Monday, July 31, 2017

Highest Stock Market RISK EVER

The Trumptopian tax cut rally is running on revenueless Biotech, while options gamblers bet August will have the lowest volatility on record...

Fakest economic numbers in years, lowest employment participation in 40 years, real wages declining, border insecure, mad WH chaos. Anyone who believes this guy deserves their fate...

Speaking of revenueless Biotech, here is the revenueless S&P 500 through Q1, inflation-adjusted.

Due to a lack of revenue growth following nine million jobs getting obliterated in 2009, this entire cycle was cost-cutting. Which works fine when one company does it, but when they all do it simultaneously, it leads to a further lack of revenue. Only they haven't figured it out yet. 

Supply-Side-Dumbfuck-o-Nomics is imploding:

The two largest spikes in volatility in the past six years both occurred in August. One occurred in early August (2011), and the other late August (2015). Last week's record low VIX signal(led) that the market is pricing in record low volatility for the next 30 days. Meaning that anything outside of non-existent volatility is not "priced in"...

In other words, machines (and humans) are very good at predicting the past, but not so good at predicting the future. 

What gamblers need is a better Magic 8 ball...

Don't trust the VIX anymore?

Fair enough
It's been nine months since the election, which is the longest stretch of buying the dip since 2009:

I noticed that the casino is tracing out a very similar pattern to last Fall leading up to the election. Rotation to junkier and junkier stocks. For starters, please see first chart above again.

It was the TwitterTard-in-chief who brought this pattern to my attention:

Aside from Chinese internet stocks which may or may not represent real companies, the most speculative stocks in the U.S. market are small Biotech.

This is the clinical trials ETF. Many of these companies don't even have revenue yet. As we see it peaked last Fall prior to the election:

Here is one of the Biotechs in that ETF that has no revenue:

Box is a corporate internet storage company that has -35% profit margins, meaning they sell dollar bills for 65 cents...

The Bitcoin Trust fund is clinging to the 50 day:

And I would be remiss in pointing out that Facebook peaked last:

Amazon is now (slightly) below the 50 day...

Sunday, July 30, 2017

Trumptopian Mallocation Of Capital

Why did gamblers go ALL IN this past week? Because with Obamacare repeal now dead, it's:

"Tax Cut time"

Which also explains why the fake reflation trade remains bid despite the imploding economy. 

The billionaire Koch brothers are attempting to drive Washington's policy decisions again.

This time, the siblings are prepared to sway GOP leaders' decisions on tax reform.

And they'll kick off their campaign this Monday, July 31, in a meeting with officials from President Donald Trump's administration

The question on the table is what will arrive first, a tax cut or the freight train?

As always, I say the freight train

"I bought for the healthcare rollback, but stayed for the plundering of grandchildren"

"Going Out Of Business. Everything Must Be Bought"

For about five minutes this past week Jeff Bezos was the richest man in Babylon. This week we also learned that going out of business is accretive to GDP. But only for a time.

Which is the foremost lesson from Globalization, yet to be learned by the de facto Idiocracy:

"Real GDP has never been higher"

"All commodities must be sold"

The holy grail of gambling is to find the perfect crash indicator that both indicates the economic cycle is ending and that capital has been sufficiently misallocated to create a panic crash. This week we got news that the Fed is done raising rates for the foreseeable future, 2nd quarter GDP missed expectations, Transports are crashing, and the last retailer standing has imploded. Arguably the "indicator" light is flashing red alert. But as usual, the burden of truth is on bloggers instead of on the lamestream CNBS media who've been peddling bullshit for eight years straight...

Historically, the casino has ALWAYS peaked ahead of the economy. In Y2K by a full year. In 2007 by a few months. In this cycle, Central Planning for billunaires assures that the economy will be in a (back-dated) recession before gamblers realize they're fucked company. Nevertheless, the burden of truth somehow still rests with us realists. One blogger believes he's found it - recreational vehicle sales. 

"What’s the last big toy you buy when things have been good for a really long time and you already have all the other toys? An RV, of course. A dubious thing to own if you already have a house, but when the good times seem likely to roll on forever, why the hell not?"

Thor Industries is the largest RV manufacturer in the U.S.:

Meet the real Martha Fockers
But really, do billionaires buy winnebagos when they're feeling flush? No, they buy artwork.

Which is what makes this chart compelling: It's Sotheby's art auctioneers:

And of course, EM currency/stock speculation relative to commodities rolling over, embeds both a speculative and economic element of risk as well:

"Going out of business was accretive to GDP"

But the chart of the week has to be this one showing the change in private inventories, which arguably reflects the rate of retail expansion and/or contraction. It's also a key part of GDP, although currently overshadowed apparently by the large number of liquidation sales. 

Recall, this was the narrative we've been told to believe throughout this economic obliteration i.e. Amazon, with 5% of total sales, imploded the shopping mall, dollar stores, sporting goods, specialty retail, home improvement, and grocery stores.

Because everyone is buying broccoli online now:

In reality of course, Amazon was merely saving Whole Foods from Whole Foods:

Then two weeks ago, they started selling refrigerators online, which took out home improvement stores:

This week they started selling Mocha Frappuccinos online. Which proves my hypothesis that the people at IBD are as dumb as a fucking brick:

Goodbye CappuccinoConomy, we hardly knew ya - the 'Free Trade' narrative that the U.S. would outsource manufacturing and then obtain competitive advantage in Cappuccino production, just went out the window...

And of course, also this week Amazon imploded Amazon, but of course, it's just another buying opportunity:

"The stock AMZN, -2.48%  slumped $25.96, or 2.5%...But history indicate that is actually a pretty meh reaction to results. Over the past seven years, the average one-day reaction, in either direction, to earnings reports has been 7.4%." 

The inconvenient reality strikes dumbfuckistan again...

Island reversal of fortune, visualized:

All of which means that Amazon will be selling Winnebagos next. And then the underwear shall be mighty stained.

Bonus chart:

Saturday, July 29, 2017

One Clown To Rule Them All

A generation of salesmen has no clue when they're being conned. Headline U.S. economic stats have the veracity of a magic 8 ball...

Yesterday, we learned that GDP "bounced back" from the first quarter. However, 2016 was the lowest annual GDP growth since 2009 and yesterday Q1 GDP growth was revised lower. In other words, just like the bogus unemployment numbers, U.S. GDP numbers are 100% smoke and mirrors:

Here is quarterly GDP growth with change in private inventories (blue):

Bars and Restaurants

"Only eight years of warning"

Friday, July 28, 2017

Trumptopium-239 Is Not Stable

"Trumptopium-239 and 241 are fissile, meaning that they can sustain a nuclear chain reaction"

To be fair to Donny, he's merely a sign of the times. The last ditch attempt by a flailing empire to salvage what's left of Pax Americana. He and the copious man-boys he summoned from the primordial abyss are just along for one more Social Mood joyride...

The story of the week for those not reading National Enquirer and Breitbart was this one:

Which immediately elicited far more alarming editorials such as this one:

Plunging Sperm Counts Are Much Ado About Nothing

Speak for yourself honey. We went from Sean Connery to Justin Bieber, if you're not alarmed it's only because you're a woman. Contrary to popular belief, dildos and Viagra are not going to fix all this.

Not by coincidence, the last-hope-in-chief tweeted some nuclear escalating Twitter-policy about transgender "people" no longer being welcome in the military.

Us males are caught in a seine purse that's getting tighter and tighter even as the cogency of our narratives becomes ever-more mentally challenged. The male species now has 1950s leadership appended with a fucking Xbox. 

It's not clear if we should pick a side or man up and jump off a fucking bridge. 

In the meantime, while that's all not getting sorted out, getting into Trumptopia will be easier than getting out. For those who enjoy watching the same movies over and over again, this will be great. I caught my parents watching the same movie twice, I said "you've seen this". They yelled back "don't tell us the ending". That's how I got into blogging.

The last time the Fed admitted they can't find their ass with both hands was late 2015, early 2016:

The only difference between now and then, is that now everyone has their head up their own ass...

The more Trump's approval rating plummets, the more comfortable gamblers are with owning risk: