Saturday, May 5, 2018

Canyons In The Facade

The headlines read like some sort of dystopian horror novel now. There's only one way to explain this gong show - in the context of an aging Idiocracy terrified of change while cannibalizing the status quo with ferocious intensity. After all, mass consumption is their status quo...

Let's start with the shock and awe:

Commercial net longs have now dropped to record lows, to make room for stampeding dumb money:

Commercials largest short since "ever" time:

While we're near the topic of consumer staples:

Back on the topic of gleeful self-cannibalization, remember earlier this week when I said that the Fed's own data on consumer delinquencies is lagged by half a year? And that given the relentless rise in interest rates we can likely extrapolate an increase in delinquencies?

Well, just now, we got this data point:

"Some Wall Street strategists are focusing on a more alarming data point showing a collapse in a category called “dollar collections.” The index covering that part of the survey - which measures the ability of creditors to collect the money they are owed from their customers - tumbled to 46.7 in April from 59.6 in March, putting it at its lowest level since early 2009, the height of the financial crisis." 

"The equity strategists at Bloomberg Intelligence say they are noticing that stock performance is starting to correlate strongly with corporate balance sheet health"

This week, the Fed reiterated their commitment to implode this charade. They will continue to tighten until "something" breaks. With risk asset correlations the highest since 1987, "something" just happens to be "everything". 

Here we see Corning Glass with the Fed balance sheet:

And on the topic of asinine complacency, Zerohedge pointed out the VIX flash crash on Friday was deja vu of the March jobs report:

Bonus charts:


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