Conflict Of Implosion

Everything is RISK OFF right now, EXCEPT Return on Imagination. Go figure. We are witnessing the pump and dump of the century...

In historical hindsight, the Trump era will be known for one thing and one thing only - MAXIMUM fraud and corruption. It will be the new "gold standard" by which all future fraud will be measured against. Instead of a Roman Bacchanalia, it will be a Trumptopian Bacchanalia. Ten times the debauchery...

It was only a matter of time before the decade of monetary bailouts and magical thinking gave way to a cult leader who was 100% fraudulent. Return On Imagination (ROI) has never been higher.

The "new normal", that's what today's EconoDunces call this central bank vacation from reality. It's the new abnormal. A period of time when insanity has been normalized. To be skeptical of Disney markets is to be deemed heretical. A financial Unabomber. That's what I am for even questioning printing money to bid up stocks. Who do you think you are questioning PhD economists? 

Into this con man's paradise walks Trump who can say whatever he wants to his admiring followers, and they believe it. NO ONE else can get away with that amount of deception. He does it every single day. Due to non-stop lying we are wholly desensitized to non-stop lying. Which is why the economy has continued to steadily erode in the background. We are told that the greatest economy in U.S. history is going fantastic. All it needed was 5% of plundered GDP, without which we would be deep in recession already.

People are now taking a known sociopathic liar at his word. A very dangerous game to play. 

And seeing this level of successful fraud has given license to copycat fraud. Particularly in markets, where the SEC has been neutered. GW Bush did the exact same thing, he basically shut down the SEC. Out of which ideal ecosystem for criminality were born exploding subprime CDOs, shocker.

Now, we see this MASSIVE disconnect between stocks and bonds. And why is there such a disconnect? For one thing, because bonds are priced based upon economic reality, whereas stocks are priced based upon Return On Imagination. Which has never been higher.

One thing today's bagholders STILL haven't noticed is that stock buybacks peaked over a year ago with the average stock. Which means record insider cash outs at public expense:

But the question on the table is why is the U.S. going through its second Tech bubble in twenty years? And the answer is because Tech companies are the locus of the IPO market. And hence Wall Street needs as much hype and capital focused on Tech as possible to allow for maximum pump and dump. We saw this in spades back in Y2K - boatloads of profitless crap dumped into public markets. Now, we are seeing it all over again. Except instead of small companies that are profitless, we are seeing massive "unicorn" billion dollar companies that remain profitless getting dumped into public markets.

A bubble in Tech AND a bubble in profitless IPOs, does anyone make the connection? No.  2019 was the least profitable year for IPOs since the last mega Tech bubble:

The range of companies pumped and dumped in 2019 ran the gamut from unprofitable unicorns (Uber, Lyft, Peloton, Pinterest, Slack etc.). To REVENUELESS Biotech. And of course cloud internet companies.

At this late stage ALL major markets are RISK OFF: Oil, Emerging Markets, Currency Carry trades, bond yields.

Interestingly, the only market NOT risk off YET, is Return on Imagination.

Keeping gamblers in a super Tech bubble and in the stock market in general twenty years ago was not an accident. And it's not an accident now. It's business as usual.

This Idiocracy is about to learn the same lesson I learned twenty years ago. It's called, "conflict of interest".

One thing for certain - this is not Y2K.