Thursday, January 31, 2019

The Dumb Money Bubble Is Bursting

In a Ponzi economy, forward earnings estimates have the veracity of a Chinese fortune cookie - the investment advisors are the waiters. The "fundermentals" of a Ponzi scheme are strictly how many people can be conned into self-imploding...

Which is why every piece of information must be cast as good news:

Recall that last January, was the best start to a year since 1987. Nevermind how that irrational exuberance imploded, because now THIS is the new best meltup since 1987. Which of course just gets the casino right back to where last year's January rally started.

You can't make this shit up:

Unfortunately, if a 1987-style cascading waterfall crash were taking place in real-time, as it is now, there is no way the sheeple would know, because of the lamestream headlines.

Today's manic headlines give ZERO context for what has already transpired leading up to the current moment. They're a snapshot. In the context of a slap happy Idiocracy, they're at best a form of infotainment. At worst, they are highly misleading.

The Financial Services cartel wants us to constantly believe it's all good news as far as the eye can see. Why? Because this is a Ponzi scheme after all. 

In a de facto Idiocracy, pot stocks are the only reliable leading indicator: 

Here is where it gets interesting. Amazon, having cleared out the competition with predatory pricing, like all monopolists - has now decided to turn a profit. Which means it is morphing from growth stock to grown-up stock. The only problem is it is therefore having to sacrifice the top line to bolster the bottom line.

Wall Street is not happy that the stock is no longer in Peter Pan mode:

"Amazon reported an earnings beat across the board, but first-quarter revenue guidance fell short of expectations."

We've seen this movie before, just last quarter. We also saw a version of it exactly one year ago:

Speaking of waterfall crash, Amazon (above) is eerily similar to the Momentum portfolio shown below. Because it IS the momentum portfolio - and the most widely owned stock by hedge funds.

While above are the largest cap momentum stocks, small and mid-cap growth stocks are just getting back to last February's LOWS:

Unfortunately, China's Ecommerce behemoth, Alibaba, is saying the exact same thing as Amazon - growth is slowing.

Note the Idiocratic headline - they "beat" due to ever-lower expectations.

Which is why current trade talks are a zero sum game. And continually going nowhere.

The next meeting is slated for the end of February to coincide with Trump's next meeting with his other buddy, Kim Jong Un. Which will leave zero margin of error:

Sadly, this farce is running out of time, amid more fake news headlines:

"The upbeat mood was chilled somewhat by the White House insistence that March 1 was a hard deadline for a deal, a failure of which would lead to an increase in U.S. tariffs on Chinese goods...Analysts mostly remain deeply skeptical that a genuine trade deal can be done on this time frame”

"Asian shares are the highest since the last time the S&P 500 imploded"

"Fuckin-A, bubba"

The past decade visualized:

"Great News, The Cycle Is Over"

Just six weeks ago the Fed was convinced that markets were wrong, and they were right. In the interim, they've come to realize that markets were right, and they are flying blind...

In other words, gambler mania and Fedspeak b.s. aside, the Fed just admitted the cycle is over. 

Any questions?

"...futures markets are pricing in no further tightening and in fact are noting a small chance for a rate cut over the next year"

No surprise, the Fed has not even the slightest clue what is going on in the economy because the shutdown has not only distorted first quarter GDP, but it has also delayed and distorted myriad government-produced economic reports. Data that is normally already lagged by weeks and months will now be lagged by an entire quarter. Which means this period of mass confusion will persist well into the second quarter. All of which comes at a "bad time" to say the least since economic data were weakening going into the shutdown already. Hence, the Fed threw the casino a bone by saying that the case for further rate hikes has "weakened" even though the "economy is still strong".

Bond traders are not buying it:

What Wall Street was especially excited about was new "language" regarding the balance sheet, even though no specifics whatsoever were offered. Gamblers were told that the Fed is looking at ending balance sheet reduction sooner than previously expected. Yet gave no indication of what that means. Steve Liesman gets full credit for exploring that all-important gambling topic to the maximum extent possible. It was the Jedi Mind Trick on level 11.

The good news for gamblers is that if we get another -20% drop in the S&P, the Fed may begin to start to think about laying out a plan to curtail liquidity reduction. And then communicate that at their next meeting. 

Where it gets interesting is that the dollar imploded on news that further global interest rate divergence is no longer in the offing. Just in time to repeat carry trade RISK OFF implosion from last year:



On the subject of extreme denial, the massively over-crowded hedge fund momentum trade tagged the 200 day for the fourth time in four months, as we learned that Apple revenue is now declining year over year. 

The fifth lower high including the September peak:

Getting back to the subject of trade talks, gamblers are just beginning to figure out that if China makes major concessions on trade those will merely hasten the implosion of their economy. If they don't make major concessions that will draw out the trade war and further delay business investment. 

Either way, there IS no upside from this trade war. 

"From the moment Wisconsin struck a deal to pay Foxconn more than $4 billion in taxpayer subsidies to build a plant in the Badger State, critics decried the plan as a total scam that had Donald Trump and Paul Ryan’s fingerprints all over it. And they weren’t wrong!"

"That's not a scam, THIS is a scam"

Speaking of "strong earnings":

"EPS: 17 cents per share vs. 22 cents expected in an analyst survey"

"Look, it's the best rally since the last implosion"

Wednesday, January 30, 2019

Trumptopia Is A Hoax

Somehow we've been trapped in a circus run by the dumbest and most arrogant frauds in human history. Trumptopia is a delusional conspiracy propagated by paranoid denialists. On themselves. Sadly, you can't warn them, because they don't trust anyone who can be trusted...

What we are witnessing in real-time is a corporate Idiocracy self-destructing in every direction - physically, mentally, financially, and of course ecologically. Aided and abetted by human history's largest cabal of soulless corporate Mad Men. Whose only concern is next quarter's profit. Having spent their entire lives in a corporate controlled Disneyland, they are wholly incapable of separating fact from fiction.

Compliments of the cold snap in the Midwest, the climate change denialists have crawled out from under their rocks to remind us that Global Warming is a hoax. Led by their beloved denialist-in-chief:

Leave aside the fact that NONE of these observers are educated in climate science, their expertise lies in disinformation - the Faux News patented skill for picking the denialist raisins out of the factual oatmeal. Any scientific consensus on climate change or anything else for that matter, only serves to confirm "the conspiracy". Which means that climate change is a conspiracy propagated by those of us who choose to believe the planet is dying, because we lack the intelligence to believe in our own instant gratification. As if we're some mad mob who just got conned by the most hollow fraud in human history. 

"climate authorities, including those inside Trump’s government, said the record-setting cold does nothing to contradict the consensus on climate change. According to a tweet Tuesday morning from the National Oceanic and Atmospheric Administration"

It's no surprise that the United States is the only non-signator to the Paris Agreement. Why? Because no country in human history has done more to destroy the global environment than the U.S.

No part of this planet has been untouched by American "exceptionalism". From the decimated Middle East to the squalor in Central America, now generating mass migration North to seek asylum, no part of this planet is untouched by this failed way of life.

The consumption oriented dead end way of life has failed humanity and this planet on a scale that only the creator can comprehend.

The Roger Stone quality false witnesses of today clinging to the shreds of MAGA are the last vestiges of the lies that backed humanity into this blind alley. Nothing will change until there is widespread contrition at the desecration that has taken place in the name of corporate profit.

Which is where this is all heading, because nothing will reduce the global carbon footprint more than unquestioned belief in the criminals and con men who led us to this parlous juncture. For those who constantly assert that we can't "afford" to change this unsustainable way of life, I'll bet everything they own, they can't afford not to. 


Tuesday, January 29, 2019

Donny Or Dog Food: The Last Hurrah

"Then they let it ride on the Casino-Bankrupter-in-Chief"...

Like any all old age home, the expectations bar just keeps getting lower and lower. Until the totally "unexpected" occurs. It's obvious why this cycle can never end, because for a certain demographic there isn't going to be another cycle. Therefore they have to enjoy this one to the Trumptopian fullest...

