Sunday, June 5, 2016

MEGA Flash Crash / No Bid Market: Base Case Scenario

"Printing money was their secret to effortless wealth"
When this is over, everyone will say no one was bearish enough. Including me. Seven years of lying, bullshit, corporate Shock Doctrine, Faux News, and Kardashians have cannibalized the foundations of the global financial system. All that's left is a casino in which perma-stoned zombies trade worthless pieces of paper back and forth while pretending to be wealthy. Blowing smoke up each others' asses constantly...

Like this:
Earnings Yield (E / P)

"Look, it's more free money"
The "Shanghai Accord" to weaken the dollar, was used as an excuse to onboard risk - oil, commodities, cyclicals, Emerging Markets, small caps, and short-covering. From that point forward, U.S. stocks decoupled from the JPY carry trade. Subsequent hawkish Fed-speak did nothing to reverse the downtrend in USDJPY, because Chinese outflows were overriding rising rate expectations.   

All of which means that the U.S. is now 100% decoupled from global risk, and as of Friday, the divergence is accelerating...

USDJPY, YuanJPY, Treasuries, Deflation, Global Macro and U.S. Macro

2am risk:

World stocks ex-U.S. 

4am risk

Europe Stoxx Composite 

Mega caps with small cap growth (red):

New highs


ZH: June 2, 2016
Financial Institutions Dump Stocks For 17th Straight Week

Price / Volume