Sunday, July 30, 2017

"Going Out Of Business. Everything Must Be Bought"

For about five minutes this past week Jeff Bezos was the richest man in Babylon. This week we also learned that going out of business is accretive to GDP. But only for a time.

Which is the foremost lesson from Globalization, yet to be learned by the de facto Idiocracy:

"Real GDP has never been higher"

"All commodities must be sold"

The holy grail of gambling is to find the perfect crash indicator that both indicates the economic cycle is ending and that capital has been sufficiently misallocated to create a panic crash. This week we got news that the Fed is done raising rates for the foreseeable future, 2nd quarter GDP missed expectations, Transports are crashing, and the last retailer standing has imploded. Arguably the "indicator" light is flashing red alert. But as usual, the burden of truth is on bloggers instead of on the lamestream CNBS media who've been peddling bullshit for eight years straight...

Historically, the casino has ALWAYS peaked ahead of the economy. In Y2K by a full year. In 2007 by a few months. In this cycle, Central Planning for billunaires assures that the economy will be in a (back-dated) recession before gamblers realize they're fucked company. Nevertheless, the burden of truth somehow still rests with us realists. One blogger believes he's found it - recreational vehicle sales. 

"What’s the last big toy you buy when things have been good for a really long time and you already have all the other toys? An RV, of course. A dubious thing to own if you already have a house, but when the good times seem likely to roll on forever, why the hell not?"

Thor Industries is the largest RV manufacturer in the U.S.:

Meet the real Martha Fockers
But really, do billionaires buy winnebagos when they're feeling flush? No, they buy artwork.

Which is what makes this chart compelling: It's Sotheby's art auctioneers:

And of course, EM currency/stock speculation relative to commodities rolling over, embeds both a speculative and economic element of risk as well:

"Going out of business was accretive to GDP"

But the chart of the week has to be this one showing the change in private inventories, which arguably reflects the rate of retail expansion and/or contraction. It's also a key part of GDP, although currently overshadowed apparently by the large number of liquidation sales. 

Recall, this was the narrative we've been told to believe throughout this economic obliteration i.e. Amazon, with 5% of total sales, imploded the shopping mall, dollar stores, sporting goods, specialty retail, home improvement, and grocery stores.

Because everyone is buying broccoli online now:

In reality of course, Amazon was merely saving Whole Foods from Whole Foods:

Then two weeks ago, they started selling refrigerators online, which took out home improvement stores:

This week they started selling Mocha Frappuccinos online. Which proves my hypothesis that the people at IBD are as dumb as a fucking brick:

Goodbye CappuccinoConomy, we hardly knew ya - the 'Free Trade' narrative that the U.S. would outsource manufacturing and then obtain competitive advantage in Cappuccino production, just went out the window...

And of course, also this week Amazon imploded Amazon, but of course, it's just another buying opportunity:

"The stock AMZN, -2.48%  slumped $25.96, or 2.5%...But history indicate that is actually a pretty meh reaction to results. Over the past seven years, the average one-day reaction, in either direction, to earnings reports has been 7.4%." 

The inconvenient reality strikes dumbfuckistan again...

Island reversal of fortune, visualized:

All of which means that Amazon will be selling Winnebagos next. And then the underwear shall be mighty stained.

Bonus chart: