Rewind to December 31st, 2014
ZH: Hugh Hendry Is Smoking Crack Again
"China is set to record its weakest growth in GDP in 25 years. Yet it seems to have entered a bull market and may be where we deploy much more of our risk capital next year. That's because the recent exuberant run up in onshore Chinese equities seems to me to amply demonstrate the power of imagined realities"
Fast forward to now:
"China is set to record its weakest GDP in
This latest global Jedi Mind Trick took off post-Brexit compliments of globally coordinated Central Bank asset lubrication. Subsequently, commodity reflation trickled-through to CPI, causing Central Banks to believe that the fake-reflation they themselves generated was economic reflation.
"Global synchronized reflation"
Dilbert writer and newfound Ponzi pundit, Scott Adams, believes that the chasmic gap between Trump approval ratings and consumption sentiment, will resolve to the upside for Trump, albeit grudgingly. It apparently never occurs to any of these people that consumption sentiment might just resolve to the downside, thereby following Trump's approval rating and the collapsing Dow to negative infinity. Why? Only because it's ALL smoke and mirrors. Then again, my only credentials are not believing proven serial fucktards over and over and over again.
Adams is of course referring to this week's decade+ high consumer sentiment reading. Which ironically is also cleaved of any consumer retail purchasing. Apparently everyone is sitting at home answering consumer surveys in the belief that everyone else is out shopping. Which is basically how Clinton lost the election a year ago - 9 out of 10 media polls indicating she would win by a landslide. The Brexit vote, same thing.
Here is where it gets interesting, because outside of the geriatric-set who enjoy watching the same movie over and over again, we've seen this movie before:
The S&P 500 is following short-term rates (aka. the Fed) in a straight line higher.
It's the bridge to nowhere aka. global circle jerk:
Meanwhile, long-term Treasuries are pricing in collapsing retail, collapsing auto, collapsing restaurant sales, tighter credit, higher borrowing costs, stop me any time...
So far, the Fed has been wrong twice and forced to back off rate hikes, due to market "dislocations".
Who will be right this time?
Bond "guru" Jeff Gundlach got duly monkey hammered this week on his "no brainer" higher yields reflation trade. No brainer indeed. That's what happens when you throw the middle class under the bus, you never know when it's your turn to go next.
Japan's "breakout" to a multi-decade high (still lower than 1987) is getting a lot of news lately. Here is a chart of the U.S.-listed Japan ETF. Waves 1 and 5 are symmetrical in time and price:
"Don't tell us the ending!!!"
