Tuesday, April 8, 2014

They Don't Wake You Up From a Stoned Coma at the Top

Or Do They?

Not one day goes by when some prognosticator doesn't give some specious reason for buying into the already collapsing status quo. It's unbelievable...

"as the Federal Reserve keeps unprecedented “emergency extraordinary measures” of easy money and 0% interest rates and as the Republican, Democrat and global governments’ policies are all geared to corporate profit growth, my analysis and my playbook continues to point to ever bigger bubble-blowing bull markets ahead in the stock market in general and in the high-flying momentum stocks. "

"...all that money that continues to come into the stock market from retirees and retail investors around the world who are presently being forced into risky stocks and other risky assets since 0% interest rates don’t provide income, is clearly creating imbalances in the economy and the markets..."

[Insert assorted bullshit here]
...In summary...
"today’s stock market, it is nowhere near as overheated as it was 14 years ago..."

What we are experiencing isn't just a stock market bubble, it's the largest bubble in human history aka. the Globalization Bubble. But since most people take it for granted, they can't see it. Regardless, there is no comparison between now and Y2K:

The Jedi Mind Trick for the Stunned Masses
Dow with Fed Balance Sheet
He's right, this is not like Y2K - back then the Fed wasn't buying stocks...

The Ultimate Bubble
Profits as % of GDP: All Time U.S. High
4% in Y2K and 11% today
There is no meaningful way to compare stock P/E "valuations" between now and Y2K with profit margins now 7% higher as a % of GDP. "Prices seem reasonable". Duh...

NYSE Margin Debt
Slightly higher than in Y2K
Zero Hedge
Index Put/Call
Don't worry, it's not a bubble...

Home Gamers Throwing their Last BitCoins Into Tesla Call Options
Equity Put/Call
Slight Divergence

All Aboard: Aye
Bearish Sentiment: 25 year low

Money (Out)Flow
Don't worry if the smart money is already getting out ahead of time, because it's not a bubble...

Historically Overbought
He's right, it's not Y2K, it's far worse...

Coiled Spring
Never seen this before either...

This is not a top
It's a mega top...
% of stocks above 200 DMA

The Nikkei Peaks First
Peaked first in 2000 and 2007, let's see if it's right this time...

Utilities Now Leading
An Excellent Late Cycle Indicator

Going parabolic

Global Macro - already rolled over
(Canadian dollar, Brazil/Russia stocks, Copper)

Yen Carry Trade
Probably the only chart that matters
Hanging by a thread: If this continues to reverse lower, then the free money party will end at which point all kinds of shit will break, HFT likely being the least of our worries...

Brokers Peak Late
All of that late stage small investor money pumps up the retail brokers into the bubble top...
Schwab - already rolling over

The Headless Horsemen
During Y2K, the four horsemen of tech were Microsoft, Cisco, Dell and Intel
Today it's Facebook, Tesla, Netflix and Yelp - don't worry about the quality control problem

In any case they are already rolling over. Soon we will be debating the term "crash"

U.S. Jobs and Median Household Income
Both peaked in Y2K
He's right, there is no bubble here...

Wages (red line) as % of GDP
With Profits (blue line) as % of GDP
The great zero sum game