Monday, November 6, 2017

Turkey Life aka. Global Synchronized Hyper Crash

Turkeys think that low volatility means low risk. When it's the exact opposite.

ZH: 1001 Days In The Life Of A Turkey

The story of globalization is excess profit extracted from labour markets, leading to surplus capital chasing its own tail from one asset class to the next while inventing fake narratives along the way. The system ends abruptly when the people who put their full faith and credit in it, realize belatedly that they're dumbfucks...

When markets didn't fully implode in 2015, that reinforced the self-destructing BTFD strategy. The rest will be history...

"Volatility is now an input for risk taking and the source of excess returns in the absence of value. Lower volatility is feeding into even lower volatility, in a self-perpetuating cycle, pushing variance to the zero bound"

What is happening now is completely deja vu of 2014/2015, except without the slightest hesitation whatsoever. Gamblers were vindicated for not panicking during the last round of turbulence. Which will be their undoing. 

Most of U.S. market risk is transmitted overnight from the rest of the world via the futures. The machine-like precision of this latest rally has given the delusion of perpetual low volatility:

As we see circa 2014, BTFD was not as finely honed a strategy. There was still intermittent panic:

This self-reinforcing delusion has incentivized the mega risk that we see now:

As we see here, China Tech made a blow-off top today...

Here we see that the Emerging Market gamblers are ignoring currency and credit risk. Similar to the U.S., they are decoupled from reality:

During the 2015 turbulence, consumer staples were a safe haven and exhibited relative strength. Now, they're already sold out, deja vu of 2008:

The breadth divergence is extreme:

When fracking stocks and Japan are leading, you know that powerball gamblers are deep into the sniffing glue phase...

We don't know what time zone this global delusion ends in, we just know that it will implode 24x7 without interruption when it does...

Central Bank sponsored BTFD was a vacation from reality, which will end instantaneously:

Causing maximum pain

Trouble in paradise

Bitcasino is threatening to give back a round number support level for the first time in this entire rally...