"I'll Take Smoking Crack For Everything, Alex"

The 1929 Smoot-Hawley tariff war rally is ending. It was a major victory for Twitter, and a colossal failure for the trade deficit. The only way the trade deficit will shrink is if the rest of the world is growing faster than the U.S. When the U.S. is growing faster than the rest of the world, imports grow faster than exports, which means that most of the tax cut "stimulus" is going overseas. This has been the biggest circle jerk in human history. 

10-Year Note Speculators sharply raised bearish bets to new record high
S&P500 Mini Speculators sharply advanced their bullish bets to highest in 19 weeks
VIX Speculators sharply raised their bearish bets to 46 week high

MW: Highest Consumer Confidence Since September 2000

"That’s the highest level since September 2000 — near the end of the Internet boom. It’s also close to the record peak of 144.7 set in May of the same year."

"High" is the only way to describe confidence right now

Pot stocks are the new leading "economic" indicators

Gamblers enter the fourth quarter with NAFTA in question, the mid-term elections in question, Trump's presidency in question, the global economy in question, China trade wars in question, Italy in question, forward earnings in question. The only things not in question are accelerating rate hikes, accelerated balance sheet rolloff, and record bets that this gong show lasts forever, which happens to be 90 days from now. 

In summary it's a denialist paradise:

The third quarter began with a selloff due to $50b in tariffs on China. And it peaked concurrent with $200b of additional tariffs. The quarter was book-ended by trade war escalations.

What's not to like?

The past year can be summarized as follows: A six month tax cut rally ending in volatility explosion. Followed by a six month trade war rally. You can't make this shit up.  

In the meantime, breadth has eroded and leverage has increased. Note where VIX futures positioning was in February - it was neutral. The hammer is cocked with far more powder this time:

Did I say six month trade war rally? Here below is the 1929 analog. Notice above that while the nominal S&P 500 made a new high, breadth (red line) did not confirm. It followed a path more like this one:

Fortunately, this time around Trump is "winning" the trade war.

On Twitter

"Trade wars are good, and easy to win"

The rest of the world is deja vu of early 2016 global implosion:

Germany:

China Tech rolled over post-Fed

Pot stocks are done, so this is the new "safe haven"

New record Wall Street bets that Ponzi reflation continues "forever" aka. December 31st.

Powered solely by the Twitter Mind Trick for weak-minded fools...

The stakes are as high as confidence

Financials left the fake reflationary party this week

Bueller?