Monday, February 15, 2016

The Madoff Moment aka. Global Third Wave Down.

"At the end they were trading worthless pieces of paper back and forth pretending to be wealthy"

12 week realized volatility (S&P) w/NYSE Composite:

"Only printing money can increase the value of stocks. It's called CasinoNomics. In China they call it 'Shanghai Surprise'"

Central Banks propped up stock markets while economies collapsed. Monetary policy was handmaiden to collapse. Now Central Banks are ALL IN as stock markets get repriced based upon fundamentals and solvency instead of liquidity. Generation Madoff doesn't know the difference between liquidity and solvency, but they will learn. What some dunce paid for a stock last week has no bearing on what it's worth today...

The Global synchronized rallies get shorter and steeper. We don't know what time zone the Madoff Moment will begin, but we know it will go 24/7 thereafter...

Case in point, the Nikkei had its biggest decline since 2008 last week and its biggest rally since 2008 last night, on news that economy is in recession:

In other words it bounced off the support line:
Down -28%, up 7%
Current price level is blue arrow, JPY in red

This is the third rally. Volatility is highest since 2008:

European Stoxx600 Composite. Same idea:

Shanghai Surprise Visualized
"Surprise motherfuckers, printing money doesn't work..."

"Only CasinoNomics can fix this. We're using it right now in our own business..."

"Have we ever let you down or shorted your mortgages, recently?"