What we are witnessing in real-time is a Brown Swan Event - a dire situation in which gamblers have their heads lodged in their own asses while markets are collapsing in real-time. The key lesson the de facto Idiocracy didn't learn in 2008: you can't trust Wall Street...
BTFD: "Buy the Fucking Depression"
"The bullshit market will never end"
Nassim Taleb's well-known tome Fooled by Randomness describes a newbie trader who begins his career early in the expansion cycle. His first few trades work out great, so he successively applies more leverage late into the cycle until he blows himself up. All along he thinks he's a genius. That is what is happening right now en masse. The reason why crash is setting up in broad daylight is because gamblers have been well-conditioned to believe it can't happen. It's a figment of the imagination.
BTFD: "Buy the Fucking Depression"
"The bullshit market will never end"
Nassim Taleb's well-known tome Fooled by Randomness describes a newbie trader who begins his career early in the expansion cycle. His first few trades work out great, so he successively applies more leverage late into the cycle until he blows himself up. All along he thinks he's a genius. That is what is happening right now en masse. The reason why crash is setting up in broad daylight is because gamblers have been well-conditioned to believe it can't happen. It's a figment of the imagination.
At the top, breaking news that small caps have entered a bear market, sitting above a headline stating that Wall Street sees the "bull" market" continuing another year. You can't make this shit up...
Within the article itself we see that not even ONE Wall Street forecaster sees the market down in 2019. Scrolling down to the bottom of the article, not one forecaster foresaw the market down in 2018.
Yet, as I write, the S&P is heading in the wrong direction for both year's forecasts. You would think that having been wrong in 2018, that would "advise" a change in methodology for 2019. However, this profession has zero accountability other than to sell stock to unsuspecting sheeple.
Today the S&P 500 tagged the last line of support - the February intra-day low:
Today the S&P 500 tagged the last line of support - the February intra-day low:
The Russell 2000 small cap index is in bear market free-fall mode
Herein lies the problem: For a decade straight, Central banks have conditioned these bozos into believing there is no such thing as risk. "BTFD" has been amply rewarded by Central Bank money printing bailouts.
The "good news" is that the Powell Fed WILL eventually blink, but only AFTER markets crash. Which is something of a mixed blessing. Gamblers have to get wiped out in order for the casino to be "saved".
As we see there has been no capitulation selling throughout this decline:
We also see below that speculators are still actively shorting the Treasury bond market. Not only are they betting the Fed will continue raising rates, but they are betting that the flattening yield curve is wrong. Moreover, they are betting that the Fed won't crash risk markets and otherwise collapse the yield curve. It's a massively over-crowded trade without a real-world exit strategy.
Suffice to say, shorting the only remaining safe haven has been painful and is about to become Black Swan career debilitating.
ZH: Here Is The Problem: No One Is Short
As we see via option skew, shorts/put buyers were very aggressive in late September betting on a crash, but as the market fell they monetized their hedges. They didn't roll them over.
Now, going into the last two weeks of the year, "no one" is hedged.
Who will now step in front of a herd of stampeding sheeple selling at 2x record rate in the next two weeks and imperil their bonus?
No one.
