Sunday, January 20, 2019

Make The World Implode Again

In the U.S. the burden of truth is always on reality, and never on the circus clowns assiduously ignoring it...

After all, what good is a circus without clowns?





America's blindspot is the entire rest of the world. Which, in the zero sum game known as "Globalization", is not accretive to corporate profit. Here we see why 2017 was the lowest volatility year on record, and then why 2018 imploded global markets. It was the U.S. dollar rally, which was a function of the tax cut exploding U.S. bond yields.

The tax cut didn't just rob the U.S. Treasury, it also robbed the entire world of liquidity:



Watch any American news station and you won't have a fucking clue what is going in the rest of the world. The entire planet could be imploding and all we hear about is who is going to win the election four years from now. No country is more obsessed with navel gazing than the U.S.A. No developed country has lower quality news and information. It's total infotainment shite. Non-stop clown circle jerk. Which is the country's inherent weakness - it's oblivious to what is going on at the frontiers of the Roman empire.

The reason I don't contemplate the bull case anymore, is because there literally isn't a bullish case anymore, aside from trusting perma-clowns. 2018 proved that fact in spades - featuring the best case everything is awesome scenario that imploded into bear market -20% on December 24th. The famous Santa Trump "BTFD" moment. But you can't tell that to today's bullshit-addled market observers. Somehow, amid record high global policy uncertainty, they prefer to sift the entrails of the algo-driven S&P futures for clues to the future, while global meltdown takes place in broad daylight. Unfortunately, multi-year trend-lines won't mean a fucking thing when the S&P futures explode limit down overnight. 

Speaking of which, since the beginning of January, there have been two flash crashes already - one in the USDJPY carry pair, and another spate of crashes in the Hong Kong markets this past week. Both assiduously ignored.




Instead of paying attention to risk, U.S. gamblers were yet again believing the serial delusion that the trade war is ending. Which was the primary catalyst for this week's rally.

And yet, sadly, Trump just confirmed that not only is it not ending, but it's about to escalate to include 5G telecom equipment companies. And possibly a military confrontation in the South China Sea. 






So while the vertical BTFD rally into Davos got bought with both hands, per annual tradition, it appears that the assiduously ignored risks that blew up last year's rally, have inexorably multiplied in the meantime. 

Which means all this rally is running on now is perma-smiling circus clowns.









Friday, January 18, 2019

White Man's Burden

"Rome seeks its own glory, wars against other peoples to subjugate them, revels in material existence, lives off the work of slave labor, allows many to die of poverty and starvation, and promotes entertaining circuses and gladiator spectacle. The Rabbis, picturing redemption, remark that the messianic age will be recognized when an end is brought to the rule of wickedness."






Which two countries were most responsible for spreading "free trade" economics globally - Britain and the United States. And which two are now trying hardest to blow up the system. Go figure. After 2008 proved that Globalization had failed from an economic perspective, leaving the populace with financial PTSD, both sides of the political spectrum agreed to just accept the de facto slave model as is, and focus instead on social issues. This entire past decade will only be remembered for its fentanyl-assisted suicides, extreme weather disasters, mass shootings, and non-stop political dysfunction. I finally understand Trumptopia. Better too late, than never...

What we face now is the sum total of all of the risks assiduously ignored from the past decade. No amount of warnings can overcome a false profit.

"Welcome to Davos 2019, featuring record global policy uncertainty accumulated from the last nine meetings"

(Index data from: http://www.policyuncertainty.com/)





I have come to realize that Democrats and Trump zealots are not so much disagreeing on the issues, they are disagreeing on what are the issues. In addition, both sides have a totally different "approach". One side, the Democrats, are focused on legalities, moralities, and logic, specifically around the election and Trump's business affairs. The Trump side doesn't care about any of that, they are solely concerned about the changing demographics of the United States. And Trump proves every day to his base that he alone is the only thing standing between them and further demographic "dilution". And for that, they are eternally loyal. Brexit is the exact same thing.  

I get it. I've said myself that Globalization has generated tremendous cultural strife and turmoil, in the name of creating a global monoculture. Regional cultural sovereignty has been abandoned, in favour of a common market. The fact is however, that the ascendant global monoculture is more a product of corporate colonization than it is a "Libtard conspiracy". No one has benefited more from mass immigration than U.S. multinational corporations. No one has benefited more from the opening of borders than U.S. shareholders. De facto Ponzi economics is predicated upon the perpetual growth in global and U.S. population size. Meanwhile, U.S. demographic change is already baked into the cake. The function of prior decades of "pro-growth" economic policy. No wall of any magnitude is going to change that fact. The non-white walkers are already inside the wall.  

