Tuesday, February 28, 2017

ALL ABOARD Carbon Sequestration aka. Deepest Burial

Exxon and friends have run out of hedge fund fools to con...Who knew that denialism could be so useful?

Oil has been squeezed sideways into an ever tighter trading range held up by record hedge fund speculative buying and held down by record inventories...There's only one problem, speculator volume has collapsed...

Trump: You're the man...the best liar around hands down. Best Twinkie ever...

Record net speculative longs and record crude oil inventories. Two things that go great together...

Although Energy stocks don't seem to think so. We see where inventories (black) were the last two times Energy stocks peaked:

Here we see WTI in the upper pane with relative strength hugging the midline, just like mid-2015.

Since the New Year, ETF volume middle pane has collapsed as has realized volatility...

"It was a bad time for gasoline demand to implode"

Gasoline demand (red) 24 month moving average, with U.S. deficit aka. Hegemonic "GDP":

The world's largest and most profitable oil stock, has left the party following its historically colossal 19.3% reserves writedown last week.

In other words at these low prices, Peak oil is becoming a reality, as over-invested capital goes the way of the Hegemonic jobless consumer:

In addition, for the second straight year, Exxon failed to replace all the reserves it pumped—in 2016, it replaced just 65% of its produced reserves. In 2015, it replaced just 67%. Prior to these years, Exxon had replaced at least 100% of its production every year since 1993.

Thanks to Trump and all of the liars in the oil industry, hedge fund morons have zero chance of seeing it coming...


This will be a deep burial as record oil market gambler capital gets sequestered amid limit down margin calls...

The Big Shitting of Bricks. The Sequel.

What am I going to do when this is over? Make a movie, what else?

By all rights the flagging "reflation" rally should be over tonight with Trump's speech to Congress. Every tool that can be conned is already in the market, while insiders and institutions are selling with both hands...

Base case scenario, the rally is done, and the next piece(s) of macro data will also confirm that the economic cycle is over. At which point, panic will ensue into a no bid market.

This is the S&P / VIX ratio showing that the cost of hedging is rising exponentially. Anyone who wants to hedge is already fucked company, however unfortunately they haven't figured it out yet...

The 10 year yield backtested the breakdown line:

The junk stock rally is way over...

Institutions are selling...
Price / volume:

And so are insiders:

Which gets us to the long-term view...

The junk stock rally is game over man. Sorry to hear about Bill Paxton...

Flight to safety Risk
Micro cap / Dow ratio with VIX:

Overnight risk
The Nikkei is under its 50 dma again...

Long-term distribution
S&P / total market volume:

Retail is done.

Ag commodities are going full 2008


I see Oscars and Golden Globes in my future. 

"A sequel tragicomedy about a society of morally decayed fucktards with the attention span of a coked up flea, conned by the exact same morally void psychopaths as last time"

HEGEMONICS 101: "It Can't Happen To Me"

"Reagan proved that trade deficits don't matter, IF you're a reserve currency hegemon, and IF you enjoy surprise collapse"

I get why people voted for Trump. Hillary was eight more years of ignoring the problem. Trump was for blaming the rest of the world for America's problems. I get it, the latest clown to paper over the real problem:

Here is corporate profits % of GDP (blue) with Manufacturing employment:

Shock Doctrine 1.0 and Shock Doctrine 2.0:

Worse yet, what they all still apparently don't understand is that capital can't survive without demand. There is no such thing as a "Supply side" economy. That is a fantasy for generations who've had it too good for too long. Today's newfound Hegemonics has nothing to do with real supply and demand economics, it has only to do with being a serial conned dunce, wherein:

Quality of jobs was traded for quantity of jobs

Wages for corporate profits

Economy for a casino

Productive capacity for debt

Solvency for insolvency

Real news for fake news

Just today, we learned that Q4 GDP missed estimates. Lots of excuses were made for this of course, but buried in the fine print is the fact that the expanding trade deficit shaved 2% off of annualized GDP.

MW: Feb. 28, 2017

Blah, blah, blah...

The wide trade deficit effectively cut fourth-quarter GDP in half."

Oh, is that all. January also recorded the second largest trade deficit since August 2008, due to stronger dollar. Bueller?

Meanwhile, filed under "you can't make this shit up", jobless consumer ConnedFidence is soaring. The power of social mood at an all time casino high:

And yet even as jobless ConnedSumers evince all confidence in the Reality TV host in chief, Target's profit imploded -43% this quarter, and its forward outlook was far lower than analysts had expected...


Meanwhile, not to be outdone in casino land, Fidelity reduced commissions by -37% imploding the entire retail brokerage sector...


But, as long as the robber barons are fat and happy with their bailouts and printed money, that's all that matters...

Monday, February 27, 2017

The Clown Is Busy. Hammering The Last Nails Into the Coffin

Ahead of his joint speech to Congress Tuesday evening, Trump is pounding the last nails into the coffin of his fake reflation rally and the dunces who bought into it...

Perfect. Hold that position:

In addition to cutting taxes for everyone and every corporation, while raising defense spending by $54 billion, Trump promises to "spend big" on infrastructure. And just like his kids won't be the ones going to war, similarly, none of this is his money, since we still have no idea if he even pays taxes, being the first Emperor in U.S. history to not release his tax returns...

The heavy construction index has had a good run. But unfortunately these stocks are massively leveraged to the rest of the world (black):

Rest of World risk. Visualized:

Meanwhile the troubles in retail go beyond the "pricing in" of a border adjustment tax:

"The number of U.S. retailers ranked at the most-distressed level of the credit-rating spectrum has more than tripled since the Great Recession of 2008-2009"

The rise is part of a wider trend...that has retail replacing oil and gas as the most-troubled industry.

Jobless consumer risk. 

Fake reflation risk:

Recession/defense stock risk...

All three funds have been investor favorites since November’s election. The iShares fund, the largest of the trio, with about $2.3 billion in assets, has seen inflows of $1.2 billion since the election, more than doubling its assets in the process

Stock/bond rebalance risk

Global financials risk

Flight to safety risk

Hot money risk

Oil risk

China risk

Complacency/exposure risk

And of course, volatility risk:

Circus Clownius: The Last Emperor

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist."
-President Dwight Eisenhower, 1961


It's always the cowards who have something to prove...

The deferment was one of five Mr. Trump received during Vietnam. The others were for education.

Trump just hammered the end-of-cycle recession trade by announcing his proposed defense budget increase. Defense stocks now have to be sold, since the defense increase is now known to every moron on the planet. Instead of just Goldman Sachs...

And they were having such a good end-of-cycle run too:

Republican President Donald Trump will seek to boost Pentagon spending by $54 billion in his first budget proposal and cut the same amount from non-defense spending, including a large reduction in foreign aid

Washington Post:
In a Kaiser Family Foundation study published in early 2015, the average respondent thought that 26 percent of the federal budget went to foreign aid. More than half of the respondents thought the United States was spending too much on foreign aid.

Of the $50 billion, $18 billion is humanitarian aid, which is .4% of the Federal budget...

"We can't get $54 billion from foreign aid"
"They're illiterate, they won't know. We'll raid the next generation as usual"

Assuming that the clown in chief can't actually find the money in other departments, since he took entitlements off the table, and of course defense, then this is what the budget deficit looks like:

As we see, along with cigarettes, diapers, junk food, and a hodge podge of other high payers, defense is the #1 recession trade:

The dividend yield fund: