Thursday, May 11, 2017


It's clear that all of the lies are going to implode at the exact same time, amid record complacency and record highs...

All of today's thought dealers have the same thing in common - their egos are bigger than their brains. They would rather bullshit non-stop than to admit they are wrong. Mainly because to admit they are wrong now would be to admit that they've ALWAYS been wrong...

Start on the Fiscal side with the long awaited tax cut. The reality is the cupboard is bare, and Federal tax receipts are tanking. Which is why the deficit is widening. 

In other words, a fiscal stimulus package is 100% fantasy. And per Trump's own admission, by September, the government will be in shutdown mode due to the debt ceiling.

On the Monetary Policy side no one knows what the hell the Fed is doing, especially the Fed. Their obsession with sentiment polls over hard data (GDP, wages, loans, retail sales etc.), has them sleepwalking into a buzz saw:

And on the oil side, we now know that OPEC's vaunted production cut served to recapitalize the U.S. shale sector leading to a deja vu of 2015.

But here is the real problem for oil - there has been literally no demand response from the collapse in crude prices. Since 2014, crude has fallen ~55% while demand has risen only about 6% in three years. Therefore, global daily oil revenues have plummeted, putting all of the producer nations in dire straights:

Global daily oil revenues (red): 

No surprise, oil backtested the previous support line and then rolled over...

All of which means that shock and awe in the casino is lurking around the corner despite record complacency and low volatility...

But as long as gamblers still have Tech...

WolfStreet: The Great Narrowing:
"Over the past 10 weeks – so since March 1, 2017 – five stocks in the S&P 500 index have gained a total of $260 billion in market value: Facebook, Apple, Amazon, Netflix, and Google

"And the rest of the S&P 500? In those 10 weeks, it went absolutely nowhere. Which means this: the remaining 495 stocks in the index lost as much in total market capitalization as the FAANG stocks gained."

Daily Money flow