Tuesday, April 24, 2018

The Icarus Rally Is Melting

Headfake reflation was a one way trip to the sun. The biggest con job in human history, sold to a generation of zombies, by a generation of con men...

All throughout this fiasco, as the shift towards re-nationalism gained strength - specifically during Brexit and the Trump election - apologists for globalization were quick to defend the imploding status quo. Even as global debt and global poverty rose in lockstep, there were vociferous defenders of labour exploitation and environmental desecration. The perpetual growth model was sacrosanct. What it comes down to was that the status quo was good for them. Fuck everyone else. And propagating the inherently self-destructive economic model was the only way to preserve their position of influence and power. In the process, no lie was too big to tell. Now, even the most stubbornly delusional among us will be force fed the immensity of their fraud.

This morning, the 10 year just broke through the magical 3% level that Gundlach said would usher in a wave of further (bond) selling. That is still TBD, however, stocks tanked instantly: 

"Something strange is happening in the stock market as big stocks are reversing sharply lower after opening higher Tuesday.

Thirty stocks in the S&P 500 dropped more than 5 percent from their opening prices with many of the names concentrated in the industrial and technology sectors."

"Net profit margins are tracking at 11.1 percent, which would be the highest level since the third quarter of 2008."

It appears that gamblers are unaware that the energy sector is puny relative to the growth sector, and growth stocks don't do well under high interest rates. Nor do mortgages, credit card loans, junk bonds, and...

Dividend stocks. The worst implosion since the third quarter of 2008.


The stocks that keep the casino aloft, are getting pounded with each tick higher in interest rates.

"supply chain checks out of Asia indicate that June iPhone shipments are trending well below expectations" 

Save some selling for after hours

Here is where it gets interesting. Oil volatility is already rising along with oil. We've never seen that before. Which portends badly for when record futures gamblers head for the exits at the same time...

Right on time: