A Deep State Of Denial

The amount of denial right now is staggering. These zombies can take a lot of pain. Go figure...

Sadly, today's Financial Services con men can't reinvent their delusional narratives fast enough to save trapped gamblers. So instead they just advise them to ride out the systemic meltdown. Meanwhile, the Santa Mnuchin "Plunge Protection Team" did anything but placate markets. Why? Because there is no such thing as a plunge protection team. Better off believing in Santa Claus...

The downside "records" keep piling up,  but Wall Street can't get ahead of this selloff because that would mean admitting they've been wrong all along. So instead they continually reference ever-less-relevant past data to justify why stock prices should be higher: On Wall Street "It's always too late to sell".

According to Zerohedge, Wall Street hasn't been this wrong since 2008. Actually it's far worse than that. Because back in 2008 Wall Street was shorting risk in size, hence why it was known as "The Big Short".

Here we see futures positioning (lower pane) in 2008 versus now. Back then they timed the top perfectly and then monetized their shorts into the bottom. This time around, they've been holding a brutally wrong long position now down over -20% unleveraged:

"The Big Long"

Compliments of the mass delusion generated by Wall Street, there is no sign of fear, despite now being in a confirmed bear market.

These zombies are in a serious coma:

"Patience will be rewarded"

Oil is getting obliterated:

Stock market "safe havens" - another well-marketed delusion - are getting monkey hammered back to 2008:

The volatility short trade is officially over

The rotation out of stocks back to bonds is on, which means that the last delusional reflation trade is now getting margined out. The Fed has lost all credibility with the bond market. 

Speaking of gleeful denial, recall that 2018 started out as the best January since 1987:

January 24th, 2018:

"The S&P 500 has already rallied 6.2 percent in January, posting only three down days and clinching its strongest showing since 1987"

Fast forward, and this has been the most volatile month since:

October 1987

December 24th, 2018:

"I wonder if that means anything?"
"It bodes well for a Santa rally"