Wednesday, January 1, 2020

Fool Me All The Time, Shame On Me

Trump is the Bernie Madoff of this era. Nothing more, nothing less. The only difference is that everyone knows in advance that Trump is a con man. This time there is NO excuse...

Apparently when this became the longest bull market in U.S. history, that's all it took to convince everyone this would go on forever. Because prior to Trump's non-stop bullshit, they had their doubts. Today marks two decades of asset bubbles and crashes. Yet somehow the same morons keep getting fooled by the same psychopaths. This time with help from a renowned expert at bilking casino gamblers. Because they couldn't do it without him...

"We need Trump this time"

What history will say about the decade of bailouts for the ultra-wealthy:

Seven years of maximum monetary stimulus. Implosion (2016). Two years of maximum fiscal stimulus. Implosion (2018). And for the grand finale, one year of ($2 trillion) combined fiscal and monetary stimulus (~10% of GDP). 

No one saw it coming.

Today's Bernie Madoff acolytes at central banks and the financial services crime syndicate have herded this society off a cliff. Over the past several decades, corporations found ever-new and "innovative" ways to maximize profit at the economy's expense. Cannibalizing the economy to make the quarter, while using debt to backfill the demand crater. A relentless middle class strip mining operation that has led to greater and greater deflation and lower and lower interest rates. Having dispensed with real pensions, companies found a new and creative way to generate simulated retirement - 401k retirement savings plans to expedite the final transfer of middle class wealth to ultra-wealthy corporate insiders cashing out. In conjunction with corporate-funded stock buybacks to give the illusion of profit growth. When in fact aggregate profits haven't grown for years.

Aggregate pre-tax profits peaked five years ago:

This entire fraud, happily propagated by the media via the Dow Jones Illusional Average - which in no way represents the average stock - has done a fantastic job of concealing the damage to the underlying economy. Now featuring a U.S. stock market "at all time highs" excluding ALL of the economically cyclical industries: Banks, homebuilders, transports, autos, industrials (ex-defense), energy, retail, construction. None at all time highs.

This has never happened before in U.S. history. A one year+ Dow Theory divergence:

It's the "miracle of indexing", we are told. The idea that a handful of stocks bid up to unprecedented valuations can continue elevating the permanent plateau while everything else implodes in real time.

We have been told this same fairy tale three times in the past two decades. Each time, the exact same morons believe it.

All this to say that social mood will be the final arbiter of this con job, when greed turns to fear on its way to panic and stained underwear.

Bonus is in the bank, it's time for real selling.

Here we see $USDJPY carry on the verge of risk off for only the second time in a year. Aligning with the global third wave down.

Recall one year ago this week, $USDJPY flash crashed at the end of wave '1' down. 

Leaving this much of the market behind is recipe for wholesale collapse without a safety net:

As it was in 2008, rails are outperforming trucks. For now...