In a world run by central bank meth cooks, bad news is good news. Right up until the explosion, that no one sees coming. By way of measuring the current level of coma, today's monetary crack addicts have placed their fate in the hands of two separated-at-birth identical circus clowns. The two Russian-installed fake populists tasked with tearing down the Anglo-American world order. Dumb and dumber...
But, as long as only the factory slaves were suffering, it was "all good":
Notice the difference between now and this time last year. One year ago, U.S. markets were negatively correlated to Emerging Markets. EMs bottomed first in late October, which is why global meltdown was prevented. Don't expect the same happy ending this time around. In the everything bubble, everything is 100% correlated. To the downside.
And the other difference of course is no hedging to buffer the decline this year. The only hedge this year is betting on an imaginary Fed bailout. Hedging went from record high last year, to cycle lows this year. The same way it did in 2008.
But, as long as only the factory slaves were suffering, it was "all good":
Notice the difference between now and this time last year. One year ago, U.S. markets were negatively correlated to Emerging Markets. EMs bottomed first in late October, which is why global meltdown was prevented. Don't expect the same happy ending this time around. In the everything bubble, everything is 100% correlated. To the downside.
And the other difference of course is no hedging to buffer the decline this year. The only hedge this year is betting on an imaginary Fed bailout. Hedging went from record high last year, to cycle lows this year. The same way it did in 2008.
The two nations that built modern Globalization out of the ashes of WWII - Britain and the U.S. - are now the ones doing everything possible to bring it down. Both countries led by charlatan political opportunists who have somehow reinvented themselves as men of the people.
It's fitting that today's rally was compliments of news that a deal to remove the UK from the EU is finally at hand. What started three years ago (July) with a global market crash due to an unexpected Brexit vote, is now a buying opportunity upon the fact. Outside of heroin-lubed Disney markets you can't make this up.
Bearing in mind that the best case scenario, from a markets perspective, is a "new deal" that is far worse for UK trade than what abides today. With that in mind, we see that the dollar-based UK ETF was bid back to a very similar lower high as last October. Again, in dystopia, bad news is good news...
Likewise, it's fitting that the one Tech sector now powering to new all time highs is the one with the most exposure to the trade war, and the worst earnings performance.
"The Information Technology sector is expected to report the second highest (year-over-year) earnings decline of all eleven sectors at -10.2%. At the industry level, four of the six industries are projected to report a decline: Semiconductors (-30%), Technology Hardware (-14%), Electronic Equipment (-9%), and Communications Equipment (-1%)"
We're at the critical turning point wherein the safe havens are now getting sold and the most exposed junk is getting squeezed higher by short-covering. Which is providing temporary illusional support. See chart above.
Here we see Utility stocks rolling over with the Dow in the background, tracing out three lower highs deja vu of last year:
IPO junk is "rallying" three wave corrective. Prior to final collapse.
In other words, everything in the everything bubble is rolling over at the same time. With the final result being the eagerly sought collapse of Globalization.
In summary, to believe in the status quo, which is being actively disintegrated in real-time, you have to be smoking monetary crack while free-basing Trump's bullshit. Believing that the next bad headline will bring the next shipment.
"It's about damn time"
