Friday, September 29, 2017

Plundering Grandchildren For Fun And Profit

The Republican Party has sold its soul, and it won't be coming back. They're lucky it lasted this long...

"I'm doing the right thing, and it's not good for me, believe me"

Trump Tax Plan To Benefit "Top 1%" Most, Cost $2.4 Trillion, Middle Class To Pay More Taxes

Between the Fed and Trump, just through sheer over-confident bullshit they've conned markets into wholeheartedly embracing fake reflation at the end of the cycle. Granted, it's not hard to con those who don't believe in reality...

"Come and get your tax cut"

"Folks We've Reached Terminal Idiocracy"

This society has turned into an old age home:
Absolutely zero recollection whatsoever
Nothing is ever allowed to change
Non-stop talking
Totally incapable of accepting the truth in any direction

Most importantly, they never want to see it coming, which is why they elected sky captain...

One year ago, this week:


Having voted against their own economic interests for the past 35+ years, Trump's Kentucky Fried base decided to elect a populist psychopath to fix all of the damage caused by Supply Side Ponzinomics. Needless to say, the golden faux is in the hen house, and yet again his base are all for it...

To be fair, the reason why Trump ignored Puerto Rico after the recent hurricane is because he didn't realize it's part of the United States. Once he figured that part out, his Goldman Sachs appointed cabinet reminded him of Puerto Rico's recent debt default:

"Texas & Florida are doing great but Puerto Rico, which was already suffering from broken infrastructure & massive debt, is in deep trouble"

Next, Trump told an audience in Alabama this past week that he doesn't benefit from the massive tax cuts:

"I'm doing the right thing, and it's not good for me, believe me," — President Donald Trump on proposed tax cuts (Sept. 27, 2017)

Why wouldn't they believe him, he's their false prophet and they are his trusty base who always vote against their own interest:

Getting back to the casino...

Long Emerging Markets, short volatility. What could go wrong?

Speaking of conflict of interest, Wall Street, and all time highs - here are the largest IPOs from the past year:

Serial pump and dump visualized


It's called "senility"

No dotard remembers this movie...

ZH: (Dec. 2014) Hugh Hendry Drinks The Kool-Aid

"there is no serious stimulus programme that our Disney markets will not consider to be successful. Markets can be no more long term than politics and we have no recourse but to put up with the environment that gives us"

"The modern market is effectively Keynesian with an Austrian tail"

Unfortunately, Hendry didn't have the brass to stick it out for the tail:

Thursday, September 28, 2017

Letting It Ride On A Black Swan Event

Normally, gamblers seek to AVOID Black Swan events, today's gamblers are betting it ALL on a (continuing) Black Swan event...

As of now, this past year has been the least volatile since 1959...

"September is set to be the 11th straight month in which the S&P 500 has either risen, or has fallen by less than 0.1 percent"

Unfortunately, as we see below, despite being the least volatile year for the S&P 500 in decades, this has been the MOST volatile period for the VIX: There have been more large one day VIX spikes this year than in any year since 2008 (bottom pane). I am guessing that has a direct correlation with the RECORD short futures bet on volatility. Because as we see in the top pane, second derivative volatility is now tracking the futures short interest 1:1:

In other words, regression to the mean involving a commonplace two percent downside move in the S&P 500 will blow this entire shit show sky high. And it stands to reason that record misallocation of capital, Fed balance sheet rolloff, the real Forrest Trump, L'il Kim, all of the above, could cause that to happen.

But as long as they're having fun, why spoil the party?

They will party to the last day...

And their trusted sociopaths won't say one thing to them about risk.

You know, like last time:

Denial Is Natural Self-Selection

Efficient and democratic...
Hairless monkeys decide for themselves if they want to trust pathological circus clowns engaged in the studied art of knowing everything by knowing nothing...

The global everything super bubble is already imploding in autos, retail, art work, commercial real estate, frackers, Apple/iPhone, FANG stocks, and of course crypto currencies, the mega-bubble of this era:

Move over Bitcoin, here is Titcoin:
"Titcoin (Ticker Symbol: TIT) is a type of digital currency called a cryptocurrency that uses pornography on a decentralized peer-to-peer network to manage the issuance of new currency units while simultaneously processing transactions"

There are over a thousand crypto-currencies globally. Full list, here. These are the biggest ones:

By far the largest by market cap, Bitcoin, is about to split again into multiple different currencies, because miners can't agree upon which protocols to use going forward:

Unfortunately, there is only so much money to go around. The weak link in ALL of these new currencies is that they are primarily used for speculative purposes. Most are not legal tender anywhere. Which means that they do not have a stable relationship vis-a-vis the real economy. Therefore, their value is not determined by an exchange with merchants who are willing to hold the currency as a store of value, their price is determined via exchange with the next willing speculator looking to unload at a higher price. 

And that is not sustainable:

Relative performance:

Meanwhile, Trump tax euphoria round 20 is beginning to wane just as it has every other time...

The vaunted "Gundlach trade" (higher bond yields):

Unfortunately for the crowded Gundlackers, the buzz saw known as the Fed is quickly approaching with Rolloff #3. But remember, no one knows what will happen when the balance sheet shrinks for the third time:

Due to Tax Cut Mania, gamblers crowded into the smallest and riskiest stocks on the premise that they will benefit the most from the imaginary tax cut:

Also waning is OPEC euphoria from last week's circle jerk:

Big Cap Tech has had a good retracement, not confirming the S&P's latest new high. Percent bullish is dropping despite the recent bounce:

China is back to devaluing their currency in size, as the entire EM currency complex rolls over...

Which leaves just volatility compression holding up the entire global casino...

Wednesday, September 27, 2017

Bread And Circus Clowns Alone

But which one wins hope or reality? Hairless monkeys want to know...
The year is going to be marked by the constant tug and war between hope of fiscal stimulus and the reality of monetary policy"

Yesterday, the Fed admitted that reflation is a hoax so they're going to keep raising rates until the 'Conomy floats back from China. Also yesterday, plundering healthcare to fund tax cuts officially failed. So today, Circus Clownius will discuss imaginary tax cuts while gamblers go ALL IN on fake reflation...

Seven months ago:
"We will cut taxes massively for everyone"

In the meantime...

Any questions?

"It is possible, Yellen said, that the Fed may have “misspecified” its models for inflation, and “misjudged” key facts like the underlying strength of the labor market"

"Free Trade"

"we expect consumers to remain a primary driver of U.S. economic growth in 2018"

Don't try this at home

"See, hope wins again!!!"