Despite the highest global crash risk in world history, we learn that professional investors are the most bullish in three years. After all, it's not their money...
"Everyone" got fooled this time. Why? Because of course debt is now "GDP". America's mega deficits have sucked in global capital from far and wide under the fantasy auspice of superior "growth". The only thing growing is the debt...
"Everyone" got fooled this time. Why? Because of course debt is now "GDP". America's mega deficits have sucked in global capital from far and wide under the fantasy auspice of superior "growth". The only thing growing is the debt...
"Professional investors have suddenly turned optimistic about U.S. stocks again, with bullish sentiment fed by an especially buoyant earnings season that is offsetting other concerns."
"Other" being short-hand for rest of the world:
Deja vu of Friday, shorts are covering on the fake news that the world's problems were all just solved.
In other words, more short-covering ahead of retail earnings:
Unfortunately, China Tech is in final obliteration mode, deja vu of the last time pros were too bullish aka. 2015:
And 2011
We've never seen anything this asinine before. Although I seem to be saying that a lot lately...
"When the economy is operating near capacity, government borrowing to finance an increase in the deficit causes interest rates to rise"
The forty year Republican conflation of debt as "GDP" has gone into hyper-overdrive driving U.S. interest rates well above the rest of the world. This has been ubiquitously misconstrued as an indication of superior economic growth, when in reality it merely represents superior corruption. In the event, all of the world's capital has now been sucked into the U.S. vortex. Because "there is no alternative".
Unfortunately, the capital is not being used for investment in superior growth, it's being stashed in the Cayman Islands via insider selling into stock buybacks.
Were it not for a deficit running at 4% of GDP - the largest non-recessionary deficit since WWII (aka. in U.S. history) - the U.S. would already be in recession.
But don't take my word for it:
"Michael Hartnett, BofAML’s chief investment strategist, said the rise in sentiment is a cautionary sign as central banks continue to gradually tighten policy and expectations are that the profit boom will tail off due to tougher comparisons ahead."
our view remains: peak profits, policy and returns.”
Most of Wall Street got conned this time:
Some people got the memo:
Yesterday, was the highest reading in option skew.
EVER.
CBOE Skew:
"The crash of October 1987 sensitized investors to the potential for stock market crashes and forever changed their view of S&P 500® returns. Investors now realize that S&P 500 tail risk - the risk of outlier returns two or more standard deviations below the mean - is significantly greater than under a lognormal distribution. The Cboe SKEW Index ("SKEW") is an index derived from the price of S&P 500 tail risk."
SKEW typically ranges from 100 to 150."
159
The crash of 1987 taught them nothing about fiscal responsibility. Nor did the crash of 2008.
What they need is a better education.
Yesterday, was the highest reading in option skew.
EVER.
CBOE Skew:
"The crash of October 1987 sensitized investors to the potential for stock market crashes and forever changed their view of S&P 500® returns. Investors now realize that S&P 500 tail risk - the risk of outlier returns two or more standard deviations below the mean - is significantly greater than under a lognormal distribution. The Cboe SKEW Index ("SKEW") is an index derived from the price of S&P 500 tail risk."
SKEW typically ranges from 100 to 150."
159
The crash of 1987 taught them nothing about fiscal responsibility. Nor did the crash of 2008.
What they need is a better education.
