Monday, July 24, 2017

The Big Long: Embracing The Melt-Up Icarus Trade

"Has monetary policy aided and abetted risk-taking? I hope so. That's why we did it" 

"First, private client cash levels have dropped to a record low as a percentage of total assets"

Institutional investors are also holding the lowest levels of cash since the start of the eight-year bull market

What's resulted is the so-called "Icarus trade," which has been characterized by the "melt up" seen in risk assets since the start of 2016.

Ironically, dollar implosion is what's making Emerging Market gamblers bullish, as the collapse of the U.S. is generating fake reflation via currency transmission:

OPEC/NOPEC is meeting today in Russia:

"Before discussing deeper cuts, let's abide by the cuts we've already agreed to"

This week we get to find out why despite crushing the entire retail sector, Amazon still has the lowest profit margins of any retailer. They are the first monopoly in human history to be unprofitable. When the rest of retail fully collapses, they will have high profits and zero customers.

"But there's a downside to flying too close to the proverbial sun — sooner or later, your wings will melt."

In summary:

A "big fall in markets" will be an "autumn, not summer event"

"Despite the gloomy late-2017 forecast from BAML, it's actually a great time to be an equity investor"

"Don't worry about getting out"