Tuesday, February 21, 2017

THE BIG LONG: NOTHING WAS LEARNED IN 2008

We live in a dedicated Idiocracy...

"Fellow fucktards, I have come to save you from the truth and reality, enemies of our corporate utopia. Goldman will run Treasury. Exxon will run State. Vulture capitalists will oversee regulations and the Commerce Department, Devon Energy to run EPA, Rick Perry to shutdown the Energy agency, if he can remember the name. Brawndo to oversee water supply..."





“Over the last 16 years, there have only been two other years when multiples expanded by more than 25 per cent — 2009 (following the financial crisis) and 2003 (following the tech/telecom bubble)” 

This “exceptional” share price performance typically comes after valuations have been “beaten up”











NOTE to Hollywood, I have a new script for you. The fucktards will love it...

"Then they put Goldman Sachs in charge of Treasury again..."





Monday, February 20, 2017

CRASH RISK HIGHEST

Just remember...

"No one saw it coming"




C.R.A.P.: Computers, Resources, American Banks, Phone carriers

American Banks. CHECK.

Total Assets Rydex Banking

Pick a crash any crash, or how about the biggest one so far...




Crash risk is defined as the strength of the largest cap companies (S&P 100) relative to the rest of the market (S&P 500). At the end of each cycle, the big boys go down...



S&P 500 rate of change:

Been there, done that...



Mega cap / Micro cap ratio:

Small banks and penny stocks are now leading the market...





A negative and rising PVO indicates that volume levels are increasing. A positive and falling PVO indicates that volume levels are decreasing. Chartists can use this information to confirm or refute movements on the price chart.




The Exorbitant Privilege Of Knowing Nothing: Cost $Everything

Trump represents the pinnacle of ignorance and arrogance. An all-knowing con man who knows nothing about the rest of the world...




Herein, graphically, lies the heart of the problem, and why I call this the last bubble. Anyone, and I mean everyone on Wall Street and points in between, who believes that stock market P/E ratios have the slightest meaning at this juncture, is an historically colossal buffoon.

This is all 100% pure Ponzi, accept no substitutes.

Corporate profits divided by U.S. Federal debt




% change since the previous S&P top October 2007:







Greed Is Good. But Bailouts Are Much Better

Artificially intelligent billunaires Bill Gates and Mark Cuban are going to be replaced by robots. Since they don't add any value, and we can't afford to bail them out again...

We are now witnessing the end of the hedge fund asset class...



Greedthink:
Is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative viewpoints by actively suppressing dissenting viewpoints, and by isolating themselves from outside influences. Groupthink requires individuals to avoid raising controversial issues or alternative solutions, and there is loss of individual creativity, uniqueness and independent thinking. The dysfunctional group dynamics of the "ingroup" produces an "illusion of invulnerability" 

Crude oil net speculative positions new record high as of Friday:

Comparisons to bullish positioning circa 2014 have been deemed irrelevant by Raoul Pal et al, for bull-shite reasons that made my eyes glaze over. Therefore to be 100% apples-to-apples, hark back to 2015 when Oil was at these exact same levels. Denialism problem solved...



In summary, U.S. oil inventories record high. U.S. Gasoline inventories record high. Hedge funds record long.

Oil implied (upper pane) and realized volatility (lower pane) multi-year lows:



Trump's regulatory advisor is corporate raider Carl Icahn. Am I the only one who thinks that's full retard?

Fortunately he's imploding again...





He currently possesses 29.26 million shares of Hertz - a 35.27% stake.



You see the problem is not just Hertz

Avis/Budget:

Doh!



Hedge funds underperforming

Multi-strategy hedge fund ETF / S&P:









Sweatshop-o-Nomics Is Imploding

For the record, having one's head up their own ass is not a black swan event. We don't need a PhD to see this coming, and having one will all but assure that you won't...




Further to that point, our "best and brightest" are right now figuring out the fastest way to implode the status quo. God bless them, they are truly gifted and talented serial psychopaths. Stage I Global implosion began in 2014 when the Fed tapered Quantitative Easing (see below). Trump's election kicked off Global Implosion Stage II, which will finish the job.

Here we see the Fed balance sheet (red), Oil (black), Global stocks (blue) and most importantly the inverse dollar (green). The end of Fed QE kicked off two years of asset price volatility, which only abated because the Fed took almost all of 2016 off from tightening...




Fed balance sheet with Chinese FX Reserves

When the Fed stopped buying Treasuries, China started selling them. Reverse QE visualized:



Which gets us to Global Implosion Stage II

Trump-o-Nomics:
What's in it for the rest of the world?
Higher interest rates, accelerated Fed tightening, slower growth, weaker currency, capital outflow, lower oil and commodity prices. In other words, the rest of the world pays for the impending Trump tax cut.

If that's the case, then why is there a RISK ON rally in global assets?

That's not for me to say, I only threw my money away at the top one time, before I learned my lesson. All I know is that gambler sentiment is rapidly diverging from "hard data" reality

And we can see that disconnect in the chart above, and in this one below showing the long-term inverse dollar (green) with Oil:




In other words, either the Fed goes through with tightening and reimplodes the Ponzi scheme, or the Ponzi scheme implodes FIRST. The countdown is on...

As always, I personally have 100% faith in the ability of our "best and brightest" to implode the status quo sooner rather than later. But then again, I'm an eternal optimist...

For the record, markets are already calling the Fed's bluff:

Two Year - Fed rate yield spread with USDJPY. Only two rate hikes penciled in for the next two years...








Bears are imploding:
While I'm here, we are told that the recent melt-up in the S&P 500 was compliments of the implosion and subsequent unwinding of a bearish mutual fund "Catalyst" which was shorting naked call options on the S&P 500. 


I don't know if that is true or not, but given the tenuous state of "liquidity", it portends badly for the future...

S&P volume oscillator



Lastly, deja vu of 2008, AIG imploded last week, taking down earnings growth for the entire S&P 500...

Factset Feb. 17, 2017

Bueller?




Sunday, February 19, 2017

Trump Now Has Support To Finish Off Globalization

First he monkey hammered Mexico, now he will finish off China- blaming the sweatshop for making cheap junk for Walmart and otherwise inflating corporate profits 10x...

Picture the day when the PBOC no longer steps in to support the Yuan. That day may have arrived. The U.S. government is hardcore Idiocracy. No half measures will suffice. A free-floating Chinese currency will instantly implode the global financial system...

This just in:



President Donald Trump would have the support of Congress if he declared China a currency manipulator

Senator Lindsey Graham of South Carolina, a Republican, said on a panel at the Munich Security Conference on Sunday that the Republican-led Congress has an opportunity to unite around action against China...

"Good News, The Tax Crash Is Already Priced In"

The second largest market crash in forty years preceded a corporate tax cut. The largest market crash in forty years was preceded by small cap outperformance...

Both risk factors are now in play...

"The S&P then infamously crashed in October of 1987, for a variety of reasons, one of which, Barclays suggests, was the rapid pricing in of the Reagan tax cuts."

the "S&P 500 has returned 10% since Election Day while consensus 2017E adjusted earnings have been lowered by 1%"


Regarding small cap outperformance:


The average effective tax rate among S&P companies that had posted calendar fourth-quarter results as of Friday was 24.11 percent — well below the current corporate rate of 35 percent

small-cap stocks will be the biggest beneficiaries from a reduction in corporate taxes and regulations.

Rapid pricing in of tax cuts visualized:




Prepare For FinalPlosion aka. "RISK OFF"

(Corporate) America has been "first" this entire time. So Donny Trump & Friends are about to find out that the rest of the world are not going to fund his fake-isolationist utopia...

Remember RISK OFF? It's an ancient concept, not seen since the evening Trump was elected. The machines in Asia said limit down, but the humans said "buy", "buy", "buy". Same for Brexit, OilPlosion, and ChinaPlosion...

This chart shows the Japanese Nikkei with its 50 day moving average. In the first lower pane are SPY ETF opening downside gaps > 10 points (Each 1 point equals 10 S&P points)

When the Nikkei implodes below its 50 day, the S&P implodes overnight. Dotted redlines (Brexit, Trump) show overnight limit downs that were bought in Europe prior to U.S. open:

"Global implosion Take 5. Action..."

The Nikkei is currently .4% above its 50 day:


This just in:
Why Being Long The Dollar Is Very Dangerous Right Now

"...A lot of investment assumptions for 2017 have been based on the assumption that we'd see continued strength in the dollar"

"The market is not buying what Janet Yellen is saying. And that is actually a very, very telling sign,"

Major political uncertainty surrounding the new Trump administration is weighing on the dollar...[and] the fixed income market.

This is what the world thinks about Forrest Trump-o-Nomics:

Any questions?

U.S. Dollar Index:





USDJPY






In The Anti-Christ We Trust

Denialistic whores are about to learn that some things should never be sold...

To date, he has monkey hammered global bond markets, repealed Dodd-Frank, reinstated Goldman Sachs at Treasury, installed Exxon at the State Department, initiated a global trade war, imploded the retail sector, endorsed a manic melt-up rally, and incentivized the Fed to increase their pace of Monetary tightening...

This week, Global stocks, Oil (red) and U.S. investor complacency (VIX) aligned the same way they did in 2014 right before the wheels came off the bus. The difference being that this time oil prices and global stocks are far lower and gasoline/oil inventories are far higher...




Furthermore, oil realized volatility reached the same level as well...




Exxon (red) with U.S. oil inventories




Meanwhile, global carry (USDJPY) and the epic reach for junk have rolled over in unison deja vu of 2008:


Of course, there is no actual reflation, just the same end-of-cycle con job as last time...

Wage CPI with Baltic Dry Index (global trade):




Fool me three times, shame on me:
Gamblers sold out to the Anti-Christ trade hook, line, and sinker. The same way they go ALL IN at every top:

Mutual Fund cash balances:



This godless society deserves what's coming.

Going...







Saturday, February 18, 2017

"Give Implosion A Chance"

The common sentiment between myself and Trump's acolytes is our fervent hostility towards Globalization. That's where the similarity begins and ends...

I understand full well that cheap capital, cheap junk at Walmart, mass consumption, SUV road trips, and Dow 20,000 will all go away instantaneously when Globalization collapses.

However, I'm not so sure that Team Trump got that memo. That they will be trading in their exceptionalism for a dunce cap at the end of this circus. Arrogant morons will not be in high demand.

Above all, he himself, Forrest Trump has not the slightest clue what he is doing, nor does he understand the consequences of his blundering actions. He still thinks that Ponzi capital is free and the Dow will remain glued to all time highs while he takes the sledgehammer to Globalization's last few pillars.

Clearly they don't see it coming.

I mean going...

Cheap oil (with volatility):



Cheap capital (USDJPY)


Cheap junk


Cheap wealth