Sunday, April 2, 2017

The Lying Days Of Trapped Capital

The plan was to turn the sheeple into indentured debt serfs who would question nothing. "It was all going so well", but now it has devolved into the biggest circle jerk in human history. Momentum is the last asset class...

An aging population exhibits an overwhelming preference for return on capital over return on labour, hence "Supply Side" PonziNomics. Every industry, job, and generation had to go into the hopper to make the quarter. Unfortunately, there of course exists no so such thing as "Supply Side" economics. There used to be Supply and Demand, so now there is Supply and Debt - which is what Supply Side economics represents: indentured debt serfdom. Nevertheless, as the population has aged, the willingness to overlook corporate malfeasance, and financial alchemization, has grown commensurately. 

Now of course, there is a "limitless" supply of capital yet no return on capital. Globalization being what it is, inherently, a zero sum game, capital circles the globe alighting wherever it can find minuscule yield or momentum.

Momentum itself is the last asset class. Pumping and dumping one sector/asset class after another until there is no inbound dumb money left to monetize. Moving on to the next great "opportunity". 

The deflation trade was picking up steam into the election, but Trump pulled reflation out of the hat for one last false-advertised backup in yields. The vaunted tax cut. 

Unfortunately, capital has nowhere to hide. Contrary to Idiocratic belief, massive investment in automation and robots will not improve ROI. Why? Because robots don't go shopping, that's why.

Herein lies the problem, only one retailer is surviving so capital has crowded into one stock with a P/E ratio of 180, you know, "the first trillion dollar company in history", blah, blah, blah...

So all of those man-boys talking about minimum wage imploding what is left of labour, will find out the hard way that capital is what is about to be final imploded.

It all ends with the final rotation from stocks back to bonds, because reflation is a lie, and because the stock/bond ratio is the highest since 2007. Unfortunately, "no one" sees it coming, because they're too busy chasing the next 'big' thing, while blowing smoke up each others' asses constantly.

Treasury bond speculative short interest:

The unwinding of Trump's reflation lie, is just getting started...