This post-2008 era represents the Pyrrhic victory of capital over labour. Having increased for decades, the return on global capital reached its apogee in 2008, after which global interest rates fell to a 500 year low, where they've lingered ever since. In order to provide the delusion of recovery, in absence of real demand, capital had to be both supply and demand. Supply via investment and demand via unsecured debt. Both massively leveraged to interest rates and hence the business cycle.
Further augmenting this delusion was the use of derivatives to manipulate global assets higher providing the delusion of reflation. Specifically in the oil market. Now, in binary fashion, Ponzi reflation is unwinding at lightning speed. Fed rate hike expectations are falling in lockstep.
Trump is actively unwinding his own delusion:
"U.S. crude prices are now approaching levels that could start to hurt American oil and gas drillers, a pillar of Trump’s political base."
When the Fed blinks banks will get annihilated.
The Tech rout continues, Apple is bidless having been downgraded by several brokerages this week. Analysts now expect a year over year decline in iPhone sales next year - the first ever.
