Thursday, June 30, 2016

CasinoNomics By Harvard aka. Artificial Intelligence

The way it works in a nutshell is that you gamble your life savings away at the Dow casino while the entire world implodes around you. Then you say you were on Season Seven Kardashians and didn't see it coming. They won't think you're an idiot, because they were doing the same thing...

"There IS no alternative"

I finally figured out how CasinoNomics "works". First and foremost, the casino is the pot of gold at the end of the rainbow that makes the status quo seem to "work". Devoid of any real underpinnings, which have long since been sold for special dividends...

Warning: This will sound really stupid, but you should see the people who bet everything on it...

It starts with global Central Banks which provide unlimited 0% poverty capital for gambling purposes. This money is not used for investment since there are no investments worth making under globalization, since there is no demand. The money is therefore only used for trading pieces of paper back and forth in the secondary market aka. "Casino". Where was I...Momentum algorithms - "Skynet" - take this *free* money and they deploy it in whichever markets, sectors, and stocks exhibit the highest relative strength and the strongest momentum. And they create a momentum feedback loop that lures in day traders and other speculators. The next thing you know, there's a global RISK ON "rally". Eventually, the last fool is found, momentum rolls over, a top forms in time, and then it crashes. Because it has no support below. At that point, "sideline capital" rushes in to stabilize the market, which generates a short-covering rally attracting the momentum algos, and the cycle repeats itself. 

Don't worry about fundamentals. There are none.
Most people on Wall Street don't trust charts, they prefer to guess where profits won't be a year from now. They call it "fundamental analysis". Nevertheless, fundamentals have nothing to do with CasinoNomics. Things like profits, global growth, employment, have nothing to do with momentum. Therefore, capital is constantly fleeing "value" sectors towards momentum, thereby obliterating active managers.

Why does CasinoNomics even matter?
It's all important because it gives the illusion of fake wealth that makes the status quo possible. Without the illusion of eventual retirement, the corporate disposable batteries wouldn't show up for work, nor would they stick around for mass layoffs to make the quarter. Therefore the illusion is all important. 

Here's where it gets interesting. The global casino is already basically out of order. It's had a few too many crashes. Likewise, Japan, China, Germany, France, Italy etc. are played out. That leaves the Dow Jones Illusional Average as the only game in town. There is no alternative. Although there have been two crashes in the Dow already. Fortunately, the de facto Idiocracy didn't notice.  

Oh, one more thing I forgot to mention. The crashes only occur when Relative Strength is weak. You know, like this...

All aboard, Aye:

The Global Casino has had three crashes so far, but that's not enough to prove my theory, from an Idiocratic standpoint:

European Stoxx Casino

Japanese Casino:

World's second largest economy
When I was in the airborne, they used to say "don't climb the risers", meaning don't try to climb your parachute before you hit the ground. I've seen guys do it, and it's as funny as it sounds. 

Kind of like this: