Final Burial Arrangements

Senile geezers can't admit their entire lives have been an inter-generational embezzlement, so instead they propagate ever-larger swindles; meanwhile, alt-white supremacists redirect dumbfucktopia to the threat posed by women attempting to stop rampant criminality. Sadly for the denialists, the cost of this delusion will be measured in (their) carbon units. The final arrangements now underway. Fortunately, old geezers never see it coming...

The bottom line is that the casino class has been bailed out too many times, so now they assume that all bad news is good news. 

Even imploding profit forecasts. Now set to decline in the first quarter (ending March).

What to do? BTFD:

"Companies will need to stop reversing earnings forecasts lower before markets can set new highs, unless investors go on a 1999-style buying frenzy."

What we need to assume is even more dunces in the casino:

"Given the market’s bullish reaction to the Fed’s about-face last week, it is apparent that investors “realize the importance of the ‘Powell put’”

In other words, the Fed's recent policy reversal has caused gamblers to ignore all risks when ironically the Fed reversed because risks have massively increased:

"An escalating trade war, a hard landing in China, and Brexit could prompt a global recession"


Sadly, for the Y2K melt-up delusion, the leading sectors are all end-of-cycle deflation plays, specifically Utilities, and Real Estate Investment Trusts.

Here we see REITs as a ratio of the S&P 500:

Speaking of all those "priced in" risks, they are all coming to a head at the same time:

"Trump responded “No” and shook his head Thursday when reporters at the White House asked him if he would meet with Xi this month. Then he added, “Unlikely.”

Of course, this is only about the thirtieth time that the casino has been gamed by this on again off again trade war scam, but who's counting. What we now know is that there will likely never be a trade deal. Why? Again, due to massive arrogance combined with massive exploitation. What the MAGA team wants is for China to continue to be America's sweatshop but to promise not to "steal" U.S. technology. It's the patented, I want my sweatshop and S&P profits too, strategy. 

Sadly for that arrogant delusion, China expects more out of this Faustian Bargain than to convey cheap junk to Walmart zombies, in perpetuity. The Chinese populace has paid an unholy price in service to to S&P 500 profit. Their end-game goal is industrial dominance. Which puts two bald men fighting for global economic hegemony, with the U.S. stock market at the intersection of no way out.

But don't take my word for it, because lifelong free-trader turned trade warrior Larry Kudlow essentially confirmed the same today:

"Kudlow said U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin’s next trip to Beijing still may not result in some of the agreement even being drafted."



China's markets re-open on Monday. We'll see how they take all of this great news.

The other "bullish" news was from Europe, where UK growth has been slashed to decade lows. But like the ECB, and the Fed, they plan to keep tightening:

"...in the U.K., the Bank of England cut its growth and inflation forecasts. The central bank projected the weakest economic outlook for the U.K. economy since 2009. This is on the back of Brexit uncertainty as well as a slowdown in the global economy. Nonetheless, the bank stated that a gradual and limited rate hiking path lies ahead."

What about the "safe havens?"

Trump took care of those on Tuesday:

CNBC: Drug Stocks Are The Big Losers From Trump's State Of The Union Speech

"If the government passes legislation that makes drug companies lower their prices, shares of Merck and Pfizer, as well as related companies like CVS Health and UnitedHealth, could be under pressure, strategists warned."

Again, competing priorities for how best to restore greatness...

"What we need is bulk Viagra"

Make Arrogance Great Again

What happens when every risk asset class in the world final implodes at the exact same time? We're about to find out, compliments of unprecedented arrogant delusion. Trump's loyal base - having learned less than nothing from their last forfeiture to de-regulated larceny - decided to double down on corruption. In order to regain their greatness at getting conned by proven con men...

Trump Is The Madoff Of Politics
"Trump and Madoff are lying, thieving, soulless luxo-thugs for whom chasing the almighty dollar and lying practically every minute of every day was their reason for being...Madoff learned he could rake in the bucks by lying his head off to investors.  Trump was learning he could gain political currency by lying about everything from Obama’s birthplace to the evils of immigration."

Trump is going to make Bernie Madoff look like a candy store shoplifter by comparison:

ZH: Global Risk Assets Exhibiting Unprecedented Correlation
"Remember when Deutsche Bank found late last year that 2018 was the worst year for markets since the great depression, with 90% of all assets posting a drop for the year?"

So far in 2019...

"a remarkable 87% of all MSCI World stocks are up year-to-date"

In human history there has never been so many all-knowing dunces running amok as there are today. Worshipping their Casino-Bankrupter-in-Chief, who had this to say at the State of the Union:

"In just over two years since the election, we have launched an unprecedented economic boom -- a boom that has rarely been seen before."

Of course Trump is aided and abetted by an army of frauds in the Financial Services industry, now wholly unshackled from any semblance of fiduciary duty. Which means that in this era there isn't one Bernie Madoff, there's an entire industry full of them. And yet, now that the tax cut sugar high has worn off, not even Wall Street's usual expectations alchemy can hide the forward guidance implosion. So instead, they must spin the narrative:

Recall, this is the Smoot-Hawley trade war bounce circa first quarter 1930 when economists signaled all clear.

Compliments of the decoupling delusion:

"Several economists said the decline was likely a direct result of the trade war with China, and nudges U.S. growth higher, at least temporarily, while China is slowing."

"America's trade fight with the world has finally started to slow global trade and only time will tell whether this is a good thing for the economy in the long run"

"Only time will tell if slowing global trade is good for the U.S. economy"

"Palfrey tracks the biggest growth companies and said there’s an unusually high number that have fallen from the top ranks of earnings growth to the bottom 20. There are now seven companies, including Alphabet and Apple. The others are Exxon Mobil, GM, Micron, Chevron, and ConocoPhillips that have suddenly fallen form the top to the bottom ranks. That many companies have only had a “reversal of fortune” three times since 1990." 

Those three times since 1990:
Now, Second quarter 2010, and ten years ago - this quarter 2009:

“We actually see the market doing pretty well in 2019”

And what to do at the end of the cycle but loosen credit conditions:

"The Consumer Financial Protection Bureau, the government agency tasked with regulating financial companies, said it plans to abandon Obama-era payday loan stipulations that would require lenders to ensure borrowers could repay their loans before issuing cash advances.

“This proposal is not a tweak to the existing rule; instead, it’s a complete dismantling of the consumer protections finalized in 2017”

“We actually see the market doing pretty well in 2019” 

The Year Of The Pig

Tonight, the Liar-in-Chief will give an update on the Great Wall of Trump, his monument to racism. The collapse of 2008 reversed decades of immigration growth. Which explains why Trump doubled down on corruption. There is method in his senility...

As we enter the year of the pig, we are reminded that not everyone was meant to see this coming.

Ironically, what border protection couldn't achieve, financial malfeasance had already achieved for them:

"The estimated number of undocumented immigrants living in the USA reached a 12-year low in 2016"

Researchers from the Pew Research Center, which conducted the analysis, said economics played a major role in that fall. The Great Recession wiped out millions of jobs that attracted undocumented immigrants to the USA, while the Mexican economy steadily improved, giving Mexicans more reasons to stay in their country."

Democrats finally figured out that the tax cut was human history's largest theft. Better too late than never. 

Before Reagan, stock buybacks were illegal, now they are 4% of GDP:

“Corporate America has cashed in on the Trump tax bill, but working America has been left behind”

The reason that stock buybacks were illegal is because they were seen as a form of market manipulation. A way for insiders to cash out at public expense. Today, that's just "corruption-as-usual":

It's far worse than even what they have described, because what stock buybacks represent is human history's largest leveraged buyout:  Of the U.S. economy.

Paid for mostly with insolvent corporate debt, now at the highest level in U.S. history.

Corporate debt, % of GDP:

In addition, the tax cut shifted consumption forward, accelerated rate hikes, and decimated the housing sector. Why? Because sadly there is no such thing as "free" money.

Economists used to call this effect "crowding out", before they collectively lost their minds, and decided that printing money is the secret to effortless wealth. 

Here we see banks with homebuilders. Both peaked one year ago when the tax cut took effect:

At the December low, U.S. Industrials had given up ALL two years of Trump gains.

Mostly due to the failed trade war which has expanded the U.S. trade deficit to the widest in history:

Even the "MAGA" trade is now failing. The world's largest stocks by market cap - Microsoft, Apple, Google, and Amazon ALL missed Wall Street expectations this quarter:

Defense stocks - the greatest beneficiary of Trump profligacy - have zero upside now that the newly expanded military budget is FULLY priced in:

This algo-driven delusion off the December lows is about one thing only  - getting the Wall Street pump and dump working again:

"There is an outside chance 2019 could be an all-time record for initial public offerings, passing even the legendary 1999 and 2000 years."

But for that to happen, a lot of things need to go almost perfectly. There can't be any more government shutdowns, market conditions have to exhibit low volatility and — most importantly — the public needs to have an appetite to buy very large IPOs at (potentially) very inflated prices."


What could go wrong?

Unfortunately speculators have already been bilked for the past year, and have nothing to show for it, except margin calls:

Which is why only drug stocks are making new highs:

I meant real drugs. 

"This is going to fix immigration for good"

The System Is: Using People Up

I started this blog way back in the late days of 2006 when it was clear that the Bush tax cuts for the rich and the deregulation of corruption were going to end very badly for America's middle class...

It's been almost exactly one decade since the 666 S&P Book of Revelations low (March 2009). And what was learned from said revelation? Nothing. It appears that the Roger Stone invented deaths of despair campaign strategy that got Trump elected, was bereft of any form of recollection for how we got here in the first place. Because now the exact same fraud has been propagated all over again. At their behest. 

Whereas back then, fraud and corruption had infected the system, today, fraud and corruption ARE the system:

"Best tax-cut driven meltup since the last massive crash"

Actually, far better. 

Regardless of past history, what remains of U.S. "exceptionalism" relative to the rest of the developed world, is solely the domain of delusion and exploitation. The enduring fantasy that more economic "freedom" leads to more economic upside. The erstwhile "American Dream". Of course if that were not all actually true, then more "freedom" would simply mean more exploitation. More subjugation to the vicissitudes of global corporate arbitrage. Which is where the delusion comes into play, because without that, there is no way that the exact same useful idiots would continue voting against their own economic interests.

I suggest this will be the last time. Although I said the same thing in 2006. These people can take a lot of fentanyl, I give them that much. 

Nowhere is the gap between fantasy and reality - the U.S. and the rest of the developed world - more chasmic than in the realm of healthcare. Other developed nations figured out a long time ago, that healthcare is not "insurance". It's not something you need due to a random unforeseen accident. It's something that in the fullness of time everyone needs. The more treatment you need, likely the less able you will be able to pay for it. Which in insurance parlance is known as a "pre-existing" condition. Sorry, not covered. The American profit skimming cartel precludes covering people who actually need healthcare. They only cover healthy people. 

In the fullness of time, all of us will eventually have a pre-existing condition. What people outside the U.S. don't realize is what an insane insolvency gambit the U.S. patchwork "system" has devolved into. Especially for working people not eligible for Medicare (age 65), and not covered by their employer. I maintain health insurance in the U.S. and Canada, because I spend a lot of time with my parents in Canada. My healthcare costs $30/month in Canada and $300/month in the U.S., for the exact same coverage. The only difference is that recently my wife and I received a $12,000 bill from our "platinum" U.S. healthcare insurance provider for an emergency hospital visit for our daughter away at University. It turns out that the specialist who attended her was not "in network". Too bad, you're out twelve grand because of who was on call that night. I assert that no Canadian in history has been served with a bill of that magnitude. You walk out of the hospital and say goodnight. The same in Australia, and the UK. 

An unexpected bill that size would easily bankrupt most American families, yet this type of scenario happens every single day. All day. Far worse for those who don't have any coverage from their employer.

The problem with the delusional exploitation model is that eventually you run out of people who can be used up.

Donny and Banana Republicans have made it their life mission to plunder Obamacare. The last lifeline for the ever-growing number of American workers not covered by employer insurance.

Fortunately, it's their entire way of life that is going to be repealed. By a much higher power.  



"Healthcare stocks are recession-proof"

The rebuke will stand as testament against aspiring alt-Christians for all times. As a lesson for how NOT to run a country.

The full bill will be due upon receipt. 

The True Cost Of Ignorance And Arrogance: $Everything

Computers have taken over all thinking for humans. We now live in a society of unquestioning dunces...

With the leadership to match:

Unfortunately for Herbert Hoover, we don't know if the U.S. has the strongest 'Conomy in the world, because the data is still lagged, compliments of the shutdown.

What IS up-to-date is consumption confidence:

"The government shutdown rattled consumers and, unlike previous bouts, the numbers didn’t materially improve even after some 800,000 workers went back to work. That’s because there’s the possibility of another shutdown on Feb. 15, as Congressional negotiators remain at an impasse over funding the border wall desired by Trump."



"Leading" indicators through November:

"Do you see the stock market being higher one year from now"

As we see, the smart money has been selling since day one of Trumptopia. 

All while the dumb money was wrapping the noose tighter around their neck.

CEOs are the most timely indication that the 'Conomy is rolling over:

This chart confirms that this is not the end of a business cycle, this is the end of a multi-decade secular trend. One trend degree larger than 2008:

A lot of e-commerce companies today are raising money "just to roll out more stores"

"Shares fell 5 percent Friday after the company announced on a call with investors that it would likely increase investment in 2019"

Further to the subject of artificial intelligence: In 2009, smartphone sales were a tiny fraction of what they are today. One decade later and somehow this device is ubiquitous and has taken over all human executive function:

https://www.statista.com/statistics/271491/worldwide-shipments-of-smartphones-since-2009/

"The global smartphone market has seen an exceptional growth since 2009, when 173 million smartphones were shipped worldwide. In 2015, this figure passed the 1.4 billion mark. Much of this increase can be attributed to the iPhone release in 2007."

Now, a generation of new drivers can't navigate out of their own neighbourhood without GPS. Still another generation seeks all personal affirmation from a handheld device on anti-social media. The snail mail "crackberry" appears benign next to the always-on text messaging addiction of today's dumbphone. How many millions of insomniacs keep each other luminescent company as a proxy for human companionship?

Arguably the worst outcome of this seemingly ubiquitous addiction is the Borg-like mentality it brought to reality. A mindless herd of like-minded dunces seeking affirmation from other like-minded dunces. Finding solace in rampant ignorance.

Fortunately, we can find solace in the fact that the age of artificial intelligence is self-destructing. The overinvestment in automation technology to replace humans will end in mass corporate bankruptcy on a scale not seen since the 1930s. This is the scenario I "predicted" in my book, taking place in real-time.

Cheap capital emanating from outsourcing the economy, recycled into bankruptcy, by human history's biggest cabal of MBA-addled corporate drones.

The Smoot-Hawley trade war is the final nail in the coffin. Just this week we were reminded of the co-dependency between China's economy and S&P 500 profits. 100% correlation AND causation: 

"So far this week, more than 90 listed companies have issued warnings of profit losses for last year."

“Corporate earnings are worse than many had expected"

"Apple's iPhone business is in decline -- and there appears to be no end in sight...The shrinking iPhone sales led to Apple's first holiday quarter revenue decline since 2000...Apple's sales in China fell considerably. It reported revenue in the region of $13.17 billion, down from $17.95 billion in the same period a year ago."

-25% year over year sales decline in China:

Exit Stage Right:

All we ever need to know about the deranged right, we learn compliments of Jimmy Kunstler. A fantastic fiction writer if there ever was one. True to form, he would prefer a clueless billionaire Barista-in-Chief before contemplating the worst-case-scenario: a female president for the first time in U.S. history. Even more ludicrous we are to believe that there are no anti-semites on the alt-right. Unfortunately, the recent historic rise in attacks proves our favourite fiction writer wrong there too. Donny's patented intolerance - his only political asset - has given free reign to the dregs of society. It appears that 1939 and the rise of nationalism is a lesson long since forgotten by those who've been led to believe that the History Channel is for learning about Ancient Aliens. Here's how it works, historically speaking: if you don't stick up for other cultures, then when your turn comes around, there's no one to stick up for you. Let's say because you blame the "brown horde" massing at the border for all the world's problems. When everyone knows it's a bunch of racist bullshit.     

And who on the right wouldn't believe that an out-of-touch billionaire will save the middle class. To be sure, once Donny's last casino collapses we're going to need a whole lot more CappuccinoConomy. Because the decade of McJobs created under Bush lasted all of nine months before they were fed into the quarterly profit hopper.

A sampling from Jimmy's rambling incontinence:

"The problem-of-problems (and there are many) is that America has shot its wad borrowing money to keep things going - things like the consumer economy, suburbia, generous pensions, agribusiness, health care, higher education"

No Jimmy, it was tax cuts, tax cuts, and more tax cuts for the bailout class. My paycheck didn't inform me that Social Security and Medicare deductions were heading straight to the Cayman Islands - it took Banana Republicans to point out that these are now "entitlements". In developed countries, they call that "theft". 

But one Howie to another you don't have to be a genius to see through their transparent intentions:

"Schultz openly declared his decision to run as an Independent was based on the idea that he’d have to “lean left” to win the Democratic nomination. This is rich-speak for “I obviously couldn’t win the nomination if I had to compete honestly.”

His plan therefore is to skip the grueling Democratic primary and buy his way past one tier of certain electoral failure, jumping straight to the general. Once there, he’ll spend just enough of his personal fortune to split the anti-Trump vote and re-elect the dumber version of himself currently in the White House."

"I see through you, I see through you
Your dirty tricks, you make me sick"