There's No Such Thing As A Fucking "Consumer"

To the surprise of EconoDunces everywhere, jobless consumers are not benefiting from low oil prices, which is a problem because we're at the end of another "demand" cycle...

Demand for gasoline was higher in 2007 when oil was running up to $150, than it is now with oil at $33...of course, the Bush bubble all collapsed overnight like a cheap tent, taking oil down with it. The seven year Obama delusion will be no different, with oil starting at $30/barrel rather than $150...

U.S. gasoline demand (red) with oil price:
https://www.eia.gov/petroleum/weekly/

The concept of the "consumer" was invented so that EconoDunces could give their approval to *Free trade* deals, as in "consumers" will benefit when the economy is outsourced. All of which asinine chicanery merely bolstered short-term corporate profits at the expense of long-term economic depression.

To see what I mean, above is gasoline demand (red) with oil price. This is a lesson in "elasticity of demand" or lack thereof. In the 2007 cycle, demand for gasoline was positively correlated to the price of oil, because the economy was more robust (albeit still fake), than it is in this cycle. Since 2008, elasticity of demand has kicked back in and demand is now inverse to price. However, inelastic price demand as exhibited in 2007 makes sense in the context of a robust economy wherein people have jobs to get to, whereas, price aversion makes sense only in a slack economy. 

All of which means that this will be the TOP in oil price for years and years...

Generation Madoff

There wasn't just one Bernie Madoff, there's an entire generation of Madoffs...

What happens when a lucky billunaire compounds his fake wealth during the longest expansion in U.S. history, compliments of a reserve currency - Now propped up by ponzi borrowing, .25% interest rates, and money printing?

"The babies being born in America today are the luckiest crop in history," declared Buffett, one of the world's wealthiest men with an estimated net worth in excess of $60 billion."

"U.S. citizens are not intrinsically more intelligent today, nor do they work harder than did Americans in 1930. Rather, they work far more efficiently and thereby produce far more. This all-powerful trend is certain to continue: America's economic magic remains alive and well."


"I Have A Lower Tax Rate Than My Secretary"

"I come by my wealth honestly - mass outsourcing, stock buybacks, government ponzi borrowing, bailouts, and Fed money printing"

Berkshire with Fed balance sheet

"Good news, we're so efficient we no longer need jobs"

2016: Year Of Shocking The Hairless Monkey

"You've got to shock the monkey..."

"Our currency is stable. It goes down the same amount every day"

"Our 'Conomy is the strongest in the world. We borrowed our way out of 2008 and we printed the most money. Anyone who wants to peddle fiction should see me for instructions"

ZH: Dec. 31, 2014
Hedge Fund Manager Drinks The Kool-Aid
"There are times when an investor has no choice but to behave as though he believes in things that don't necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully"

"today's central bankers are spinning a falsehood of recovery"

France CAC w/S&P:
One of these demonstrates the realities of Globalization. The other one demonstrates the power of imagined realities. Regardless, they always converge at the bottom...

France CAC w/German DAX:

France CAC with Nikkei

France CAC with Aussie All Ordinaries:

UK FTSE
"Game over, man"

"This Is Not 2008". It Just Looks Like It...

"This time they chose to ignore all of the identical warnings signs and just pretended it wasn't happening again. Because everyone knows that borrowing more money always fixes a debt crisis. They were 100% Idiocracy, no fucking around"

Financials are leading this week's G20 "bounce" aka. "More dopium please"

U.S.:

Global:

Deutsche Bank:

Appetite For Self-Destruction

Consumption sentiment (Social Mood) (red) follows real estate or vice versa. Both peaked over a year ago...

Stocks follow consumption sentiment with a lag, and no doubt a feedback loop aka. "sumamabitch!!!"

Below, I measure market risk aversion using the Treasury/VIX ratio. Both instruments are "RISK OFF", but Treasuries outperform in bull markets whereas volatility outperforms in bear markets. Four week volatility is outperforming Treasuries right now. This will be the last dip that gets bought, after this, volatility will outperform everything...

Four week moving average:

Inverse VIX:

Recession stocks:

Recession stocks with USB/VIX ratio:

"Our pattern recognition software has identified another buying opportunity

Waterfall Crash: Base Case Scenario

ZH: Feb. 25, 2016

Taking Back the 50 DMA (Today) Was Crucial To Bull Case

This is either August all over again (higher) or 1929/1987, lower. Why waterfall crash lower? Because JP Morgan put out the call to short 1950 which Team Groupthink did en masse up to 1945, and then got hammered during the past two day short squeeze. In other words, they're ALL IN...

Let the charts decide...

My overall take is that this "rally" is all about short-covering and recession stocks. In other words, we've seen this movie before...

Casinos and consumer staples:

Double death cross: We've never seen this before...

6 month overbought:

NYSE McClellan Oscillator

Back into heavy resistance...

Index call/put ratio: someone is out over their skis...

Exxon Faces First Downgrade In 90 Years

"The outlook for Exxon, which has held Moody’s top Aaa rating for more than 90 years, dropped to negative from stable, the rating company said in a statement on Thursday. "

"Seven of the other largest U.S. energy explorers also were put on notice or downgraded by Moody’s Thursday after the rating company concluded crude prices will remain weak for years. The Moody’s review featured a Who’s Who of American oil and gas heavyweights, from Chevron Corp. to Marathon Oil Corp. to ConocoPhillips."

"Exxon...has annual revenues that dwarf the economies of most of the nations in which it operates." 

Exxon/Energy ratio:

Exxon/WTI ratio:

The Nature of Extrapolation aka. "Denial"

People are not "prepared" for this to all end, so they assume that it won't. The people who have the most invested in this shit show are the ones busily destroying it. Selling it for special dividends. The irony can't be overlooked.

The Borg IS the illusion...

I had hoped that more people would see this coming, but I'm realizing that in order for this all to end, the vast majority can't see it coming...The Baby Boomers are like a 747 trying to land on an aircraft carrier in heavy seas. They've already made two unsuccessful passes and this next one has to stick. The hippies of the '60s agitating for civil rights, have morphed into cynical reactionaries, fretting over 401k balances. Back in the 1990s there were predictions that the stock market would crash when the Boomers all tried to retire at the same time. People scoffed at the idea, and came up with myriad "reasons" why that wouldn't happen. Turns out they were right. The foundation is already gone, only the facade of the Dow still stands thanks to money printing. Like the Berlin Wall circa 1989, this is the Potemkin stock market - as fake as the people who throw their money into it, straight to the Caymans. 

The number of people who will see this coming is statistically non-existent. They're bought in and sold out to the indefinite status quo...

People make plans. They invest. They borrow too much money. They wed themselves to the status quo. They've chained themselves to the Titanic. I started this blog at the height of the housing crisis, and then tracked that asinine insanity to the days after Lehman. So this is all just deja vu. It's literally an absolute repeat EXCEPT, instead of banks failing, now entire nations are failing (China, Brazil, Greece, Japan, [insert any country here]).

AND, the other big difference of course was the colossal short that Wall Street had put on subprime and on the rest of Wall Street. Lehman failed because the other brokers made it fail. They shorted the fuck out of it and then pulled their money. Ironically, that Big Short meant that there was more clarity on what was taking place at the time. There were no headlines saying buy these 5 stocks right now. There was none of that bullshit. Today, we have alternating headlines saying this is 1929 and others saying this is the best time to buy stocks. There is no consensus on anything. 

It's called conflict of interest. Wall Street doesn't get paid to sit in cash. And then there's survivor bias, meaning the funds that already failed are gone. They are not part of the discussion, they no longer exist. We only hear from the successful ones that have miraculously navigated this shit show - not from the 674 hedge funds that closed last year. Going out with a whimper. 

Most ironically from an historical standpoint, the people who have the most invested in this shit show are the ones eating its seed corn. They still don't realize that they are the ones destroying the status quo, and selling it for special dividends. Their fake ponzi wealth grows in inverse proportion to the rate of collapse. They want *more*, so they destroy more. We have no part in this, other than to stand on the sidelines marvelling at how efficiently they're self-destructing. We could only get in the way. 

So the handful of us who don't believe in bankrupting grandchildren while destroying the planet, are on our own. Because we're surrounded by desperate denialists who've welded themselves to the hull of the Titanic: financially, emotionally, mentally, and in every other respect. They can't imagine a world without shopping malls. 

So they don't.  

"This Wasn't Supposed To Happen"

What happens when you mix Faux News with South Park? You get Camacho as President...All of a sudden dumbing down the populace and treating them like disposable batteries, isn't as funny as it used to be...

In the movie Idiocracy, a professional wrestler buffoon becomes President...

Trump learned how to relate to his 'Base' which he calls the "poorly educated", from his stint in WWE. No, you can't make this shit up...

I can guarantee you that the Republican establishment is praying that Hillary Clinton aka. Bush III,  is the next President. Because Justin Bieber Rubio is no match for the new Camacho...All of a sudden no one's talking about "Benghazi" anymore. Corrupt tools. 

Trump said all of these things...

1. “Remember, new ‘environment friendly’ light bulbs can cause cancer.”

2. “I will be the greatest jobs president that God ever created, I tell you that.”

3. “I will build a great wall — and nobody builds walls better than me, believe me.”

4. “I beat China all the time. All the time.”

5. “If there is one word to describe Atlantic City, it’s Big Business. Or two words — Big Business.”

6. “Listen, you motherfuckers, we’re going to tax you 25 percent!”

7. “This very expensive GLOBAL WARMING bullshit has got to stop.”

8. “Sorry losers and haters, but my IQ is one of the highest — and you all know it!”

9. “So you’re smart, huh? I thought your head would be bigger. Looks like a peanut!”

Trump to Rand Paul: "I never attacked you on your looks, but there's plenty of subject matter to work with"

On Mexicans entering the country:
‘They’re rapists. And some, I assume, are good people.’

Trump re: Carly Fiorina:
"Look at that face!"

Trump re: Megyn Kelly:
"She has blood coming out of her whatever"

Trump re: Angela Merkel:
"I told you they would never pick me for person of the year, instead they pick the person who is ruining Germany"

The Back Wall of The Hurricane

The front wall of the hurricane weakens the Ponzi scheme, the back wall obliterates it...

Casinos with consumer staples
Short-covering and recession stocks...

Consumer staples / S&P ratio:

Nice overthrow...the reversal will be a bitch...

I think we all see where I'm going with this...