Sadly, the gambling cycle is over. Only people with misallocated capital don't want to admit it i.e. everyone you know. Cannabis may have been the recreational drug of choice for pikers, but for high rollers the 2018 drug of choice was...
"Tax cut"
First, on the subject of why one should never mix gambling and bong hits, exactly one year ago today on CNBC, Jimmy Altucher predicted that Bitcoin would reach $1 million by 2020. Subsequently, cryptocurrencies have shed $700 billion in market cap.
He top ticked the market. The self- appointed "guru" of crypto currencies turned out to be the Bernie Madoff of crypto.
And of course cannabis stocks had two big rallies this year, both of which coincided with "new highs" in the S&P. What else?
Slight divergence on the second high (lower pane):
Getting back to the real drug of choice, the tax cut, contrary to popular belief, the trade war between the U.S. and China is not the greatest threat to the U.S. economy - the greatest risk stems from the well-cultivated and ubiquitous stoner high that the U.S. economy is strong. Trump and the Fed are now boxed in by all of their bullshit, and admitting the truth is unfortunately a foreign concept...
"Tax cut"
First, on the subject of why one should never mix gambling and bong hits, exactly one year ago today on CNBC, Jimmy Altucher predicted that Bitcoin would reach $1 million by 2020. Subsequently, cryptocurrencies have shed $700 billion in market cap.
He top ticked the market. The self- appointed "guru" of crypto currencies turned out to be the Bernie Madoff of crypto.
And of course cannabis stocks had two big rallies this year, both of which coincided with "new highs" in the S&P. What else?
Slight divergence on the second high (lower pane):
Getting back to the real drug of choice, the tax cut, contrary to popular belief, the trade war between the U.S. and China is not the greatest threat to the U.S. economy - the greatest risk stems from the well-cultivated and ubiquitous stoner high that the U.S. economy is strong. Trump and the Fed are now boxed in by all of their bullshit, and admitting the truth is unfortunately a foreign concept...
"The sharp pullback surprised economists, who had expected pending home sales to rise by 0.5 percent, matching the increase originally reported for the previous month."
Surprised economists? I don't believe it. The job description for every economist should have as primary requirement - "enjoys having head permanently installed in own ass".
Speaking of the cost of capital, here below is the key reason why now is NOT anything like the 2016 Central Bank engineered soft landing. Money markets are now yielding more than the S&P 500, which has led to substantial rotation back to "cash". Whereas in 2016, there was a rotation out of cash:
Of course it's long-term rates that are imploding the housing market. What we learned today is that balance sheet unwind will continue indefinitely, and that the Fed and banks believe it's "running smoothly":
Speaking of running smoothly, here we S&P volatility with the Fed balance sheet. The last two times the balance sheet contracted directly preceded 2010 Flash Crash and 2011 Fiscal Cliff implosion.
This time, there is liquidity withdrawal on the short end and the long end at the same time.
We've never seen that much implosion capability before.
We've never seen that much implosion capability before.
The gambling cycle is over, however those with misallocated capital don't want to admit it.
