Friday, July 6, 2018

Zero Sum End Game

When the second largest economy aka. "sweatshop to the world" collapses, taking down global markets with it, that's how we'll know we "won" the trade war. There will be rioting in the streets of course, but that's beside the point...

A Pyrrhic victory (PIRR-ik) is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. Someone who wins a Pyrrhic victory has also taken a heavy toll that negates any true sense of achievement.

"$3.4 trillion worth of the SPDR S&P 500 ETF was traded in the six months through June, the most tumultuous first half since 2008"

Perfect timing

All Ponzi schemes are a zero sum game. This one is no exception. There are no "winners" in a late cycle trade war, and those who believe in zero sum outcomes are about to be on the receiving end of one. It's called late cycle Ponzi collapse with no more idiots to take the other side of the trade. This can all be explained by the arms race for who has the most artificial intelligence. Of course, we know who is winning that war hands down. Trump epitomizes the empty soulless sociopath, who exploits other people endlessly without second thought. Blaming other countries for the problems wrought by America's ethos of unbounded greed.  

The Clown Prince, via the New York Daily News this week:


"It can't happen to me"
Not once throughout this Globalized fiasco have the masses at large questioned where all of their cheap merchandise comes from - who does the heavy lifting doing all of the things "we" used to do, but for ten cents on the dollar. This week was the fulcrum moment as the zero sum exploitation mentality that has pervaded Globalization from the beginning came back home to roost. Trump is adamant he can "win" a global trade war by attacking his own supply chain. He can't. For the past decades, the *Free* Trade Faustian Bargain put the jobs in Asia and the corporate profits in the S&P 500. Reversing that equation is now generating a global markets crash. The biggest dislocations so far are in the world's second largest economy, where GDP growth, the currency, and stocks have been getting pounded. The Shanghai Composite is now in a bear market and barely above the 2016 low.

Per Trump's troglodyte mentality, if we just pound China long enough, we "win":

The Chinese currency is taking record punishment - far beyond the 2015 dislocation:

The Hong Kong market is next in the line of fire:

Taking down the largest global IPO in four years will be challenging on Monday, since it's already trading ~10% in the grey market. Thus signaling that the global IPO mega bubble is now bursting:

"Xiaomi Corp's debut is off to a bad start even before its shares officially start trading in Hong Kong on Monday. Some institutional investors saw bids as low as HK$15.40 (S$2.68) yesterday with no offers in grey-market trading...That is 9.4 per cent below the issue price...Xiaomi priced its initial public offering (IPO) at the bottom end of a range, cutting its valuation to roughly half of the smartphone maker's initial goal"

Which portends badly for global risk appetite, as it did in 2015:

Japan doesn't like trade wars either...


On the U.S. side, the Dow is bearing the brunt of punishment from Donny's most excellent trade war

Closing the first half in the negative:

As I said above, this trade war can all be explained by artificial intelligence. But as always, don't take my word for it:

"America’s anxiety about Chinese technological prowess is reflected in Washington where politicians are rethinking their attitudes to foreign investment"

AI being just another Tech fetish, now bursting. The automation of everything funded with cheap poverty capital, having a spreadsheet ROI of infinity and a real world ROI of insolvency.

There was one major new high this week however:

Zuckerborg just became the world's third richest boy-man, because it turns out that facilitating rigged elections is extremely profitable. Yes, it's the Zuckerburg Omen. Position accordingly.

Speaking of which, how prescient was this?

"Trump added that he has heard "more and more" that the November election will be rigged -- suggesting to his supporters that the outcome of the election is out of the hands of voters."

Jimmy Kunstler, you better call the FBI, son. According to your own boss the election WAS rigged. Wait, nevermind, the right team won, so it doesn't matter anymore. It would be a better use of time to figure out who in the "Deep State" spread these unfounded rumors about rigged elections. 

What a fucking clown show.  

When their epic mega bubble of mass delusion final implodes, they won't know who to trust. Because 95% of them are imbibing corporate-friendly pablum. In a post-truth society, there is zero market for reality.

The small business optimism index is at the highest level in 34 years:

NFIB, May 2018:
"Main Street optimism is on a stratospheric trajectory thanks to recent tax cuts and regulatory changes."