Monday, February 27, 2017

The Clown Is Busy. Hammering The Last Nails Into the Coffin

Ahead of his joint speech to Congress Tuesday evening, Trump is pounding the last nails into the coffin of his fake reflation rally and the dunces who bought into it...

Perfect. Hold that position:

In addition to cutting taxes for everyone and every corporation, while raising defense spending by $54 billion, Trump promises to "spend big" on infrastructure. And just like his kids won't be the ones going to war, similarly, none of this is his money, since we still have no idea if he even pays taxes, being the first Emperor in U.S. history to not release his tax returns...

The heavy construction index has had a good run. But unfortunately these stocks are massively leveraged to the rest of the world (black):

Rest of World risk. Visualized:

Meanwhile the troubles in retail go beyond the "pricing in" of a border adjustment tax:

"The number of U.S. retailers ranked at the most-distressed level of the credit-rating spectrum has more than tripled since the Great Recession of 2008-2009"

The rise is part of a wider trend...that has retail replacing oil and gas as the most-troubled industry.

Jobless consumer risk. 

Fake reflation risk:

Recession/defense stock risk...

All three funds have been investor favorites since November’s election. The iShares fund, the largest of the trio, with about $2.3 billion in assets, has seen inflows of $1.2 billion since the election, more than doubling its assets in the process

Stock/bond rebalance risk

Global financials risk

Flight to safety risk

Hot money risk

Oil risk

China risk

Complacency/exposure risk

And of course, volatility risk: