Today's ubiquitous salesmen who believe that it's the CEO's job to project confidence through thick and thin are about to pay a heavy price for that belief:
This month marks the third anniversary of Trump's famous prediction that the Fed's "big, fat, ugly bubble" was primed to explode. Subsequently, he made it far larger and then somehow convinced the masses at large to go ALL IN. Now he spends every day blaming the Fed for not making his bubble even bigger. No one believes in the magic of printed money more than the first mentally challenged president:
Trump's entire business career prior to his resurrection as Reality TV business mogul can be summarized as over-promising and under-delivering. The misallocation and subsequent obliteration of other people's capital based solely upon buffoonish over-confidence.
Nothing has changed. Trump's ability to move markets is solely due to his gift for convincing people to believe things that are totally untrue. This is by far the biggest and most obvious Econ job in human history. Only because hedge funds are now getting obliterated on their short bets is the casino still lingering at all time highs:
The other factor driving stocks this week was yet another fake trade truce ahead of the October trade meetings:
This has been a two year topping process in broad daylight. Global stocks peaked 18 months ago. Oil peaked a year ago. The average U.S. stock peaked one year ago this month. New S&P highs peaked 18 months ago. You have to be smoking crack or selling stocks on Wall Street not to see this coming.
Speaking of which, the operating hypothesis generating rampant complacency on Wall Street, per JP Morgan (Kolanovic) and other pundits, is that because "positioning is the lowest since 2009", stocks must move higher. Which is a load of bullshit of course. What they appear to forget is that there has been a quantum sea change in how money is allocated to stocks over the past decade. Due to the rise of passive investing, gamblers are now throwing money at the slot machine without regard to the economy, valuations, global risks, technicals, liquidity, or anything else that matters.
Like everything else in this society, the casino is on zombie auto-pilot mode:
“It’s kind of a set it and forget it kind of thing.”
"Michael Burry, hero of Michael Lewis’s book “The Big Short,” warned last week that passive fund inflows are inflating a new stock and bond bubble that is bound to blow up as money linked to fund indexes exceeds amounts traded in individual stocks."
Speaking of which, the operating hypothesis generating rampant complacency on Wall Street, per JP Morgan (Kolanovic) and other pundits, is that because "positioning is the lowest since 2009", stocks must move higher. Which is a load of bullshit of course. What they appear to forget is that there has been a quantum sea change in how money is allocated to stocks over the past decade. Due to the rise of passive investing, gamblers are now throwing money at the slot machine without regard to the economy, valuations, global risks, technicals, liquidity, or anything else that matters.
Like everything else in this society, the casino is on zombie auto-pilot mode:
“It’s kind of a set it and forget it kind of thing.”
"Michael Burry, hero of Michael Lewis’s book “The Big Short,” warned last week that passive fund inflows are inflating a new stock and bond bubble that is bound to blow up as money linked to fund indexes exceeds amounts traded in individual stocks."
The S&P and the Dow both exhibit a broadening top. Which means a "megaphone" topping pattern exhibiting ever greater volatility as the range expands. As we see from the lower pane, the volatility pattern is similar to 2007/2008, and is of the same duration. The final spike of course began in September 2008 with the Lehman bankruptcy.
The Dow Transports never confirmed the Dow's all time high set in July this year. Another widely ignored barometer of risk:
Here we see the two year topping process via the IBD 50. These are the fastest growing public companies in the United States:
One year ago the average U.S. stock made new highs. This is the third lower high in the past year:
"More and different stocks are participating in the market’s run to new highs, and that is a positive sign that the move higher is being built on a broader foundation."
A broader foundation of lies:
"More and different stocks are participating in the market’s run to new highs, and that is a positive sign that the move higher is being built on a broader foundation."
A broader foundation of lies:
The entire Financial sector has been underperforming, having peaked 18 months ago. Ironically, Financial Asset Managers have been the weakest.
These are the people right now telling their clients that new stock market highs are imminent. Only by focusing solely on the Dow and S&P 500 and ignoring EVERYTHING else, could they reach that conclusion:
