"No Mas!": Globalization Can't Be "Renegotiated"

The U.S. needs global capital even more than it needs cheap junk. What has been taking place since the election is quantitative tightening via higher bond yields. The toddler-in-chief doesn't get it...

The status quo has a fatalistic inertia powered by unprecedented amounts of global Central Bank liquidity; which has been deployed in investments that extrapolate indefinite insolvency. As we learned in 2008, no one is managing systemic risk thrown off by accumulated morons...

I just watched the movie the Big Short, because I wanted to recall how it felt back in 2007/2008 when the lamestream everyone was in acute denial. Like now...

I read the book years ago, but the movie did a decent job of explaining an arcane subject. There are many takeaways from that era, but for me the overarching theme is that when liquidity is flowing, the banks and Wall Street will turn a blind eye to everything. Because they are in asset accumulation mode. And AUM (Assets Under Management) is everything. 

For their part, the media know nothing about financial markets and the sheeple know less than nothing. 

Therefore if 2008 was an atomic explosion caused by 1% for 1.5 years, this will be a thermonuclear explosion created by 0% for 8 years. At .5%, U.S. rates today are still lower than they were during the post-Y2K nadir.

Which gets me to my next point, the evolution of bubbles...

Below I show the three bubbles: DotCom, Housing Bubble, and today's mega-bubble. Overlaid is the price momentum oscillator. Since Y2K most closely resembles the current bubble, I use that as an example. Phase 1 is the strongest % gain. In phase 2 of the rally, % momentum begins to wane. Then the rollover, then short-covering. Then crash.

What makes this bubble different than the prior two is the amount of global monetary stimulus applied during the rollover phase. Unprecedented. Hence, this current one year short-covering phase has led to an overthrow top above the rollover phase. 

Which means that the crash will come from a higher level.

America First Last
What also makes this bubble different, is that all of the global stimulus flowed to the U.S. and little if any went to the rest of the World, which is stuck in 2013:

$USD

And when the hot money leaves, the crash begins...

"No mas"
The dollar is getting weaker and weaker...

And as far as extrapolating indefinite insolvency, think junk bonds and oil. Or Saudi Arabia and oil...