Everybody Plays The Fool

This post-2008 mega bubble has lasted just long enough to make everyone look stupid - bulls and bears alike. The inevitable consequence of Japanification gone global - to believe in financial Disney World, or to bet against the 7 billion people who do. Today's Madoff-inspired policy-makers have given no thought as to what fragments of public trust will remain, when this experiment final explodes. In the meantime, plausible deniability is the opiate of the profoundly stoned masses...

What a fool believes he sees

No wise man has the power to reason away

What seems to be

Is always better than nothing

I had to jump my usual format of rambling tirade to timestamp this madness for posterity. No archaeologist will believe this insanity, without proof.

The power of the Financial Services crime syndicate over all aspects of this society, is overwhelming. Today's musical chairs dancing pundits need to keep this party going by all means possible. 

The article attempts to explain that the derogatory term "bubble" is being over-used to deride perfectly legitimate Ponzi schemes. Then it cops out completely by saying that bubbles are only ever visible in hindsight: The Nassim Taleb "Black Swan" argument that gave creative license to package subprime garbage into AAA-rated bonds, so Wall Street could claim "no one saw it coming". And every duped idiot would gladly believe them. 

Fortunately, my definition of a bubble is far more simplistic and indefensible: Any time one is buying an asset that has no intrinsic value, simply because other fools are buying it, that is a bubble. Say for example a stock market inflated by central bank printed money, and debt-fueled stock buybacks, when corporate credit is at record highs as % of GDP, amid collapsing economic fundamentals and record insider selling. 

"CNBC’s Jim Cramer says he expects most companies to post weaker earnings than they did last quarter.
“I literally do not have a company that is having a better quarter,” Cramer says.
But against that backdrop, the Dow opened less than 1% away from its record close. The S&P 500 on Thursday closed at an all-time high."


Which gets us to a selection of my most bearish charts that are strangely visible before-the-fact:

The Dow is now approaching the October 2018 closing daily high, which perfects the broadening top on the weekly view.

As we see, short-term rates took another leg down this week. RSI (top pane) was multi-decade overbought in January 2018:

Global Dow and Vol:

Average stock and vol:

"Safe havens"

Breadth:

World versus U.S.:

Bonds versus stocks. Not everyone gets to be right in the end. 

"If reading financial markets is usually as inscrutable as reading tea leaves, bond investors have decided now is the time to send a message in big, bold letters"

Meanwhile, the expectation of more stimulus has helped push stock markets close to record highs"

"No one was allowed to see it coming"