Saturday, June 17, 2017

2015 x Y2K x 2008: EXTREME MUPPET RISK

Janet Yellen at her confirmation hearing:
“For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.”

Congress: "You had us at hello"

Which brings us to this week. To paraphrase this story (see the fine print I highlighted in yellow):

"In a sign of fake confidence, the Fed hikes rates despite softer economic data"

Speaking of fake confidence...

As we see below, deja vu of 2008, IPO (prices) peaked in 2015 and are now making a lower high. The difference now is that gamblers are onboarding massive late cycle risk and are extremely complacent, as we see from the VIX. That complacency is what is known as fake confidence compliments of serial psychopaths...

After the 2015 Flash Crash, the IPO market collapsed and gamblers imploded, which led the leading IPO investment company to say this:

October 2015:

But now it appears the dumb money is back again:

"As of the close on Friday, June 9, 2017, the calendar had produced 60 IPOs so far this year...As of the close on Friday, June 10, 2016, the calendar had produced 31 IPOs for the year to date."

Also this week, the largest IPO since Alibaba (2014), imploded back to the Wall Street IPO price and far below its first day's trading range:

It's safe to say this last pump and dump is running out of time and dumb money...

Here's another muppet show that's ending...

"After I first heard about the bitcoin scheme, I was so excited I couldn't sleep. It's like buying a dream"

"Everyone says we can't rely on Japanese pensions anymore," she said. "This worries me, so I started bitcoins."

Bitcoin (Bitstamp, $USD)