The gap between economic fantasy and reality has never been wider. Which proves that the Commander-In-Thief has done his job. Now no one can stop human history's best lubricated circle jerk of like-minded dunces. Last week's Senate impeachment acquittal has sent fake confidence soaring into the stratosphere...
Over on Zerohedge, a handful of their thousand alt-writers have attempted to raise the red flag on casino risk, in between UFO sightings. I give them a C- on the bearish scale and an A+ on the Circle Jerk scale. Half-assed depictions of risk that assiduously avoid pointing fingers at their beloved con man. Ensuring that he takes none of the blame for this epic delusion. After all, this is an existential election in November, with epic greed and corruption now at stake. Suffice to say, they've done nothing to slow the pace of the frenetic GOP circle jerk.
Sadly, the milquetoast bears are constantly being contradicted by their beloved Herbert Hoover who is continually seeking new ways to increase the magnitude of the super bubble. Using what else but more borrowed money:
Sadly, the milquetoast bears are constantly being contradicted by their beloved Herbert Hoover who is continually seeking new ways to increase the magnitude of the super bubble. Using what else but more borrowed money:
Which is why, despite the fact that World economic uncertainty is now at record highs, the stock market is now positively correlated with global implosion. Central banks have increased gambler lubrication inline with global meltdown.
Bear in mind this is through the fourth quarter of 2019, and does not include Corona risk.
"The World Uncertainty Index is a new measure that tracks uncertainty across the globe by text mining the country reports of the Economist Intelligence Unit"
Meanwhile, we learned that the U.S. budget deficit is blowing out to record highs as the economy slows. All of that new debt issuance heading straight for the Cayman Islands via Trump's tax cut. Which is why Trump is now talking about cutting Social Security and Medicare. There's only so much money to go around.
"I stand by our comments that the tax cuts will pay for themselves," Treasury Secretary Steve Mnuchin said at a congressional hearing on Wednesday. "This will be simple math."
We have been told the same blatant lies for forty years straight. Ever since Supply Side economist Arthur Laffer concocted the "Laffer Curve" claiming that tax cuts pay for themselves. The center-piece of Reagan's economic budget. In the event Reagan TRIPLED the U.S. debt in one decade and converted the U.S. from human history's largest creditor nation to history's largest debtor nation. As tax rates approach the zero bound, it becomes mathematically impossible for GDP growth to offset the reduced tax flows. After all, 0% of infinity is zero. The only GDP "growth" comes from the stimulus impact of the rising debt aka. Borrowed GDP.
Here we see that under Trump, corporate tax receipts have collapsed on a nominal basis down to 25 year lows. On an inflation adjusted basis these are at Depression levels:
Worse yet, GDP growth is stalling despite the widening deficit. 5% of stolen money to barely achieve 2% growth. A recession at any other time in U.S. history, when honest men prevailed.
Here we see GDP growth (blue), a lagged indicator, and job openings the leading indicator:
All of which apparently explains why GOP consumer confidence is now back at all time highs. The same level it achieved post tax cut, right before the wheels came off the bus.
It appears they believe they got away with the crime of the century. And who would tell them otherwise?
They don't trust anyone who can be trusted.
In summary, record risk and record over-confidence have led to the widest gap between fantasy and reality in U.S. history:
Cyclicals are warning what's coming. Contrary to popular belief, Go Daddy is not a leading indicator.
Vixplosion has been delayed, not denied:
