Saturday, June 23, 2018

One Clown To Rule Them All

Wars can end suddenly and decisively, or they can drag on seemingly forever through attrition. This post-2008 era has been a war of attrition - mental, physical, and economic. Perma-bulls who claim that their beloved "great deformation" is proof that us perma-bears are wrong, are ignoring the toll it has taken on the populace at large maintaining this delusion. Primarily a mental toll, but as we see through skyrocketing diabesity, a health toll as well. All of which manifests in terms of widely ignored mass shootings and fentanyl-assisted suicides. 

Nevertheless, even wars of attrition eventually reach their climax. Following two wars, a tax cut for the ultra-wealthy, a housing bubble, and recession, the ignominious reign of George W. Bush  ended in financial collapse. His final send-off bore all of the reminiscent feel of Nixon's last helicopter ride from the White House, shrouded in shame. In this post-bailout era, had Clinton been elected, this economic cycle would have very likely already ended in 2017. The Democrat economic agenda was not sufficiently "stimulative" to keep the gathering deflationary forces at bay much longer. The deflation trade was on in size ahead of the election, anticipating her victory. We all know what happened next of course, Herbert Hoover got elected with his business-friendly agenda consisting of de-regulated corruption, tax cuts for the ultra-wealthy, and trillion dollar deficits paid for by the rest of the world. Followed by Smoot-Hawley tariffs.

Shockingly, these "business-friendly" policies which entailed tariffs and higher interest rates for the rest of the world, ended the global synchronized expansion dead in its tracks.

Which comes not so much a surprise to the rest of the world: 

Little did we know during the Bush era, that Bush was a run-of-the-mill class clown. By no means exceptional. However, in order to convince Republican voters to trust the exact same failed policies all over again, a much bigger clown was required. Enter the Trump Super Clown.

A man whose depth of depravity knows no limits. And yet no matter how low he stoops his base is right there with him, cheering him on to the next level of self-debasement. No act of evil is considered too vile to force them to break ranks. 

Whereas Bush illegally detained grown men at Guantanamo, Trump is now detaining babies in cages. His "values voters" have no qualms. Forget the fact that disastrously failed U.S. policies both in the Middle East and Central America were the root cause of these mass migrations. Facts mean nothing to the Trump Idiocracy. All of this chicanery of course follows in the long human history of nihilistic decadence preceding collapse. 

Meanwhile, aghast Democrats need not entertain the fantasy that the Roman Senate will impeach Caligula. Knowing that he is the only thing standing between them and re-regulation of corruption - that can't happen. 

In other words, Trump's election spawned a late stage mega bubble in arrogant ignorance that will forever define the last days of the American empire. 

Be that as it may, Trump's efforts to rearrange Globalization to his own liking are a fool's errand. Because after all, what the wise man does at the beginning, the fool does at the end. 

Trump's cadre of deeply devoted clown followers are under the impression that the U.S. is an island unto itself. And that "Globalization" is an unnecessary fiction dreamed up by the "Deep State". 

These are the last people on the planet to learn that on the other side of the shrinking global trade ledger, is...

das kapital:

Friday, June 22, 2018

The Haves And The Have Been Conned Again

Trump is going to fix wealth inequality, just not in the way that his supporters expect...

Trump supporters still haven't figured out that he's a con man, and always has been. After all, who would warn them? There isn't one in their midst with the integrity to stand up to grand theft larceny on an historically epic scale. They're too busy making excuses for child abduction. Therefore, that lesson is yet to come, and the price will be entirely unaffordable. Physically, mentally, financially...

The fall of GE evidences the totality of the smoke and mirrors "economy", now at level '11' full Disneyland under Trump

"Some companies are built for a quick buck. Others are created for the ages, such as they are in the fast time warp that is American capitalism.

Among the latter is General Electric, formed in 1889 and based on the many breakthroughs of Thomas Edison."

GE once embodied American know-how, industrial might and the rising, secure middle class."

Then came Jack Welch.

He was the most skillful operator in a new style of American capitalism, where institutional investors and a demand for ever-higher stock prices ruled an impatient Wall Street. Mergers, industry consolidation and layoffs pleased the markets."

it takes a special blend of greed, hubris, incompetence and bad luck to make this mess, whether you’re GE or the U.S."

The test will now commence...

The Imploder-In-Chief. Never Disappoints

Skynet is heading for a mental breakdown, due to bullshit system overload...

The Dow opened solidly green for the first time in nine days today, to forestall the curse of Saturday Night Fever; fortunately Donny stepped in to make things a tad more challenging for Skynet. In case anyone was looking forward to a boring weekend...

First off, this was a difficult call, predicting what they've always done in the past:

And this has to be the best dumbthink line I've read all week:

"Producers agreed to start pumping more so that they are no longer overshooting the production limits they agreed to in November 2016"

We raised the limit, to ensure that we're not overshooting the limit. Because otherwise people would say that we're cheating. Holy fuck, we're doomed.

But it gets dumber, because it's abundantly clear that the realtor-in-chief doesn't understand economics, finance, markets, or anything really. Which is fine because today's EconoDunces don't understand economics either. They understand supply and debt just fine, they just don't get supply and demand.

I hope for greater competition to implode our domestic oil industry, deja vu of 2014, but this time with feeling...

Thursday, June 21, 2018

The Age of Artificial Intelligence. Is Over.

The truth is beyond the mental capacity of this society to accept. The delusion is beyond the processing capacity of Skynet to maintain. Both are at risk of simultaneous meltdown when manic turns to panic...

We live in a dystopian Disneyland

This is not the post-truth era, this is the post-intelligence era. A lethal combination of junk media, Faux News, ad-sponsored brainwashing, disinformation overload, mass denial, and latent senility has coalesced to create a ball of confusion on an unprecedented scale. It's all worked great, because the dunces at large don't know whether to shit or go blind.

My subjective conclusion, based solely upon 25 years of IT experience, is that this is now a binary light switch scenario - now you see it, now you don't. Because there is not enough computing power to process what comes next. Rampant capitalism has put globalized capitalism at risk of extinction. The bid/ask spread between fantasy and reality is at least 10,000 Dow points wide...

First off, in constructing a post-bailout global fake-wealth delusion of unparalleled proportions, Central Banks were not adequately attentive to their "exit strategy". Because there isn't one. In the event, they successfully substituted liquidity as a proxy for solvency, to generate their delusion. Now however, global liquidity is draining at an epic rate. And the only offset to exiting Central Banks is the onrush of capital by the greater fools who bought into the Jedi Mind Trick. The Fed is tightening on both ends - on the long end at an accelerating rate. ECB QE is slated to end in December. And the BOJ has run out of bonds to buy, implying stealth tapering.

That liquidity withdrawal was only made possible due to the onrush of greater fools who waited until the end of the cycle to enjoin the con job:

So in addition to sources of liquidity being removed and gamblers ALL IN, what other logs have been thrown on the bonfire of the sanities?

I won't rehash all of the macro risks - however between EM implosion, global trade wars, oil wars, and slowing global growth, there are a few things to ponder.

The Central Bank of India recently warned that Emerging Markets require the Fed to slow their balance sheet rolloff, which is why it's set to accelerate (by design), in July. Because to loosely paraphrase Fed Chief, Powell:

"Who gives a fuck about Emerging Markets?"


Then of course we had VixPlosion in February, which has already been long forgotten. What we've seen since that time is a rotation from quality stocks into the riskiest momentum sectors, led by junk internet and revenueless Biotech. A rotation out of safety into risk, caused by the biggest volatility explosion since 2008. It's all starting to make sense to the straitjacket set.  

In considering all of the above factors in totality - which is strictly verboten by the way - because the mainstream corporate media police assiduously prohibit the connecting of two or more dots in a straight line, since plausible deniability is the opiate of the profoundly stoned masses - again, in consideration of the above, why is the burden of truth still on me?

As long as OPEC doesn't cock this all up, we're all good...

Third Wave DOWn

What the Wrecking-ball-in-chief is doing now is called not fixing what isn't working aka. wealth inequality/mass poverty, while breaking what is working. Overall, I give him an A+ on the implosion scale. No way Hillary could have been this good...

What we've just witnessed over the past several weeks is global capital rotation out of everything else, into safe haven Netflix:

We see via Paypal how similar the current set-up is to February. Except this time will have a different ending.

Friday was down, Monday was VixPlosion. This is not a prediction, merely an observation. 

Sometimes market risk is so high and obviously bearish, that anyone who can fog a mirror is short, so the casino stair-steps lower due to continual short-covering. Which is the case right now. The Dow is dripping lower but it can't get oversold due to continual BTFD...

Wednesday, June 20, 2018

Atlas Shrugged

Hard to believe, but the rest of the world is not willing to pay for Trumptopia. 1929 levels of global economic risk now combine with Y2K levels of risk exposure. Trumptopia can best be described as a latent dementia-ridden dystopian social disorder, afflicting the mentally weak and infirm: The consumption class, systematically poisoned by corporate junk food and junk culture. We don't live in the post-truth era, we live in the post-intelligence era...

Sadly, their useful life has been reached, as Zion is once again about to be destroyed.

It's Wednesday, so the overnight futures were bid to ensure a profitless VIX options expiration following three daily gaps lower in a row on the S&P, all bought with both hands in the U.S. As the rest of the world gets pummeled, U.S. gamblers are taking asinine levels of risk, predicated entirely upon fake optimism...

Any questions?

Trump's trade policies are annihilating the industrial companies he purports to be helping, while driving capital into the riskiest junk stocks:

The Unexamined Life. Is A Bad Choice.

The unexamined life attends the consumption-oriented lifestyle. Meaning that external gratification dopamine addiction leaves little room for introspection. The consumption-addled mind can’t sit still for long enough to orient itself around anything that can’t be consumed or acquired - be that real or virtual. The competitive way of life rewards socialization over deep education. Superficial familiarity above profound insight. This all attends a broad-based sociopathy directed towards understanding people in order to ingratiate oneself into higher levels of society, at the expense of understanding the natural world and its processes. Disposability favoured over craftsmanship. Knowledge is deemed “useless” if it can’t be put to direct use accumulating additional wealth materiel and corresponding status. 

All of which exhibits an unnatural way of being. The human linear extrapolation delusion, over the natural arc of nature. Humans inherently fear the natural world, and the future. Nature has been conquered by all means at mankind’s disposal. Tall mirrored skyscrapers void of humanity, tower above the concrete desert. The future has been conquered by industry-captured sociopaths spinning false narratives for a commission. The wholly unnatural entity known as the multinational corporation has arbitraged away humanity, because it was in the way of quarterly profit. We are not the consumers, we are the consumed. What we call "lifestyle", is really "deathstyle": the untold mental and physical attrition required to accumulate underutilized piles of  junk. All capped off with an humiliatingly incontinent ending, riddled by a decades-long consumption binge.    

Really, why is the end of Globalization so bad? The return of control to local markets, and local cultures. An end to the corporate monoculture that now infests the planet. 

For the most part we know why - because humanity has been systematically programmed from birth to be inhuman. To be corporate consumption drones ahead of deep thinking humans. What now abides at this late stage of deformation is a sea of two dimensional individuals floating rudderless in a sea of ad-sponsored disinformation, wholly incapable of differentiating fact from fiction. Incapable of thinking for themselves and therefore falling back on a collective cynicism towards all of humanity. Having no concept of what is “good” or “bad” except as it informs short-term self-interest. Far from being protected by their cynical pretensions, these people are ready prey for the sociopathic sharks carving their way through humanity, feasting on the gullible at will.  

