Tuesday, December 24, 2019

ALL IN On Donny. ALL IN On Fraud.

Trump's Christmas present to his base was a biblical con job. History will say that Trump was merely a fake-populist rendition of the GOP tradition - strip mine the poor, give to the rich. Cloaked in racism to cement loyalty from the alt-Christian base. MAGA is the rise and fall of the Super Idiocracy...

In 2018, Trump's tax theft exploded spectacularly. 2019 has been the year of the Fed bailout, which is rigged to explode FAR MORE spectacularly. As always in the Idiocracy, the burden of truth is on the truth, because lying about the economy is the order of the day. Right now, you won't find ANY right-wing outlet telling the truth about the economy, because they don't want to negatively impact the "existential" election. And, otherwise lose their entire subscriber base. Lying to win the election has created a huge blind spot at the end of the cycle:

Exactly one year ago today, the S&P was down -20% peak to trough, as Trump's inter-generational tax theft exploded in his face. The tax cut failed because it was targeted almost entirely to the ultra-wealthy. Direct deposited into offshore bank accounts. Meanwhile, the chasmic deficit raised borrowing costs for the middle class. The end result was a deflationary tax cut requiring a Fed bailout. Therefore one year ago, Trump picked up the phone and called Santa Powell, DEMANDING a bailout. Then he jumped on Twitter and said "BTFD".

The 2019 Fed bailout of course was ALSO targeted at the ultra-wealthy. Because the only thing that was "reflated" in this past year was asset values. NONE of the Fed-printed money was targeted at the middle class. The net result has been to drive a CHASMIC gap between the stock market and the economy. 2019 has recorded cycle LOW GDP growth. 

Taking the two years together, the Fed is now monetizing Trump's tax cut for the rich, while the economy languishes.

It's no secret that the economy was weak in 2019, but it was mostly weak for the middle class and lower so the business media never took notice.

2019 featured record store closures:

Since MAGA, the obliteration has been at the lower end of retail:

In summary, repeat after me:

"'Conomy is strong"

Throwing their fellow citizens under the bus is a way of life for these people, which is why they don't see it coming. 

For the gambling class, the stock market IS the economy now. Which is why record amounts of money are now betting that Fed-sponsored tax cuts, will keep asset values levitating forever. As we see below from 2008, this is a fool's bet. The largest balance sheet expansion in history could not prevent meltdown.

Nevertheless, this view that printed money is the secret to effortless wealth is the consensus among money managers:

"...The Fed balance sheet will be at, or close to, an all-time high in 2020. Quantitative easing is like printing money — but for financial institutions only — and this inflates the prices of both stocks and bonds."

And what can be better than inflated asset prices, not connected to anything real?

Effortless wealth

As we see from the wave count below based upon the Value Line Geometric Average, 2019 was a bogus rally. Predicated solely upon Fed money printing. The majority of stocks and sectors NEVER confirmed the all time highs in the cap-weighted indices. 

What gamblers bought in 2019 was a bear market ex-Tech, and a recession ex-deficit.

"The strength in long-term internal trends not only signifies an improving market but helps build a more sustainable backdrop as levels of technical support strengthen and multiply, creating more reasons to buy dips"

"Although at least one expert believes the market is currently in a “silly season”, others believe that equity indexes could continue to climb higher into next year, despite lackluster corporate earnings."

While the percentage of companies in the S&P 500 index trading above their 200-day moving average has climbed to the highest level in nearly two years, further gains could be ahead"

The important thing one year later, is that it "worked". 

The most successful con job in U.S. history:

Which is why the gap between fantasy and reality has never been wider: