Way back in 2007/2008, Wall Street muppetized the entire planet culminating in Lehman. Goldman Sachs & Co. made bank via the infamous "Big Short" of subprime. In the event, New Century Financial, Bear Stearns, Countrywide, WaMu, Fannie/Freddy, Merrill Lynch, AIG all collapsed, but when Lehman collapsed "No one saw it coming". Of course not.
Fast forward, and for six years straight, Wall Street has been monetizing a new set of muppets one asset class at a time. Unfortunately, however, there is no subprime to short this time, so now it's Wall Street's turn to get muppetized, and of course they don't see it coming...
This just in:
MW: Oct. 14, 2015
Trading revenues down -15%
Financial stocks: Who wouldn't want to buy this chart Flash Crash and all...
Meanwhile, some major hedge funds closed this week (Fortress, Bain) while commodity muppet master Glencore has been monkey hammered:
But, as one would expect of all aspiring muppets, there is major denial in big money country:
MW: Oct. 14, 2015
I will spare the reader the entire boatload of denialism, but the key takeaway is that the "cycle" can't be ending now..."it's too early"
Mostly because the Monetary dopium cycle hasn't ended yet
This is the dumbfuck logic of the day in a nutshell:
In the period 2000-2008 (below), liquidity expansion lasted two years and tightening lasted ~four years. In this cycle, liquidity expansion has lasted seven years, so that means there's four more years in the economic cycle. Right?
Average S&P stock (red) with interest rates (black)
And of course, "there has been absolutely no sign of euphoria" in revenueless Biotech, Chinese internet stocks, venture unicorn valuations, Amazon, Facebook, Netflix or anywhere else...
Nasdaq 100 with Rydex asset allocation aka. "Deja vu"
"Earnings valuations are reasonable"
Corporate profits versus GDP:
"Buy the fucking dip"
