Sunday, December 29, 2019

Fairy Tales of Infinite Simulated Growth

History will show that the Trump tax cut drove two self-imploding melt-ups - each one bookending the two year market top. Why? Because there is no such thing as free money. Today's casino class only believes in the conjoining of fiscal and monetary policy when it's used to create record asset bubbles. When used for any other purpose, it's clearly "socialism"...

The IBD 50 best shows the two year top

These are the fastest growing companies listed on U.S. markets, with respect to real earnings:

Previously I showed asset allocation via the equity call/put ratio and the Rydex bull / bear ratio. Both now exceed the early 2018 melt-up. Recent VIX short positioning (not updated this week, due to the holiday), also exceeds Jan. '18. 

Which means that the magnitude of risk-seeking exceeds the early 2018 melt-up, and is focused on the riskiest stocks. Revenueless Biotech stocks are back at 2015 highs:

Within semiconductors, AMD's run is reminiscent of last October:

Contrary to popular belief, global risk assets are still far below their two year old high, in U.S. dollars.

2019 is the inverse of 2018 - the melt-up in 2018 came at the beginning of the year, whereas the melt-up now is coming at the end of the year:

Oil is trending lower:

Tesla exhibits the power of short-covering

To be clear, it's not Trump who is to blame for this epic con job. 

After all, he didn't elect himself.