Sunday, March 5, 2017

FOMOP: Fear Of Missing Out On Ponzi

What year is it?

Mutual Fund Cash Balances:

Wealth inequality at all time highs
New overconfident Republican President wins based upon a "pro business" platform
Rampant speculation at the end of the cycle causes largest crash in U.S. history, -90% in three years


Blow-off top in anticipation of impending Reagan tax cut
Largest one day Dow crash in history

Asian Financial crisis caused by Yen hot money outflow and collapse of massively leveraged Long Term Capital Management hedge fund

DotCom melt-up
Junk stock leadership
Fed playing catch-up on interest rates

Multi-year debt binge on low interest rates leads to overleverage and global banking crisis
Falling dominoes are ignored all the way until Lehman
Massive short-covering rally just prior to collapse

Flash Crash for unknown and unresolved reasons
ETF stop losses trigger circuit breakers leading to impaired price recovery

Fiscal cliff debt crisis

EM, Oil, commodity collapse caused by Fed policy diverging from rest of the world (ROW):

China currency devaluation caused by strengthening of U.S. dollar ahead of impending interest rate increase

All of the above, plus:

Highest debt levels in U.S. history
Longest period of low interest rates in world history
Weakest GDP growth in U.S. history, outside of recession
Global GDP and trade slowing
Largest oil glut in world history
Lack of hedging due to Central Bank accommodation
GDP negative net of debt