Ponzi World (Over 3 Billion NOT Served)

The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.

Saturday, January 30, 2016

On The Turning Away: The Last Temptation of the Idiocracy

We're surrounded by natural born deceivers, Globalization's main export. Sociopaths who will say anything to keep this shit show going, one, more day. Being honest was never an option for the human bulldozers...

"Great news, no economy"

The people at the top are the only voices that are heard, the people monetized by Globalization, don't exist. The role of survivor bias in this lurching cluster can't be overstated. The media exists in a bubble of fake optimism funded by capital which continually moves to ever-higher ground as the flood waters rise. Billy Gates tells us the "World has never been better" because his wealth is indexed to Central Bank balance sheets. He is "protected" by the Davos-connected Central Planning for Billunaires country club. The fate of the rest of humanity is of no concern to someone who makes every minute what most people make in a year, decade, lifetime...

Nevertheless, this aura of fake invincibility has an aura of fetid inevitability. If the Central Banksters are infallible, then why are so many markets already in bear territory?

Jan. 21, 2016:

Why? Because the only way this could end is if the Bernie Madoffs at the top couldn't see it coming. Madoff didn't see it coming, they don't see it coming. This is not 2008's Big Short, this is The Big Long. We are all being tempted to bind our fate 100% to Third World poverty which is now flooding the planet...Negative interest rates are just a bigger noose.

China:

Hang Seng (Hong Kong):

Canadian stocks:

Amazon and Netflix are coming in for hard landings, Facebook and Google are on deck...

Japan Nikkei

To believe the deceivers, the world was just "saved" by Japan...

Because Japan's main export for 25 years has been fake optimism...

All Aboard. Aye.

The red line is the ISE Call/Put ratio (5 dma). It measures the desire of gamblers to get monkey hammered. Again. It's almost back to the wave 2 top in risk seeking.

Thanks BOJ!!!

The 2014 Maginot Line was defended for the fourth time in two years.

At all costs...

This looks better...

Inverse volatility confirms the count...

Nasdaq 100 and oil 94% downside correlation...

Most shorted aka. "Frackers"
Up 30% in 6 days...

Jan. 30, 2016
Barron's: Five Tech Bargains to Buy now:
The economy's weakening, so double down on Western digital:

Exxon

Exxon long-term:

Apple

Aussie / Yen aka. Carry trades...
aka. Overnight risk (Aussies call it day risk):

The Big Long 2016: Betting It All On Central Banks

"It was history's biggest bull shit market"

To summarize the past week/month:
Everything risk rolled over, except Facebook, Skynet, McDonald's and Philip Morris. Even gun stocks and brewers fell for the month. Consumer staples outperformed. Treasuries were well bid into the end of the month. Shorts covered on news that the economy is deteriorating at an accelerating pace...

We've seen this movie before:

The biggest near term risks are China continuing to meltdown and the implosion of the Energy sector which is not priced for $33 oil. "No one" saw oil at this level for any length of time, and now profit expectations are WAY out of alignment with reality.

As a sector, Energy has negative earnings so it has an infinite valuation.

Oil stocks as a ratio of oil:

All of which is to say that Energy stocks are about to get liquidated in size, because they are no longer accretive to portfolios...

Energy stocks with Emerging Markets:

The past week/month (Continued):

Corporate profits and revenue continued to deteriorate for the 4th quarter and forward outlooks

The U.S. economy slowed in the 4th quarter

The Fed admitted the economy slowed and paused rates at .25%

Global Central banks coordinated a massive short squeeze

Oil had a dead cat bounce on colossal volume

Chinese stocks continued to fall, hitting a new 52 week low

Apple got shellacked on weak revenue outlook

Amazon and Netflix rolled over hard. Facebook went parabolic

Biotech got obliterated, now down -44% from the highs

Financials were also extremely weak sector due to contagion concerns and yield curve flattening

Brokers sold off hard as Days Average Trades fell.

Stocks posted the worst January since 2009

Stocks and oil traded at a 95% correlation, highest in 26 years

U.S. oil inventories reached an all time high

New highs-lows hit the lowest level since Lehman (last week)

Friday, January 29, 2016

Terminal Idiocracy: "Great News, No Economy"

The stock market had its best week since August on news that the economy is slowing and the Fed is on hold forever. Gamblers took the opportunity to double down on Facebook and shorts covered on the news. The Big Four Central Banks encouraged them to buy with both hands...

According to Factset, earnings for this current quarter only one month underway, have deteriorated 5% in one month. Which is faster than the one-year, five-year and 10-year averages. In other words, company's are announcing fourth quarter earnings and guiding down forward guidance...

Above Average Drop in S&P 500 EPS Estimate for Q1'16 to Date

I drew this neckline two weeks ago...

Ditto

Yen/S&P

Treasuries were bid all week (yields fell), only one will be right in the end, and it won't be stocks. Again...

The Obliteration Phase: "More Pain Please"

Despite massive accumulated technical damage to the average stock, there has been no panic, even when reaching and exceeding the August lows. For three reasons, one: because computers don't panic and most trading now is done by computers. Two, because unlike August, the recent sell-off was slow and controlled, not 1,000 Dow points at the open. Three, the most obvious reason - because of the perma-stoned zombies who are in denial of literally everything falling apart in broad daylight. Therefore, the pain threshold has been increased, meaning the level of damage incurred will be "significant and irreversible" by the time panic sets in...

In the meantime, having started my career as a programmer, I recognize recursion when I see it. This particular program is how Skynet ignites a short-covering rally - by moon launching the S&P futures at the open every day, to see who will shit their pants...

NYSE Intraday Advance-Decline line. If futures were not gap up open, breadth would not keep making a series of higher lows...and yes the downside gap from two weeks ago just got filled...

We've seen this movie before. We know how it ends:

Momentum is back to overbought:

Skynet working overtime
Momentum ignition visualized:
Predicted two massive sell-offs. I wonder what will happen next?
This is standard deviation of the NY Advance-Decline:

Exceptional Morons: The End Of CasinoNomics By Harvard

Central Banksters conned gamblers into throwing their life savings away, while the economy was outsourced for special dividends...

35 year trade deficits can't be papered over with Fiscal and Monetary policy. Trade deficits equal debt. There's no such thing as *free* trade or a free lunch, something today's EconoDunces will learn the hard way. Keynes' biggest mistake was not predicting there would be so many idiots in the future...

Once the post-WWII dividend was spent by the late 1960s, the writing was on the wall - accept a lower standard of living for EVERYONE, or go off the gold standard and create a debt-based Ponzi scheme to the benefit of ever-fewer people. We know which path was taken...

Current account = capital account
U.S. Federal debt with balance of trade:

Post-2008, Monetary policy had no effect on the real economy, because the debt level was too high and therefore the velocity of money kept falling. All of the money went into the Dow casino

Fed balance sheet with velocity of money...

The Fed and global Central Banks encouraged speculation on a level that eclipsed Y2K and 2007, via tens of trillions in Monetary stimulus

Rydex asset allocation:

The Fed is attempting the impossible - to normalize interest rates while global risk is coming off and while there's no underlying economy to support current asset valuations...

1 Year Treasuries w/52 week range of average stock. Prior to now, the Fed has always been in liquidity expansion mode when stocks were this weak...

The Bank of Japan's latest attempts to reignite the animal spirits, are so far not working...except for Facebook...

Nasdaq 100 with JPY:

Global Risk is OFF, and gamblers are stranded...

As long as Facebook doesn't roll over, this will all be fine...

Global Collapse @ "Strong Buy": Obliterated By Groupthink

"As Goes January, So Goes The Year"
"the direction of January's trading (gain/loss for the month) has predicted the course of the rest of the year 75% of the time."