All of which explains why the Republican-controlled Senate won't lift a finger to aid and abet the "witch hunt". Which by any sane measure is not a witch hunt at all, it's a measured look at a man who has engaged in rampant fraud and illegality his entire life. But again, he alone is the bulwark against takeover by the brown horde - even against his own party. So the fact that Putin has his hand up Trump's ass, is wholly irrelevant. Because Putin is a nationalist himself. 

Of course, this blog is not primarily concerned with politics. It's primarily concerned with economic "efficacy", sustainability, and widespread prosperity. 

Which is the problem, because neither side of the political spectrum wants to address the underlying economic issues, preferring instead a power struggle over who gets to be the next Captain of the Titanic. Which means that regardless of legal outcomes, neither side has even the remotest chance of "winning" this battle.

They can talk past each other all they want. It's not going to affect the final outcome of Ponzi economics one bit. Quite apart from the Peter Pan fantasy Zerohedge would have us believe about "restoring Reagan's alt-white nirvana" - propagating theft is the only real reason why the Republican party tolerates Trump. Those who go along with it, are what Russian KGB agents call, "useful idiots".

Just like they were in the last cycle. 













The Crime Of The Century

Bilking the elderly out of their life savings. The price will be measured in sequestered carbon, not dollars.

The Banana Republican borrowed stolen tax cut for the ultra-wealthy, will be viewed as the largest theft in human history without any comparison. This Ponzi scheme is now record overbought: When the rally began in December, it was record oversold.

Two decades of data:




The "good news" is that this year is starting off identical to last year with a global vertical ramp. The bad news is that it's not last year.

What this era proves definitively, is that there is no lie these people won't believe. No liar too fraudulent.






I know why. 

Because the usual sociopaths have been lying for a year straight. And now time is up. 




Recall that last January  was the best start to a year since 1987. Now apparently, so is this year:


Deja vu of last year, the S&P is rallying into January's fourth quarter earnings reports, the only difference is that last year featured blowout earnings, whereas this year, so far earnings season has been a bust, with high profile misses by JP Morgan, Morgan Stanley, Citigroup, American Express, Wells Fargo, and now Netflix. This week alone. To say nothing of the myriad earnings warnings leading up to this season. 





Today's fake rally is compliments of yet more *news* about a trade deal between the U.S. and China. We've only seen this movie several times, but the old age home can't remember the ending.

Here we can see via China's largest consumer stock, the various trade deals and fake agreements that have been struck over the past year. Unfortunately for today's denialists, Trump isn't interested in a "deal" - his not so hidden agenda, is to implode China.

And it's working great.






One of the bimbos on CNBC commented that it's odd to see both high-end jewelry (Tiffany's) and mid-range (Signet) jewelry implode at the same time.

Her conclusion: this is clearly a "jewelry"-specific consumer issue.




Clearly it can't be because the con job is ending.



"The University of Michigan said its consumer sentiment index in January skidded to a reading of 90.7 in January from 98.3, which is the worst reading since October 2016...Economists polled by MarketWatch forecast a 97.5 reading"





This chart shows all we need to know about the state of growth/momentum stocks.

The left and right shoulders began and ended with identical breadth thrusts (lower pane). This current breadth thrust is multi-year overbought and yet the index is at a lower level:



The fake Trumpflation trade (cyclicals), ready to final implode




Speaking of non-stop lying, this is the chart of Financial Asset management stocks, which retraced ALL of their Trumptopian gains in 2018.

All while financial used-car-salesmen were telling sheeple to buy this gong show with both hands. 





Here we see that the zombies are stoned again. Although they seem to be coming down off their high:




The crime of the century:

Bilking the elderly out of their life savings














Thursday, January 17, 2019

Trumptopia Is Circling The Toilet

Sadly, and somehow unexpectedly, Circus Maximus is ending, badly. No clowns will be laughing when their beloved reality TV gong show blows up in their face...

This historically unprecedented farce exists solely by and for the amusement of the senile Idiocracy. And anyone else who can be conned into believing anything. 

 MAGA 2020:




The last (G20) rally ended when Trump and Xi agreed to a three month trade war truce. At that same moment, the Huawei CFO was being detained in Vancouver at the behest of the Trump administration. In other words, the "truce" had the shelf life of a weak handshake.

Now this timely bit of market manipulation:





This has been the biggest bull trap since the 1930 counter-trend rally ending in -90% collapse.





Speaking of rallies ending, I've been looking around for a viable wave count and finally found one, in the most obvious place: Recession stocks.

Safe haven (recession) stocks peaked last in this rally (~Dec. 3rd), and then imploded lower. The crash really started however, when the news broke about asbestos in J&J baby powder. The only problem is that it wasn't news, it was just a made up excuse for the crash in the pre-eminent safe haven stock: Denialistic Crash Mode. Now, these "safe havens" have enjoyed a three wave rally off of those December lows amid declining volume, impaired breadth (bottom pane), a moving average death cross, a tag back to the 200 dma, and a .618 fibo retracement.

What else could you want? 




Brexit somehow turned into an even bigger clusterfuck this week. The "good news" was that Theresa May survived a non-confidence vote. 


Which leaves Europe hanging in the balance:



The PBOC injected record stimulus this week, which has been accurately interpreted by markets as a late stage failing act of desperation. 


"a raft of measures last year from big rail projects to tax cuts seem to have had little impact so far, with recent data suggesting activity is cooling more quickly than expected."


Some people in Asia couldn't wait for Davos, to begin the panic. Which portends badly for the U.S. casino ahead of the long weekend. 




"A string of Hong Kong-listed stocks plunged without warning in afternoon trading, the latest shock losses to sideswipe investors in the world’s fourth-largest equity market."

“It’s likely more similar stock crashes could happen this year. A lot of share pledges in Hong Kong are underwater, and as soon as the positions are liquidated it triggers an avalanche.”

Which aligns well with the ending of a three wave rally in Emerging Markets which began in October.

One full year of bullshit later:




One year ago this month global carry trades warned that the RISK ON party was ending.

That warning was ignored. Just like this one:




Global Economic policy uncertainty just reached a record high this week:




Why?

Because global central banks (ex-China) are tightening into deflation for the first time this decade:

The term "policy error" is an asinine understatement:






Here we see Y2K 2.0 imploding in real time via small cap momentum stocks: 




And to top it all off, Goldman Sachs had its biggest short-covering rally since the TARP bailout rally in October 2008. 

Which was right before final implosion.



"Best day since the last crash"
"Awesome, bro"


















Wednesday, January 16, 2019

Davos 2019: Rich Man's Panic

It's important once a year, on the eve of Davos, to be reminded that today's best and brightest are neither. They are Madoff-inspired con artists talking their own book and inventing storylines to fit the prevailing trend. Now they stand at the cusp of reversal of fortune...

Fortunately, the Denialist-in-Chief is staying home this year to implode the government, so he doesn't have to explain away inconvenient reality again.





"Can't we pretend these costs aren't real? We pretend everything else"



"Company blames liabilities, reconstruction costs and ‘increase in wildfire risk resulting from climate change’"

Doh!




Speaking of denial, I noticed that David Stockman just scattered the remains of his credibility onto the curmudgeon bonfire of the sanities. Getting past his free Russian history lesson, the argument appears to be something like: "It's ludicrous to believe Trump is a Putin-controlled agent - Everyone knows he's inherently deceitful, incompetent, and corrupt. What external assistance does he require? Hence, we claim full credit for this self-imploding gong show".

Duly noted.

Getting back to implosion in broad daylight, one of the worst timed predictions of 2018 was hedge fund guru Ray Dalio's prediction at Davos last January - that "Those holding cash are going to feel pretty stupid". One week later, the S&P tanked -10% in a straight line. Global markets never recovered from that point forward, nor did U.S. financials, nor the average U.S. stock.

One year ago (next week):



Timing of Dalio's comment circled:



The second worst comment by a clueless billionaire was Buffett stating back in May that he would love to see Apple go down in price, so he could buy more:

May, 2018:



In the event - despite human history's largest stock buyback, the stock lost ~40% of value from the peak. Then, earlier this month, Apple announced their first revenue decline in 12 years due to tanking iPhone sales.

The stock is now bidless.



While I'm on the topic of floundering Tech stocks, the Nasdaq 100 is now making its fourth lower high since September:



But the worst casino prediction for 2018 came from none other than Goldman Sachs in August. Just weeks before the wheels came off the global bus, they predicted that record stock buybacks would "boost" stocks. And yet, their own chart shows in the article linked below, stock buybacks peaked in 2007 during the last cycle, which is when the casino also peaked. 

August 2018:




Which gets us to the best timed prediction of 2018, right before the wheels came off the bus in October. The prediction that the impending stock buyback blackout period would lead to "volatility":


Which gets us to Davos 2019. According to the above article, which month has the lowest buyback activity?

January