Wednesday, November 4, 2015

Final Phase: Obliterated By Denial

The monkeys have been hammered real good. So what to do? Double down. We've now entered the deadliest phase...

Unhedged funds shellacked by volatility. Etraders muppetized by IPOs. Chinese housewives obliterated by internet stocks. The reality ground and pound has taken its toll. Now the only way they can get their money back is by throwing the rest away. Only one major index in the entire world is at new 52 week highs: the Nasdaq 100 aka. Facebook and Amazon. 

Hedge fund manager (Hugh Hendry):

One year ago: 
"There are times when an investor has no choice but to behave as though he believes in things that don't necessarily exist...In the long run we will come to rue the central bank actions of today...China is set to record its weakest growth in GDP in 25 years. Yet it seems to have entered a bull market and may be where we deploy much more of our risk capital next year. That's because the recent exuberant run up in onshore Chinese equities seems to me to amply demonstrate the power of imagined realities."

Fast forward to now
How I Learned to Stop Worrying and Love the Bomb…
"Today we advise you, don't panic..." [I don't get paid if you panic]
"We certainly believe that if we had been forewarned two years ago that the dollar would rise versus selected EM currencies by 50% and that important commodities such as oil and iron ore would fall by 50% we would never have been able to predict just how orderly things have turned out at both the company and sovereign level. The turmoil it seems has remained contained within financial markets in a very curious way. Like we said earlier, perhaps it’s time to stop worrying and love the bomb?"

The S&P / $USD ratio peak has coincided with market tops for forty years, but "this time it's different"...

Wall Street analysts:
"Wall Street strategists who normally live and breathe data are now pushing a curious new narrative: Don't believe the data. More specifically, it's become routine practice lately to disparage economic numbers as being not representative of underlying strength that the headlines just don't seem to verify."

Channel stuffing visualized aka. booking fake revenue

Chinese Gamblers
"Doubling down on the most volatile equities has become a go-to strategy for China’s 96 million individual investors as the stock market shows early signs of recovery."

“I lost most of my money investing in ChiNext stocks, but they are still worth buying,” 

MW: Nov. 4, 2015
"The Oil Price Recovery Finally Seems To Be Upon Us"
Oil in storage (red) with oil price: Peaks in storage levels correspond with peaks in the price likely due to futures spreads narrowing making additional storage unprofitable...

"Drink up bitchez, you only have a little bit more to go"