Fireworks Are Coming To The Magic Kingdom

The conjoining of Trump's Disney World with Central Bank sponsored Disney Markets is denialistic paradise for the generation that wants it all "to just go away". The ultimate vacation from reality and responsibility. After the George W. Bush corruption racket imploded, it took eight years, and the coming and going of a Kenyan Commie, to make them true believers in grand larceny again. 

Now doubled down on Forrest Trump, expert in managing casinos into the ground

Recall, last month's jobs implosion launched this orgy of denialistic speculation:

This Friday is the next jobs report. Bulls are praying for more job losses this time around. Amid collapsing global growth and escalating trade wars, there is no longer any cogent fundamental nor technical argument for owning stocks now.

The last great bullish argument is that collapse is "great for my portfolio". Considered in the context of record stock buybacks, the incipient profit collapse is far worse than advertised, due to record smoke and mirrors. 

“We’re so focused on money printing and this mythical China deal that we just don’t seem to be paying attention to earnings"

Speaking of smoke and mirrors, I've said many times, that when the stoned masses wake up to the fact that the U.S. headline employment number is the biggest lie ever sold, the streets will light up like the Fourth of July. The only reason unemployment is at a "fifty year low" is because so many people have left the workforce, due to "early retirement".

Here we see the official unemployment rate (U3) in blue, with the age 25-54 labor participation rate in red. For obvious reasons, these two data series used to be inversely correlated - higher labor participation equated to lower unemployment. However, in this past cycle, as labor participation fell, so did official "unemployment". Only an economist or a fool would believe that unemployment goes down when fewer people are working:

One of the unintended consequences of rate cut fever is that everything pertaining to the real economy has lost its bid.

Meanwhile, it appears that the post-2009 "stress test" has been relaxed somewhat:

"A dozen of the nation’s largest lenders said they will boost payouts through dividends and stock buybacks 18% to more than $173 billion, a record for the group."

 A decade after the annual tests were introduced, the exercise no longer appears to invoke as much anxiety for the industry"

The results were a particular win for Deutsche Bank AG after it repeatedly failed past exams."


"You seem to have cleaned up your act, now is a good time to pay out your excess capital"

BI: Record Stock Buybacks In 2019:
"Financials have been the biggest contributors to the total buyback landscape so far this year with 35% of all share repurchases, BAML found"

On the topic of cyclicals, the OPEC "deal" extension agreed upon yesterday is already turning into a pumpkin.

“It was the bare minimum OPEC could agree on in order to prevent a major meltdown in prices"

Or not.

The Bitcoin "safe haven" bubble is also imploding, just as gamblers get comfortable with maximum leverage aka. maximum margin calls:

The IPO bubble is next in line:

In summary, the groupthink U.S. "TINA" trade is extremely crowded. Within the U.S. market, the "low volatility" recession trade is ultra-crowded. Meanwhile, economic cyclicals are bidless. Clear sign of good things to come. 

CNBC: U.S. Gains Will Accelerate In The Second Half, While Rest of the World Collapses

"From the 1960s, the yield curve indicator has been reliable in terms of foretelling a recession, and also importantly, it has not given any false signals yet."


Still, many economic forecasters do not see a recession on the horizon"



"You never told me bad news is bad news"
"I was predicting a large bonus on the horizon"