsonist in charge of fighting fires," 

Small Business Administration by the World Wrestling Federation?

Exceptionally Dumb

"We" in the developed world borrow money from Third World sweatshops to pretend we're wealthy. In other words, we live in a de facto Idiocracy, and we need to stop referring to serial fucktards, as "experts"...

The annual trade deficit with China is 60% of the U.S. defense budget ($365b / $600b):

Dec. 6, 2016
America's Trade Deficit Grows At Fastest Pace In 19 Months
"Our trade like having a business that continues to lose money every single year," Trump said earlier this year.

"A nation's trade balance is nothing like a firm's bottom line," Douglas Irwin, a trade expert at Dartmouth, wrote in Foreign Affairs magazine. "A country, particularly one such as the United States...can run a trade deficit indefinitely without compromising its well-being."

The U.S. lost 17 factories per day between 2000 and 2012, and thousands more subsequently. But that's "a minor detail". In other words, the real problem in the U.S. is the surfeit of NeoCon shit rags like "Foreign Affairs" magazine. Written by history's most exceptional morons. Who know nothing about trade mercantilism, and therefore assume that a reserve currency is *free* money. The payment is in factories, jobs, industries, and intellectual property.

And Ponzi debt. Another minor detail for the children to inherit:

All because "we" will always be wealthy, and "they" will always be poor. Regardless of how much money we borrow from them. The laws of *free* trade industrial arbitrage say so, except they don't. Quite the opposite, the laws of *free* trade arbitrage and ponzi borrowing indicate that our standard of living has already converged lower, ex-Minsky Moment. The exact opposite of what the de facto Idiocracy believes.

So the gamblers throw their money away at the casino to prove they're wealthy...

"We're rich!!! Look at all of the money we borrowed in exchange for jobs and industries"

"No full retard saw that coming"

Second largest U.S. bank:


As long as JP Morgan and Goldman Sachs don't roll over, this will all be fine...

"Get me in to the Hotel Californication"

ETFs saw a whopping $49.1 billion in inflows, the highest monthly total ever in records going back to 1998, according to State Street Global Advisors.

"While the jury is clearly still out on President-elect Trump's decree to make America great again, as he has yet to take office, the post-election fervor has certainly made U.S.-based fund flows great again,"

Last night:

I was going to show all of the U.S. sectors, but why not just show this...there are only two stocks (out of 30) in the Dow making new 52 week highs:

Goldman Sachs and JP Morgan...


% of S&P above 200 dma:

Money (Out)flow
Regardless of how much money is coming into U.S. stocks, someone has to sell, money flow measures the extent to which prices are rising (or falling) in relation to volume:

Despite the heavy fund inflows, prices are mostly falling relative to volume...

On balance volume

VIX Complacency

Hedge fund performance gap relative to S&P 500:
i.e. who is buying record futures...

Tuesday, December 6, 2016

Globalization's Crack Up Boom. In Progress...

A fake-believe recovery coming at the end of a fake-believe recovery. What else?

The U.S. just tightened monetary policy for the entire rest of the world, amid the lowest GDP since 2009...

U.S., Germany, UK, Canada bond yields with global GDP:

But that's no problem, because we have "stocks"
Small cap value:

Financials / S&P ratio
Volume is a ratio as well...

The growth / value ratio

Lockheed Martin et al...

Toll Brothers homebuilders...

Schwab with IPOs...

Relative strength. Or not...

The "recovery" within the "recovery"

Ok, if you say so...

"We priced in 15 rate hikes..."

Hook, line, and sinker this time...

Dow versus cash balances:

Sleep with one eye open...because this will end overnight...