Tuesday, May 9, 2017

TrumpFlation: The Jedi Mind Trick For Weak Minded Tools

Is wearing off...

Follow the hot money:

When the Jedi Mind Trick used by Trump, the Fed, and OPEC finally wears off, this shit show will implode with extreme dislocation. As it stands, the entire charade is hanging by the thread of short-term U.S. rate hike expectations, which somehow keep ratcheting up every single day in the face of persistent economic weakness...

Today, from none than the Fed itself...
"the steep drop has nothing to do with calendarization or a base effect, and everything to do with declining demand for the product among America's businesses, a concerning deterioration in an economy that is reportedly improving, and where companies would be willing to take out new credit to fund expansion."

Easing Commercial and Industrial lending standards may be most important takeaway, even as demand declined"

When short-term Treasury yields roll over, banks will implode off of the right shoulder of the head and shoulders top. As we see, the bank rally is not keeping pace with rates:

As will the dollar which is getting weaker and weaker even as rates rise...

Long-term rates are in WTF??? mode

The bond market only gives a ~50% chance that the next rate hike sticks around a year from now, as deflation is flattening the yield curve:

Don't try this at home

The Jedi Mind Trick is wearing off: