Saturday, April 1, 2017

Tax Cut Fever aka. Fiscal Faceplant

Zombies who didn't learn their lesson about trusting banksters in 2008, are going to get their chance to learn it now. Contrary to ubiquitous Idiocratic belief, the free-money bailout didn't fix the corruption problem...

Somehow the rapidly fizzling U.S. reflation rally has now morphed into buying European value stocks. No zombie questions it. In other words, global capital has nowhere to hide in risk assets, and the false narratives attending each rotation keep getting dumber and dumber. This week's short-covering rally reminded me of October 2008 when stocks rallied into the TARP re-vote. And then the wheels came off the bus.

Here is how that looked:

The week following the TARP vote was short-covering hopium.

Like this week:

Fiscal Faceplant
Five year yield (red) with banks:

"And then Wells Fargo was selling fraudulent debt products to its customers"
"You mean, again?"

The hot money IS going home...

Rampant lying by banksters deja vu:

Following several weeks of scandal at Canadian banks due to the 2008-style "over-selling" of debt products, the industry-captured Financial Post asks the banks' own EconoDunces if Canada has a debt problem. Asking a bank if there is a debt problem? 

FP: Debt to Income Ratios Don't Matter Anymore
"To compare Canada today to the U.S. in 2006 is not only wrong, it’s also irresponsible"