Thursday, June 28, 2018


In 2008 there was one Bernie Madoff, in the post-truth Idiocracy there are millions of them. Compliments of American mythology, forty years of Supply-Side economic failure keeps getting recycled as "success", amid ever-more duplicitous behaviour...

This explains everything:

How To Monetize Idiots In A Post-Truth Idiocracy. For Fun and Profit:
"There are times when an investor advisor has no choice but to behave as though he believes in things that don't necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully. The good news is that mankind clearly has the ability to suspend rational judgment long and often"

What Trump represents is America's final descent, into unfettered corruption. The last false prophet promising MAGA, he is the embodiment of the Republican legacy: a continuous stream of non-stop lying and rapacious criminality. The inevitable result of Ayn Randian nihilism taken to its logical self-destruction: a society lost in a sea of ad-sponsored mass delusion. Feasted upon mercilessly by industry-owned sharks. 

This will be the downfall of the Republican Party and the new Herbert Hoover, right here...

1997 x Y2K x 2008 x 2016:
More capital is now at risk than ever before amid higher global risks than ever before. Average investors are totally clueless. They've been systematically led to believe that global selloffs, global trade wars, Fed double tightening, Y2K blow-off speculation, IPO pump and dumps, Emerging Market meltdowns, and oil wars, all occurring at the same time, are "buying opportunities". No need to ask where they got that idea from:

"The Obama-era rule effectively breathed its last on June 13, when a deadline for the DOL to appeal the Fifth Circuit Court’s decision to the Supreme Court came and went. The Trump administration has not been friendly toward the rule, which had required that all professionals offering advice on retirement accounts place clients’ interests ahead of their own."

"Knut Rostad, president of the Institute for the Fiduciary Standard, a non-profit research, education and advocacy organization, called the court's decision "tragic."

"...investors should demand to know whether their advisor is acting as a fiduciary...The vast majority of financial professionals will not be able to do that."

Using the 2015 analog, which is a very mild comparison, cash balances are far lower now than back then, despite 10x risks now:

The con man is good, very good:

"As president, Trump has promoted those businesses with his presence relentlessly. During his first 514 days in office, he visited Trump properties on 159 of them.

As demand rose, the Trump organization raised prices.

Mar-a-Lago, which Trump calls the “Winter White House,” doubled its membership fee to $200,000. Trump International Hotel, whose managers market it as a destination for diplomats, raised room rates almost 60 percent."

“The stars have all aligned”


When I started this blog, I asserted that Globalization would self-implode. "No one" believed me. Now it's actually happening in real-time. Still no one believes me. Which proves the historical axiom that you can fool all of the people whenever you want, like an ATM machine. The world is caught between denial and a hard place. Republicans are caught between a tax cut and a trade war. And there is no way out. But who could warn them, they don't trust anyone who can be trusted. Just remember the phrase "No one saw it coming", because you're going to be hearing it a lot soon...

Revisionist historians assert that the 1930s Smoot-Hawley tariffs caused the Great Depression. They didn't. However, today's tariffs WILL be the catalyst for the impending depression. The difference being that the Smoot-Hawley tariffs of 1930 came AFTER the market crashed in 1929, whereas today's tariffs are coming prior to a crash. As we see via today's markets (currency, credit, stocks), Trump's "fun and easy" trade war is adding substantial instability to the late cycle global economy, having already turned the "global synchronized recovery" into a global synchronized slowdown...

And yet, as batshit crazy as Trump is, he still manages to be smarter than the rest of the Republican party, which is quite something to realize. Trump knows that *Free* trade is a farce and the only country that actually ever had free trade was the U.S. Which means that there never really was such a thing as free trade, since it was all one-sided. Prior to 1980, the U.S. never believed in Free Trade either, which is how the U.S. amassed its gold reserves - via trade surpluses. So now Trump is threatening punitive tariffs if other countries don't drop all of their tariffs. It won't work.

Why won't it work? Because other countries never believed in free trade in the first place. That's solely an American fantasy that was intended to increase corporate profit at the expense of literally everything else - the economy, the environment, the workforce, and the country itself. Other countries saw the price that was paid for *free* trade, and said no way, we're not a bunch of fucking idiots.

So no, contrary to Trumptopian delusion, adding more tariffs now won't have the intended effect of removing all global tariffs. 

Why I have to explain that fact is a testament to how dumb the Republican party has become over time. 

100% FantasyLand.

Speaking of which...

Oil led all week despite OPEC's pledge last Friday to increase production. Completing the three wave retracement off of the 2014 decline:

Crude oil (black) with World Stocks (ex-U.S.):

"No one saw it coming"

This week is the end of the second quarter and first half of the year. The S&P 500 has been stair-stepping lower, each leg of larger magnitude. It's a waterfall crash in real time. Each decline coming overnight, followed by a BTFD rally during the day. 

As we see via the chart above, the rest of the world is telegraphing risk, and U.S. gamblers are buying it with both hands...

Now here we have an IQ test:

S&P 500, :5 minute view (recent top, June 13th):

Zooming out to the daily view, bears got rinsed back through the 50 day to complete the quarter/half. The horizontal blue line marks the break-even S&P level for 2018. Skynet is trying to close the first half of the year in positive territory. Much better marketing that way.

 Of course, as it was the last two times (circled), breaking this level is a clear shot to the 200 day which is now within convenient overnight gap down distance...

"The $30 billion that came out of global stock funds in total in the past week was the second highest ever and largest since the financial crisis"


The other reason the casino hasn't imploded just yet, is because this is Wall Street's biggest June pump and dump since Y2K:

Adding to weekend fun, Canada's retaliatory tariffs go into effect, when else, Canada Day, July 1st. Trudeau can't back down politically, so we'll see if the assclown-in-chief takes the bait again.

Trump's counter-retaliation against Europe last Friday pounded the S&P -60 points on Monday this week. One more semi-literate tweet and this gong show explodes in his face...

Adding to the excitement, in response to the Indian Central Bank's request to slow quantitative tightening, the Fed will (automatically) accelerate balance sheet rolloff by an additional $10 billion/month, beginning in July.

To kick things off in style, an entire month's worth of liquidity removal ($30 billion) will take place this weekend, hitting the tape Sunday evening. 

This strategy will continue until something implodes, more than likely everything at the same time, since there's not one part of the casino that hasn't rolled over. It's a tried and true formula, why stop now? 

"Another week of this Johnson"

One way or the other, there will be fireworks in DonnyLand next week: