"Rebounding metal may have entered ‘new bull phase"
Dr. Copper, as it's called, signals the health of the global economy
"It's rally time"
Copper (red) with global growth rate:
Thursday, March 3, 2016
"Never Go FULL RETARD". Too Late.
"Rebounding metal may have entered ‘new bull phase"
Dr. Copper, as it's called, signals the health of the global economy
"It's rally time"
Copper (red) with global growth rate:
The Fair Value of Shock Doctrine is Zero
The Central Bank invincibility bubble is bursting...
The "Fair value" of the S&P 500 in 2009 was 100, circled below. About 90% lower than it is today. The fair value is based upon an historical Price / Earnings ratio of 15.
The "Fair value" of the S&P 500 in 2009 was 100, circled below. About 90% lower than it is today. The fair value is based upon an historical Price / Earnings ratio of 15.
The red line shows the value of the market level when the P/E is 15. Currently, fair value is 1360 which is 30% below the current level.
However, as we learned in 2009, ex-stock buybacks, mass outsourcing, corporate debt binging, money printing, and bailouts, true fair value is closer to 100...
A Fake Recovery For A Fake Society
"The corporate-owned cheerleaders were lying right to the very end. Because telling the truth is 'bad for business'"
U.S. stocks are at unprecedented overvaluation based upon profits/GDP, current GAAP PE ratios, and stock buyback chicanery which accounts for all of the profit "growth", now negative. Despite $500b in annual buybacks, per-share profits are at 2010 levels.
Flight to obliteration visualized:
Herein lies the problem - stoned zombies rotated out of 80 P/E Facebook into 45 P/E Special K. Based upon growth rate, the former is far less overvalued than the latter.
Flight to obliteration visualized
P/E ratio of the Consumer Staples sector:
Consumer Staples stocks / S&P ratio
U.S. stocks are at unprecedented overvaluation based upon profits/GDP, current GAAP PE ratios, and stock buyback chicanery which accounts for all of the profit "growth", now negative. Despite $500b in annual buybacks, per-share profits are at 2010 levels.
Flight to obliteration visualized:
Herein lies the problem - stoned zombies rotated out of 80 P/E Facebook into 45 P/E Special K. Based upon growth rate, the former is far less overvalued than the latter.
Flight to obliteration visualized
P/E ratio of the Consumer Staples sector:
Consumer Staples stocks / S&P ratio
Wednesday, March 2, 2016
*Free* To Be Bankrupt
International Energy Agency, Feb. 2016:
"In 2016, we are living in perhaps the first truly free oil market we have seen since the pioneering days of the industry"
OPEC is not a real cartel. A cartel controls an entire market, not a fragmented 40% of a market. Sovereign oil producers running colossal fiscal deficits while liquidating their sovereign wealth funds to pay the bills, are now ALL price takers, across the board. Welcome to free markets bitchez...
The *Free* trade era is ending with a big bang. The NeoCon Supply Side fantasy of a free lunch is ending amidst rampant poverty, out of control deflation, and the first non-normalized *recovery* in U.S. history. Debt is the new "GDP" for generation Madoff. Revisionist historians call all of this "Keynesianism". And if I was born yesterday or desperate to forget about "Voodoo economics", I would be saying the same thing, since all we hear about is how we're bailing out the gaping Titanic with more money printing and borrowing. Cyclical props used to mitigate the mass poverty caused by failed trade policy. Only when the free trade acolytes lose their fake wealth, will everyone be on the same page.
Where was I...The thought that OPEC would bankrupt the U.S. oil industry overnight, was a fantasy...Round 2 of the oil ground and pound will now begin. The oil industry will now demonstrate what happens in a real free market where everyone is a price taker and the price = marginal cost. Meaning the floor for oil will be in the teens or even the sub-10s level. No one can "compete" with global poverty, a lesson that is going to be learned the hard way.
"In 2016, we are living in perhaps the first truly free oil market we have seen since the pioneering days of the industry"
OPEC is not a real cartel. A cartel controls an entire market, not a fragmented 40% of a market. Sovereign oil producers running colossal fiscal deficits while liquidating their sovereign wealth funds to pay the bills, are now ALL price takers, across the board. Welcome to free markets bitchez...
The *Free* trade era is ending with a big bang. The NeoCon Supply Side fantasy of a free lunch is ending amidst rampant poverty, out of control deflation, and the first non-normalized *recovery* in U.S. history. Debt is the new "GDP" for generation Madoff. Revisionist historians call all of this "Keynesianism". And if I was born yesterday or desperate to forget about "Voodoo economics", I would be saying the same thing, since all we hear about is how we're bailing out the gaping Titanic with more money printing and borrowing. Cyclical props used to mitigate the mass poverty caused by failed trade policy. Only when the free trade acolytes lose their fake wealth, will everyone be on the same page.
Where was I...The thought that OPEC would bankrupt the U.S. oil industry overnight, was a fantasy...Round 2 of the oil ground and pound will now begin. The oil industry will now demonstrate what happens in a real free market where everyone is a price taker and the price = marginal cost. Meaning the floor for oil will be in the teens or even the sub-10s level. No one can "compete" with global poverty, a lesson that is going to be learned the hard way.
The Last Rotation Aka. "Point of No Return"
"At the end they took shelter in junk bonds..."
ZH: March 2, 2015
Sheeple Buy Most Junk Bonds Ever
Despite the fact that, on the same day...
MW: March 2, 2015
Stress In Energy Credit Markets Is At Record Levels
Bear market rallies give the false sense of hope that prevents capitulation. Central Banks controlled markets on the way up, now Social Mood is controlling them on the way down, amidst alternating manic and panic. In the meantime, Ponzi unwind continues in broad daylight aka. China reserve liquidation, oil liquidation etc.
In the Third and fastest wave down at all degrees of trend, they will be buying "cash", while all risk assets fall at the same time, having no marginal buyer...
ZH: March 2, 2015
Sheeple Buy Most Junk Bonds Ever
Despite the fact that, on the same day...
MW: March 2, 2015
Stress In Energy Credit Markets Is At Record Levels
Bear market rallies give the false sense of hope that prevents capitulation. Central Banks controlled markets on the way up, now Social Mood is controlling them on the way down, amidst alternating manic and panic. In the meantime, Ponzi unwind continues in broad daylight aka. China reserve liquidation, oil liquidation etc.
In the Third and fastest wave down at all degrees of trend, they will be buying "cash", while all risk assets fall at the same time, having no marginal buyer...
Global Dow long-term
Global Dow short-term
NYSE Composite short-term:
In the first leg down (August) they rotated into Big Cap Tech. When that imploded in January, they bought defensive stocks and apparently junk bonds, neither of which are safe havens. In this next leg down, they will buy what's known as "cash"....
In the first leg down (August) they rotated into Big Cap Tech. When that imploded in January, they bought defensive stocks and apparently junk bonds, neither of which are safe havens. In this next leg down, they will buy what's known as "cash"....
Long-term:
Buried By Oil
"It was a bad time to be 96% correlated to oil"
Oil's end-game consists of pounding global risk assets lower on a monthly basis, until the "floor" is found...this could take a while...
Red line is the ratio of USO ETF / WTI, indicating the front month ground and pound just getting underway...
"That was above the 9.9 million-barrel increase reported by the American Petroleum Institute, and more than four times higher than the rise of 2.5 million barrels expected by analysts"
Oil inventories
S&P 500 with oil: I'm seeing a pattern here...
To see the net effect of the monthly "front month smash" we can look at the USO Oil ETF as a ratio of the 1 Month continuous futures contract. The ETF buys the front-month and then rides it to expiration. Always buying high and selling low...
Oil's end-game consists of pounding global risk assets lower on a monthly basis, until the "floor" is found...this could take a while...
Red line is the ratio of USO ETF / WTI, indicating the front month ground and pound just getting underway...
"That was above the 9.9 million-barrel increase reported by the American Petroleum Institute, and more than four times higher than the rise of 2.5 million barrels expected by analysts"
Oil inventories
S&P 500 with oil: I'm seeing a pattern here...
To see the net effect of the monthly "front month smash" we can look at the USO Oil ETF as a ratio of the 1 Month continuous futures contract. The ETF buys the front-month and then rides it to expiration. Always buying high and selling low...
"Where's The Dumb Money When You Need It?"
Sentiment surveys need a new category called "Recently imploded dumb money", because most people have already been monetized by serial psychopaths...
"The bears are trapped, get some more dumb money"
52 week range of average S&P Stock
Indeed
Unfortunately, sentiment surveys don't capture the fact that most bulls have already been obliterated, and are not reading clueless bullshit anymore, but brokerage stocks tell the tale...
"Recently imploded dumb money" visualized:
Mind the GAAP 'n Crap
ZH: Mar. 2, 2016
S&P GAAP Profits Lowest Since 2010
Tuesday, March 1, 2016
The Oil Futures Market Is Wagging The Planet
In summary, the spot oil market is saturated, creating a massive spread between one month futures and spot. As the current future rolls towards expiration, oil price collapses towards spot. This creates a massive "contango" spread that generates a temporary tradeable bottom which lasts until around the end of the month...all other global risk assets are along for the ride. Each month the spread between the two closest contracts widens. Shorts are forced to cover since the new front-month contract is already 10% higher than the expiring one. Oil is magically "up" on the day, week etc., along with everything else...
This entire global charade now hangs upon how much of the daily 2 million barrel oil glut can be profitably stashed offshore, until the glut overflows the spot market again, and the cycle repeats.
Stocks and oil roll over at the beginning of each month, let's figure out why...
S&P 500:
Oil
We all know that oil and stocks are at their highest correlation since 1980. And we also know that the recent low in oil coincided with a multi-year widening in the Contango spread.
So instead of comparing December-March spread, I compared March-April spread which should be minimal. These two contracts traded within $1 of each other up until the roll over to the March contract which took place in January. At the lows the spread was almost $3 i.e. the front-month expiring contract collapsed down which temporarily "facilitated" the storage arbitrage trade and short-covering...
This entire global charade now hangs upon how much of the daily 2 million barrel oil glut can be profitably stashed offshore, until the glut overflows the spot market again, and the cycle repeats.
Stocks and oil roll over at the beginning of each month, let's figure out why...
S&P 500:
Oil
We all know that oil and stocks are at their highest correlation since 1980. And we also know that the recent low in oil coincided with a multi-year widening in the Contango spread.
So instead of comparing December-March spread, I compared March-April spread which should be minimal. These two contracts traded within $1 of each other up until the roll over to the March contract which took place in January. At the lows the spread was almost $3 i.e. the front-month expiring contract collapsed down which temporarily "facilitated" the storage arbitrage trade and short-covering...
This Isn't A Bear Market. It's A Burial Service.
Super Tuesday just steamrolled weak bears. Stocks moonlaunched into outer space on fake optimism, as "clarity" about the next captain of the Titanic emerges...will it be the Democrats' runner-up from 2008, or Camacho for President? Needless to say the establishment is shitting their pants right now. Every time Larry Summers or some NeoCon jackass (Kristol & Co.) come out against Trump, his ratings go up. Because THEY are the reason this is happening...
Today was one of the S&P's biggest point gains ever
Here are the S&P days with point gains > 40, during past 5 months...
NYSE Momentum with biggest up days marked with down arrows...
Burial service visualized:
Price / volume:
Look at this, and then look up again. Stop me any time...
NYSE Composite
Wilshire
Nasdaq 100:
Today was one of the S&P's biggest point gains ever
Here are the S&P days with point gains > 40, during past 5 months...
NYSE Momentum with biggest up days marked with down arrows...
Burial service visualized:
Price / volume:
Look at this, and then look up again. Stop me any time...
NYSE Composite
Wilshire
Nasdaq 100:
Globalization Is Not "Cyclical"
The S&P back in 2014...forty global bear markets, IPO market effectively closed, Energy sector obliterated, Biotech and momentum monkey hammered, defensive stocks going parabolic, corporate profits falling faster than stocks first time ever, Treasury yields nearing all time lows, negative interest rates in Europe and Japan.
All is well in CasinoConomy:
"If we enter this with the intention of selling, I think we all can make a solid near-term return"
MW: March 1, 2016
Super Tuesday Means RISK ON For Trump and Clinton
31% of investors are bearish, going into global synchronized collapse...
http://www.aaii.com/sentimentsurvey
All is well in CasinoConomy:
"If we enter this with the intention of selling, I think we all can make a solid near-term return"
MW: March 1, 2016
Super Tuesday Means RISK ON For Trump and Clinton
31% of investors are bearish, going into global synchronized collapse...
http://www.aaii.com/sentimentsurvey
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