Ponzi World (Over 3 Billion NOT Served): January 2017

Tuesday, January 31, 2017

UNPRECEDENTED PONZI RISK

Stoned gamblers have unprecedented exposure to their Anti-Christ trade

Prove it.

Money market cash balances:

Rydex bearish asset level

Active manager risk exposure

VIX (S&P 500 implied options volatility)

Net short speculative futures on VIX (red)

10 year Treasury bond short futures (total)

Index put/call (hedging) ratio

Crude futures speculative net long positions:

Insider sell/buy ratio:

Long futures positions in the Russell 2000 (red) with the bank index

"It's a good thing we've never seen this before. Duh..."

TrumpPlosion visualized via the 5 year Treasury:

We saw this movie last year by the way. It's called the self-imploding rate hike. Just add serial conned dunces and unprecedented risk exposure...

Four rate hikes in one month:

With Goldman Sachs aka. "The Dow"

"Being A Dunce Is Different This Time"

Trump is a false messiah leading the sheeple gleefully into the abyss. The Trump rally was 100% Wall Street fabrication...

Exhibit A: record bets on the indefinite status quo amid growing global turmoil. What could go wrong?

VIX futures speculative net short position:

Make old men honest again...
One thing all of these dunces across the entire political spectrum share in common is that they don't see the status quo consumption oriented competitive lifestyle ending now. "More" is the standard assumption. Forty-eight years ago NASA slingshot a six million pound rocket a quarter million miles to the moon and back at 10 times the speed of a bullet. Today, circus clowns are fighting trade wars on Twitter, 140 characters or less. There is no such thing as exceptionalism anymore, if there ever was such a thing. All there are is old men like Pat Buchanan harking back to something that no longer exists. A way of life consumed by special dividends. The future belongs to those who have the humility to accept that "we" are all the same after all. Those who've built an imaginary bridge to the indefinite "more", with the assistance of trusted psychopaths, will learn the hard way. Instantaneously.

U.S. gamblers are buying risk, the rest of the world is selling it. Today was deja vu of yesterday - weak morning, followed by late day rally ending below the prior close.

Any questions?

Tomorrow, the Fed has its chance to FINAL implode the Trump trade by indicating they see nascent economic weakness. Anything but a hawkish tone will lead to further implosion of the fantasy reflation trade.

The final detonation sequence:

Oil's backtest of the trend-line failed:

LOCUS OF MEGA-PLOSION

This is a close-up view of the VIX futures position. Gamblers are betting that extreme complacency becomes more extreme. Which means that the cost of hedging capital is now 100% binary. Now you can hedge. Now you can't.

We see how it worked out the last two times at these levels. The VIX spiked immediately afterwards...

The volume oscillator is coiled:

The Goldman Dow

Doh!

On balance volume

In other words, the entire Trump rally was 100% late stage blow-off manic fantasy

Fabricated by financial asset managers

Who else?

Crude oil speculative net long futures

New record high this week:

BTFD: Buy The Faustian Dow

The Idiocracy has an attention span of a coked up flea. Weak pay growth was 'good' for stocks for eight years straight, but now it's the kiss of death.

Every piece of bad economic news now, is bad for stocks...

For eight years straight, stocks rallied amid bleak economic data and the weakest recovery in U.S. history. Debt-adjusted, the economy was in recession the entire time. Every time the jobs report came in weak, stocks rallied. Bad economic news meant that Fed dopium would keep flowing, hence the deflation trade was on in full force. The collapsing labor participation rate and mass outsourcing were of no concern.

All of that magically changed in 2016. The reflation trade was on - they bought cyclical junk stocks with both hands and therefore needed to rationalize after-the-fact. Therefore they magically forgot about the special dividends and stock buybacks paid for with mass layoffs during the preceding eight years of economic malfeasance.

Unfortunately, that means that bad news is now bad news. Because the reflation trade requires HIGHER interest rates, not lower interest rates:

"The latest data suggest that inflation might even be slowing rather than rising"

"Markets are operating on the assumption that we are in a rising interest rate environment...KBRA believes that this assumption deserves some skepticism"

Now, amid weak economic data compliments of the Fed and Trump, the dollar, junk stocks, and the short bond trade are all unwinding at the exact same time.

Labor Market conditions 12 month moving average
One of these is not like the others...

Trump and the Fed hammered the economy via higher rates and stronger dollar:

The BOJ pounded the dollar lower last night, now the Fed could do the same...

USDJPY

"No greedy serial fucktard saw that coming"

Monday, January 30, 2017

Prepare For High Beta Implosion. Like Last Time...

What we've learned from history is that sheeple don't learn from history. The same zombies can get conned by the same psychopaths over and over again. Who knew?

The past year's Anti-Globalization rally was led by the junkiest cyclical stocks. These are stocks that are highly leveraged to economic reflation, which unfortunately happens to be a late cycle fantasy. You know, like last time...

The high beta ETF relative to S&P, one year performance:

I think we all see where I'm going with this...

Let's take a look at the top holdings:

These are the stocks leading the past year's rally:

The top holding is Chesapeake Energy the oil and gas exploration company whose CEO died in a 'mysterious' car crash one year ago, a day after being indicted for bid rigging: