Friday, March 16, 2018

The Self-Destructing Ideology Of RECORD GREED

The maxim of maximizing share price has jumped from the boardroom to national ideology...

Tax cuts are like crack cocaine for Republicans, especially when they are paid for with borrowed money. Amid record risk, gamblers just moved record amounts of cash into the casino in anticipation of ANOTHER tax cut:

Way back in the last week of January of this year, gamblers poured record amounts of money into stocks. That week was the top for the casino, after which stocks fell -10% in a straight line. Fast forward to this week and amid unprecedented White House turmoil, threats of trade wars, falling retail sales, collapsing yield curve, and imploding GDP estimates, once again gamblers added a new record amount of cash to the casino:

Gambler sentiment is back to where it was at the peak in January:

This week, even the "smart" money got pulled back in:

What you ask could entice gamblers to throw record amounts of money back into the casino amid record risk?

What else?

"President Donald Trump and the House’s top tax writer said separately Wednesday that Republicans are working on a second round of tax cuts"

Today, is quad witching options expiration which is usually a trend up day. Be that as it may, the risk/reward at this point is back to where it was at the end of January.

With the exception that it's not the end of January:

We haven't seen this large a divergence between the Dow and Nasdaq since August 2015

Even within the Nasdaq, there are some significant divergences at the all time high:

Reuters: Tech Stocks Rake In Record Inflows

"A record $2.6 billion went into tech stocks this week, cementing the sector’s leading position. Investors have plowed a total of $9.8 billion into tech funds so far this year - making the annualized flow figure a massive $46.5 billion"

This week in a nutshell aka. "Record inflows"

Which sets up tech for an island reversal of fortune:

Regional banks are deja vu of exactly one year ago, although the yield curve is at ten year lows going back to the last recession. 


Dodd-Frank rollback, what else?

"I sleep very well. I just don't see any systemic risk on the horizon," Eisman said Friday on CNBC's "Closing Bell." "My top pick is Citigroup."

China Tech hanging tight

World versus NYSE breadth: