After all, what good is a circus without clowns?
Davos to Davos, what changed in the past year?
The tax cut was squandered on stock buybacks and insider cash outs, leaving the general public holding the bag.
“Poor people suffer twice from being deprived of basic services and also paying a higher burden of taxation,” Byanyima said in an interview.
Billionaire fortunes increased by 12 percent last year, or $2.5 billion a day, while the 3.8 billion poorest people saw their wealth drop $500 million every day, Byanyima added.
"KA-CHING!!!"
America's blindspot is the entire rest of the world. Which, in the zero sum game known as "Globalization", is not conducive to sound investing. 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. The tax cut came into effect at the end of January 2018, which is when the global rally ended:
Watch any American news station and you won't have the slightest 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.
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 global risk, U.S. gamblers were yet again believing the serial delusion that the U.S. is winning the trade war. 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.
Last August, well-known hedge fund manager Kyle Bass asserted that Trump can "win" the trade war by forcing devaluation of the Yuan. Never mind the fact that Bass doubled down on his Yuan short in 2018 and never mind that it was Yuan devaluation in 2015 that caused global smash crash.
August, 2018:
"Bass also downplayed the currency fears, saying that the U.S. consumer isn't likely to see any major effect from the growing dispute."
Bass apparently doesn't have any problem with the fact that the trade war has completely backfired by weakening the currency:
January 13th, 2019:
Meanwhile, these over-crowded Chinese Tech companies annihilated U.S. hedge funds and other U.S. investors in 2018 due to Yuan devaluation.
Meanwhile in Europe, talk of a "hard Brexit" escalated this week after the Theresa May gong show earlier in the week.
Deja vu of the Brexit vote itself, much ado about short-covering into the bad news:
All of which means that 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.
Deja vu of the Brexit vote itself, much ado about short-covering into the bad news:
All of which means that 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. Oblivious to the rest of the world.
