A Ponzi scheme is an accumulated liability without a corresponding asset. The inbound flow of capital pays for the outbound flow of "interest", fooling everyone. Only when the capital call comes do they all realize that there is no capital...
This is the S&P earnings yield, meaning that gamblers are paying ever-more, for ever-less, as more tools throw money away at the casino. And we thought 2008 was bad...
Ponzi scheme visualized:
If Bernie Madoff knew his fund was about to implode, wouldn't he have left the country? Wouldn't he have bought an island somewhere? Of course. But he didn't know when his fund was going to implode, so he assumed the con job could go on forever as long as inbound capital exceeded outbound yield. An ever larger flow of fools. And then one day in October 2008 during the global margin call, the last fool was found. Sounds familiar.
Globalization's main product is entitled sociopaths. People who believe that because they were born in a particular country or went to the right school, they are entitled to something other people can never have. It never occurs to them that not only do they not deserve "more", but they can't preserve "more" either. In other words, you can be ignorant, or you can be arrogant, but you can't be both.
Contrary to popular belief, growing global poverty is not "bullish", because it means that the price of everything has to go down. Say for example oil:
Global deflation aka. 'poverty' versus oil:
"Re-pricing" is underway...
Momentum con job visualized:
Ironically, the only thing holding the market up on Friday (OpEx) was 3x leveraged oil, enjoying a massive 14% counter-trend rally on average volume. Meeting resistance at prior support...
Now down only -20% from its highs...
The Globalized Ponzi Scheme has failed, but the people at the top will be the last to find out. When they all reach for 'smart beta' at the exact same time, and realize that 'smart beta' is just a marketing term for "bagholder" and therefore all that's left is HFT stepping aside for the last time in a limit down no bid market.
The last fool has been found:
"Going into next week, going into that Brexit, you are set-up for new all time highs in the S&P 500"
Rydex cash balances inverted:
