Sunday, December 25, 2016

Peace On Earth. Goodwill Towards EVERYONE

"Rome seeks its own glory, wars against other peoples to subjugate them, revels in material existence, lives off the work of slave labor, allows many to die of poverty and starvation, and promotes entertaining circuses and gladiator spectacle. The messianic age will be recognized when an end is brought to the rule of wickedness"

The Globalized exploitation scheme would only end in a way that the fewest number of people would see it coming...Although according to my blog stats which went parabolic this month, a few people have figured it out:

2008 revealed that Globalization is a zero sum game with the wealthy extracting their gains at the expense of everyone else. Even some of the most ardent apologists for global exploitation have belatedly admitted that it's more of a fantasy than a reality. Bearing in mind that Pew Research considers someone "middle income" if they live on $10 per day. So they better start praying they never have to join the global middle class.

Of course the collective shrug from learning that this is all just an exploitation scheme came in the form of "It can't happen to me".

Therefore BTFD: "Buy The Faustian Dow"

Dow versus rest of the world:

I started this Ponzi World blog exactly 10 years ago this month, in 2006, at the height of the housing bubble. Back then there were myriad blogs excoriating the banks and mortgage industry for their rampant malfeasance. Behind the scenes, Wall Street was secretly building up their short position against the middle class, which due to the systemic meltdown they caused, would subsequently only get paid via the 100% taxpayer funded bailout. That only cost a doubling in 225 years worth of U.S. debt.
Therefore, to get everyone on the same page, this post-2008 100% confidence game had to end in a way that was totally inverse to 2008's Big Short i.e. Wall Street wouldn't see it coming...

And by all accounts, it's Mission O'Complished

Hedge Fund / S&P relative performance 

In other words, this post-2008 confidence game featuring Globalization's disintegration, could only continue because the bar kept getting lower and lower and lower. Like an Old Age Home where a good day is when they don't shit their own pants twice -  every metric got rationalized away as "not as bad as expected". That sums up 8 years of Obama's peddled fiction paid for with 100% borrowed GDP. 

As I've shown many times, the S&P earnings yield has fallen in lockstep with Global GDP. Which makes perfect sense since Emerging Markets are the marginal buyer of everything. So when they left the party, so did marginal revenue.

The bar gets lower, and lower, and lower, and Rest in Peace:

However, the Minsky Moment was Trump's election and subsequent annihilation of EM currencies and global bond market. The rest of the world could ill afford to pay for even more reserve-currency profligacy...

And yet, Wall Street mistook the backup in REAL yields to be reflationary when it was actually deflationary. They believed that wages were rising, hence a true recovery was taking hold. 

However, they forgot that they already monetized the middle class, hence wages are not rising and higher interest costs are now crowding out demand:

U.S. wage CPI:

Gold, EM currencies, C$ warned that the inflationary blip was transitory...

As well as copper:

Nevertheless, gamblers fell for it and went ALL IN on financials at the end of the cycle...

However, no market better illustrates the cost of serial lying about the state of supply versus demand than the Oil market. Fake headline after headline has been pumped out of history's most corrupt industry as they've attempted to suck speculator capital into the market to bolster oil prices. Which has keep the industry afloat since 2014 as they continually short the futures market. 

Here we see the US Oil ETF which embeds the true contango futures-based rollover losses. Which has gone NOWHERE for an entire year straight, despite non-stop bullshit about an oil recovery. 

But oil can't recover now, because Forrest Trump's tax cut took care of that, by eliminating demand:

EM Currencies with Oil:

And hence, Globalization itself hangs by a wafer thin con job...

Banks and Utilities:

And since interest rates (red) have peaked post-FOMC - just like they did every other time, financials (black) are overdue to roll over any minute now...

Regional Banks