Monday, February 8, 2016

The 0% Faustian Bargain: Reality Is Hunting The Idocracy To Extinction

2008 was the Idiocracy's wake up call that Globalization had failed. Forty+ years of imported poverty had culminated in 1% Liar Loans aka. "subprime". True to form, the Idiocracy ignored the warning and instead recycled the resulting tsunami of imported poverty into 0% poverty capital and a doubling in debt. Because there's nothing like borrowing your way out of a debt crisis, with Paul Krugman's imprimatur. Then they put Bernie Madoff in jail, while giving the psychopaths who imploded the Middle Class, a free bailout, on their bets against the Middle Class. Fucking genius.


Subsequently the 0% found its way into Fracking, London Penthouses, Vancouver crack shacks, ghost cities in China, revenueless Biotech, *special dividends*, stock buybacks, Netflix, stop me any time. One by one, each and every asset class has been getting obliterated - country by country, asset class by asset class, sector by sector. 

Today, every U.S.stock sector was red at the lows, until Skynet staged another vertical rally which will have a shelf-life measured in hours. Today's top performing Big Cap was once again, Exxon. One of the "Dogs of the Dow" i.e Dow stocks with highest dividend yields. The last refuge of 0%:

DOD:S&P ratio:

Consumer staples were red today, but the KMB:SPX ratio hit a new high, due to relative strength. Looks identical to 2008...

The last two "integrated oil" stocks that can be owned: Exxon and Chevron. Exxon is 2x overvalued, Chevron is 3x overvalued now:

Exxon:Energy sector ratio:

The last time Exxon rolled over it wasn't good for the S&P. I'm sure it will be different this time...