Speaking of lowering expectations, Wall Street's favourite game is to lower profit estimates ahead of each quarter so that it appears that stocks magically "beat" Wall Street expectations. It's a game of alchemy and deception that apparently never ceases to fool serial dunces. Unfortunately, this time around it has inadvertently concealed the end-of-the-cycle. Overnight, more earning warnings from Whirlpool, 3M, and Lockheed Martin. All ignored by gamblers. 

Speaking of delusion:

"Remember when Deutsche Bank found late last year that 2018 was the worst year for markets since the great depression, with 90% of all assets posting a drop for the year?"

Now, one month after the December devastation, everything has made a drmatic U-turn, and global equities have bounced back violently"

This is a week of critical events: key earnings reports, the Fed tomorrow, and fake trade talks later this week. Recall that last year January was strong, but the beginning of February marked VolPlosion. Specifically, Friday Feb. 2nd was weak and Monday, February 5th was the meltdown. Which means that this year is following an eerily similar trajectory:

Exhibit A of lowered expectations, Apple is "soaring" after hours, having beat their sharply lower expectations set earlier this month. 

Any questions?

Going into tomorrow's FOMC rate decision, there is rampant speculation over what the Fed will say about the balance sheet. Pun intended.

No surprise, it appears the codgers inconveniently forgot why they did it in the first place:

"Some investors blame the stock market’s volatility on the Federal Reserve shrinking its bond portfolio. But the critique puzzles Fed officials and some economists because there is little evidence of turmoil in the two markets where the central bank actively intervened: Treasurys and mortgage debt."

Needless to say, these are not intelligent people in any way shape or form. We are now to believe - via amnesiacs - that Bernankenstein printed $4 trillion in new money just for shits and giggles. And of course there is no sign of turmoil in the Treasury market - the entire point of QE was to bolster RISK markets by forcing investors out of Treasuries into riskier assets. Now of course, that process is going in reverse. 

What gamblers will want to know from tomorrow's meeting is can the Fed get this Ponzi scheme back on track? Because at present the Fed is reducing liquidity at approximately 4x the rate they were reducing it this time last year:

Here we see momentum growth stocks year over year:


German Stocks

"This is the best month ever for stocks"
"I know, bro"

No question, without the Casino-Bankrupter-in-Chief, this shit show would have ended a long time ago.

Monday, January 28, 2019

The Cure For Wealth Inequality: Denialistic Mega Crash

Anyone wondering where the borrowed tax cut and Fed Ponzi money went, can put their mind at ease, it's in the hands of America's bailout class. The decade since 2008 has been spent perfecting Robber-Baron-o-Nomics:

"Goldman Sachs says stock ownership among the 1% and 0.1% has risen, as the gap between rich and poor has widened"

Today, perma-bulltard Cramer finally came to the realization that the cycle is over. In addition to Nvidia, Caterpillar warned today, Intel warned last week, large U.S. banks warned two weeks ago, Apple and Samsung warned earlier this month. 

Even the most ardent denialists are starting to take notice:

"You're going to have a lot of people that immediately say, 'Listen all those stocks that moved last week should not have moved."

This is where it gets interesting.

The casino remains extreme overbought, now clinging to the key support level from December. As we see from the lower pane, each selloff has occurred from a more overbought level. Each selloff has been more extreme than the previous:

Just as it is with Goldman Sachs, GE, Macy's, Sears, Ford - all of these profit warnings have been deemed to be "company specific".

For example, now we learn that in addition to Crypto implosion, Nvidia's core gaming business is rolling over:

"The gaming-card company revealed Monday morning that it will come up about $500 million short of a holiday-season sales forecast that already wildly disappointed investors"

It never once occurs to the denialists that video games are an end-of-cycle play:

Aside from Tech, U.S. Industrials have the most exposure to China.

And hence are now bidless...

"Don't worry, this is GE specific"

The theme of the 2020 election has belatedly become wealth inequality and how best to deal with it. Various tax proposals have all been deemed "socialist". I suggest that the first way to deal with wealth inequality is to stop propping up the fake wealth of the bailout class. 

It's abundantly clear in hindsight that the entire Trump tax cut ended up in the Cayman Islands. Where it joined the $4.5 trillion printed by the Fed to prop up risk assets over the past decade.