Thursday, June 30, 2016

BEYOND Idiocracy: Recession Momentum Trades

We're six sigma beyond Idiocracy...

Global deflation, bond yields, oil, Yen, Yuan, Stocks ex-U.S., GDP, Global Trade, Europe, Financials, Tech, Retail, Transports, Energy, Retail... 
"I'll take S&P 500 for everything Alex..."

Recession stocks are now momentum trades, in CasinoConomy. What else could they be?

"From a chart-oriented perspective, "These are momentum stocks,"

"Dollar store stocks are surging. Dollar Tree hit an all-time high on Wednesday, and Dollar General hit a record high on Tuesday, as investors may look to retreat into safer stocks during a turbulent time in the stock market."

"I'm retreating into safer momentum stocks"

U.S. And Them

"With, without
And who'll deny that's what the fightings all about"

S&P downside gaps (50 dma) with Global Dow:

Mind the Gap 'n Crap:

CasinoNomics By Harvard aka. Artificial Intelligence

The way it works in a nutshell is that you gamble your life savings away at the Dow casino while the entire world implodes around you. Then you say you were on Season Seven Kardashians and didn't see it coming. They won't think you're an idiot, because they were doing the same thing...

"There IS no alternative"

I finally figured out how CasinoNomics "works". First and foremost, the casino is the pot of gold at the end of the rainbow that makes the status quo seem to "work". Devoid of any real underpinnings, which have long since been sold for special dividends...

Warning: This will sound really stupid, but you should see the people who bet everything on it...

Seven Seasons of Kardashians And CasinoNomics

This is the dumbest society in human history without any comparison. A de facto Idiocracy...

Below we see the all-importance of the Dow Jones grand Casino in the perspective of a global economy in total shambles, lurching towards final collapse. It only took seven years of lying, neglect, mass layoffs, peddled fiction, Faux News and above all CasinoNomics.

"Because printing money was their secret to effortless wealth"

The global 1% have more wealth than everyone else combined, so George Soros just came out and blamed Brexit, for fucking up the "system". 

"It was all going so well. For me. Fuck everyone else..."

World ex-U.S. with global GDP growth:

U.S. Deflation

U.S. bond yields (2s, 10s):

German bund yields


Deutsche Bank
ZH: June 29, 2016
IMF Ranks Deutsche Bank As Number One Global Financial Risk

Chinese Yuan rate of change with U.S. stocks:

Global Financials

U.S. Banks

U.S. oil inventories:

U.S. payrolls (monthly):

U.S. Retail:


Corporate profits (Earnings Yield):

Fear Of Missing Out. On Collapse

Relief over Brexit has them going FULL MANIC...For Team Greedthink of course it's all about quarter end window dressing and volatility compression ahead of the long weekend...

Marking up the end of the quarter, where have we seen that before...

It's called wave 1 down. And wave 2 up...

The CasinoNomic momentum algos were in maximum overdrive to fill the Brexit gap...but fell just short:

Got quarter end window mark-up volume?

Got blow-off volume?

Oil versus stocks:

I mean Deflation, Treasuries, JPY, Oil versus "Stocks"...

Price is not keeping up with volume

Treasuries and JPY 

Global Dow, not impressed:

Momentum is critical in CasinoConomy

Never Cry Collapse In Broad Daylight

Eventually Club Entitlement stops listening and goes all in on dumb beta at the top...shit happens...

ZH: June 30, 2016

"Did I say Financial Crisis? I meant buying opportunity"

As long as this never rolls over, things will be fine...

Self-Interest Is Self-Destructing

Globalization is a zero sum game, 1% winners on the way to 0%...

Now, as individual Central Banks race to save their own casinos at the expense of all the others, this will be an important world lesson in what happens when self-interest self-destructs...

No one has the courage to tell them, it can't work: ZIRP, NIRP, QE, PSPP, CSPP, CNBS, BTFD, BTFATH...

"Now you see, this is a very special amplifier..."

Some dunce actually wrote this on Wikipedia:
QE is a very different form of money creation than it is commonly understood when talking about "money printing". Indeed, the term printing money usually implies that newly created money is used to directly finance government deficits or pay off government debt. However, with QE, the newly created money is directly used to buy government bonds or other financial assets.

"When you need that extra push over the cliff, where can you go? To 11, exactly"


Deflation with Deutsche Bank. Two things that go down great together...

CasinoNomic EndGame: CurrencyMegaplosion In Progress

Brexit Monkey hammered China and Japan. Now Global policy-makers are racing to figure out how to devalue all currencies at the same time...

This is a training guide for competitive devaluation for clueless Central Banksters who got their PhDs from a Cracker Jack box:

BBG: June 27, 2016

After Britain’s shock vote for secession, officials in Beijing are contending with a slumping euro and mounting economic uncertainty in Europe, just as a surging dollar raises the risk of capital outflows. That’s forcing a deviation from China’s strategy for much of this year, where authorities maintained limited gains versus the greenback to buoy confidence in the yuan’s stability

“With the fundamentals of the yuan pointing to depreciation, further pressure from Brexit is likely to pose challenges to the PBOC in terms of its policy direction

Faster declines risk reigniting a vicious cycle where expectations for further weakness quicken capital outflows

“The second round of capital outflows has started...You can’t underestimate the impact."

Fast forward to today:
The Bank of England just announced further easing which pounded Sterling and the Euro lower since they are now trading in tandem. At the same time, the Yen strengthened on the news. In other words, further inevitable declines in GBP will be the gift that keeps on giving for Japan...

The Yen and Yuan are going in opposite directions, accelerating this implosion:

Wednesday, June 29, 2016

Smash Crash From All Time Highs: Base Case Scenario

Three out of four of the largest downside gaps in the S&P 500 came in the past year, compliments of "The rest of the world". They all got bought with both hands, making my 'smash crash' hypothesis wrong so far. Past performance is no guarantee of future result... 

Because disintegration of the EU was another buying opportunity. What else?

ZH: June 29, 2016
Option Skew Hits Record Level
Deep out-of-the-money bets on a post-Brexit Black Swan event reach all time highs. Previously high readings took place in late December prior to the January meltdown...

Someone always knows something, don't they?

Three of the largest gaps in 12 years, all occurred in the past 10 months. Brexit is the last red bar to the right, which ended the first leg down (blue arrow is today's close):

Downside gaps with European Stoxx:

Mind the gaps: