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.