In order not to fear the future, one must eschew the consumption lifestyle. One must realize that external gratification addiction leads to health decay, mental infirmity, and the incapacity to face the truth in any direction. Somehow along the way consumption-based masochism was conflated with machismo in this society. A cabal of overfed Tony Soprano wannabes pretending that their willingness to expose themselves to corporate toxic waste makes them more manly. 

Quite the opposite, the consumption oriented lifestyle destroys testosterone, which has created a society of testosterone depleted man-boys. And yet it's the exact same people who are now wondering why everyone is getting sex changes. It must be a feminist conspiracy. Think about it. "The future is plastic".  

Again, I return to the question at hand, why is the end of Globalization and the greatly feared end of mass consumption really so bad?

Is it because it brings a real future instead of a recursively self-imploding dead end?

The ability to be informed instead of constantly misled?

Family life above terrorism and mass shootings.

To go through life lucid instead of stoned?

To live in the real world versus virtual reality?

To have a social life outside of the computer?

To go through life healthy and full of energy as opposed to feeling like a serially drained battery?

The requirement to produce and consume in equal amount?

The requirement to save instead of borrow, leading to a solvent retirement?

The desire to conserve versus desecrate this planet?

The ability to begin to understand life and what it’s really worth?

Not so bad, for those who can wean themselves off of Big Macs. 

I'll take it, because the alternative is pure science fiction.

Tuesday, June 19, 2018

"Make Globalization Implode Again"

In accordance with their zero sum way of thinking, Trumptopia believes they're "winning" the global trade war. Unfortunately, it doesn't work that way...

Overnight, Trump escalated the trade war with China by threatening tariffs on an additional $200 billion of imports, if China doesn't back down. China immediately retaliated, putting that fantasy to rest. Contrary to popular belief, there IS a downside to having a dunce for president, yet somehow, 87% of Republicans haven't figured that out yet. Trump's base won't let him back down, because ignorance has been rewarded for far too long. What we are watching in real-time is idiot death spiral:

The fantasy narratives are reaching a crescendo of hope and delusion. The Trump administration's total lack of understanding of how Globalization works, across trade and capital flows, is their imminent undoing. There's a special place in dunce class for Peter Navarro:

Unfortunately for the "America First" brigade, under the current terms of Globalization with its attendant asset bubble, "America First" is wholly impossible. That is without crashing the asset bubble. Which is ok too. 

First off, supply chains cross borders more so now than ever before. NAFTA exists as a three nation supply chain - sourcing materials from Canada, labour from Mexico, and management/marketing/final sales in the U.S. The U.S./China relationship with its massive one-sided trade deficit - orders of magnitude greater than NAFTA's - is equally intractible without bringing about massive dislocation. Subsequent to the year 2000 and China's ascension to the WTO, corporate profits soared on the back of outsourcing to China. Bringing that all back to the U.S. would shrink profit margins commensurately. Not to say it shouldn't happen. Only to say it will not sustain an asset bubble. 

However, that all speaks to the long-term economic impacts. Where Trump's view of global trade is even more stunted is on the capital side. Whereas economies still retain a "local" characteristic, albeit less than before, capital is entirely global now. There is no such thing as local capital anymore. Which means that slapping tariffs on foreign countries is essentially slapping tariffs on the S&P 500. Any higher costs of goods from a foreign country will directly impact U.S. corporate profit. Which again is not conducive to sustaining record profit margins. 

But the even more imminent question becomes, who owns these foreign-based companies that would be instantly affected by tariffs? Leaving aside the S&P 500, global investors from all over the world now have massive stakes in Emerging Market stocks, bonds, and real estate. Even Trump himself is known to have some overseas investments. 

Which means that the first order dislocation is to mark down those investments to where they should be relative to trade barriers. And then the imminently proceeding order of dislocation is to mark down the debts tied to those investments. All of that doesn't wait for the ink to dry, that happens overnight. 


impossible to disentangle or separate.

What this society needs to learn more than any other lesson, is that people who are proven idiots and con men should not be in charge of anything. 

These iPhone suppliers cut across many different countries: U.S., Asia, Europe:

These China mega caps are all cross-listed in the U.S.

And the next question becomes who can afford to pay their debts when the asset bubble implodes? And which global financial entities have exposure to that debt?

In summary, contrary to popular belief, technology stocks are not a "safe haven":

What every investment advisor is telling their clients this morning:

"Just keep bidding up your own assets, everything will be fine"

"The Trump administration's history with trade has been volatile for stocks, usually sending them lower at first, but investors who have bought equities on those dips have been rewarded."

Monday, June 18, 2018

Post-Truth And Consequences

The global coordinated con job ends this week with Friday's OPEC meeting...

This week is starting off where last week ended - EM implosion, and mega Tech rally. Today flashed the Zuckerberg Omen - the dreaded scenario wherein the global financial system hinges on one massively overowned and overvalued Tech stock. This gong show isn't so much going to crash as explode...

I'm eyeing the early Feb analog, post Central Bank sponsored short-covering.

The Dow is bearing the brunt of "fun and easy" trade wars. Now down five days in a row, as Skynet works overtime to keep it together...

It's a bad time for the Zuckerberg Omen...

Everything else is good to go...

Sunday, June 17, 2018

MAGA: Make Alzheimer's Great Again

This farce only makes sense through the lens of an enfeebled, incontinent old man, debasing himself on a daily basis. Which is how it ends for all old men, by the way. Those in the mainstream media attempting to rationalize insanity, are forfeiting their own sanity to do so. In any social circle having an IQ above 5, this man is a pariah. To say that there will be rage directed at this man when he final implodes everything, is a vast understatement. In the meantime, keep up the good work...

"One minute I held the key
Next the walls were closed on me
And I discovered that my castles stand
Upon pillars of salt and pillars of sand"

Trump is now fighting wars on about 25 different fronts, and winning all of them. But only on Twitter. His TV ratings are through the roof. Trump's constant need for affirmation is his biggest weakness. He has to constantly find new ways to throw the rest of the world under the bus, to delight his base of demented hillbillies. He can count his friends in the millions and his enemies in the billions...

It took only a matter of hours for China to find Donny's wide open flank: 

This Is For The Kill

"Thou shalt have no cult leaders before me"

Global trade wars, accelerating rate hikes, accelerating balance sheet rolloff, global slowdown, EM implosion, all paved over with rampant fake-believe. The good news is that the party of hate, war, greed, and lying, lie to themselves more than anyone else. They have no clue they're drinking cyanide-laced Kool-Aid mixed by their own cult leader.

The cult of Donny:

Fake optimism is rampant - among businesses, consumers, and casino gamblers. But especially among RepubliCons, the party that has taken lying to level '11', under the standard assumption that someone else will be paying the bills. The right wing media has duly propagated these lies to ensure that the sheeple stay in line and they don't see it coming...

Trump is the final proof that the human race will believe anything and anyone. Except the inconvenient truth...

Friday, June 15, 2018

Get Me Bernie Madoff. It's Time For Shanghai Surprise.

Yes, again...

The just ended "most important week of the year for the world economy", was a week of epic hubris: make-believe nuclear deals, raising interest rates, inciting global trade wars, jamming IPOs out the door. All while Emerging Markets imploded in real-time. Fortunately Netflix and Go Daddy were ready safe havens, since the real safe havens no longer exist. Next week could be more interesting....

This week can be summarized thusly via the chart below:
Emerging market credit (local currency) is perched at the post-election stick save level. Meaning that Trump has crashed Emerging Markets twice - the first time just by being Trump. The second via tax cuts and tariffs. The intervening period was the global synchronized con job. The Nasdaq meanwhile is off in imagined realities land, deja vu of late 2015. The smart money (lower pane), is not betting on another con job. Because really, isn't one enough? 

To complete the circuit, the Fed just raised rates deja vu of late 2015: 

In $USD of course, the stick save failed this week. A function of EM currencies getting doubled teamed by Trump and the Fed. In dollar terms, it's already 2016 deja vu.

aka. 1997...

But what happened to implode EM currencies?

CNBC: What's Wrong With Emerging Markets
"I think everything started in mid-April, with the IMF meeting. Everyone went there with one theme in mind — synchronized global growth which would work with rising rates in the U.S."

But then, global synchronized growth turned out to be a global synchronized con job. Which means that threats of further Fed rate hikes were not going to "work". 

In summary, it was the day that International sweatshop workers shrugged, while global capitalism bet the farm on Forrest Trump and Go Daddy...

"Attack, attack, attack, never defend"
- Roger Stone, Trump Campaign Advisor

"Trade wars are good, and easy to win"
- Donny Chump

"For some reason I can't explain
I know St. Peter won't call my name
Never an honest word
But that was when I ruled the world"

I think we all see where I'm going with this...The Manchurian-Candidate-in-chief has picked up some bad ideas along the way. He's learned from the worst...

Thursday, June 14, 2018

U.S. And Them

Trump is oblivious to the fact that the Globalized sweatshop is funding his tax cut via the trade deficit. Why? Because he's a total fucking moron, according to his former Secretary of State...

Straw, meet camel's back:

"China is already slowing after a stronger-than-expected start to 2018, even before any new US tariffs on its exports."

So far, this week has featured escalating trade wars between the U.S. and its largest trading partners, Canada, Mexico, Europe, and tomorrow China. Meanwhile, the dictator-in-chief was praising the virtues of a Third World despot whose country has the GDP of Netflix. I kid you not. Unfortunately, the rest of the world can't afford to fund the AmeriClown...

Yesterday, the Fed threw Emerging Markets under the bus, raising rates this month and signaling an additional two rate hikes in 2018. During his press conference Chairman Powell also indicated that balance sheet rolloff is "going smoothly", contradicting what the head of India's Central Bank said on June 5th...

"Global spillovers did not manifest themselves until October of last year. But they have been playing out vividly since the Fed started shrinking its balance sheet. This is because the Fed has not adjusted to, or even explicitly recognised, the previously unexpected rise in US government debt issuance. It must now do so" 

Speaking of debt issuance, this week we learned that second quarter GDP is approaching Trump's 4% goal. The bad news is that we also learned this week that the 2018 deficit will be 4% of GDP. Meaning that Trump's smoke and mirrors economy is 100% smoke and mirrors:

"The budget gap rose 66 percent last month from a year earlier"

But where will all of that *free* money come from if the Fed is tightening? Oh right, the rest of the world, now getting monkey hammered by tariffs, higher interest rates, balance sheet rolloff, and asinine profligacy.

Meanwhile, for those who actually believe that consumption zombies throwing their last borrowed nickels away portends 4% GDP forever, the bond market would beg to differ. Treasury shorts are on the verge of getting final pole axed...

The global economy is in even bigger trouble, as the sugar high from the latest round of Central Bank stimulus wears off:

"China's economy appears to have hit a significant speed hump, with a number of key indicators across the industrial, construction and retail sectors slowing to either multi-year, multi-decade or record lows."

Economists at global investment bank Rabobank said investment growth, "was all shockingly weak by Chinese standards."

Yet, we should bear in mind that all of this fake euphoria has been sponsored by history's largest short squeeze to fund Wall Street's largest IPO pump and dump in four years:

Meaning that this is a one way trip to the sun...

The Bank of Japan meets tonight to complete the trifecta of money printing meetings, and associated short-covering:

"It is just not credible that the U.S. remain an oasis of prosperity"
- Greenspan, 1998 Emerging Markets crisis

Especially when the oasis is paid for by robbing the rest of the world...