Wednesday, March 25, 2020

The Best Sugar Rally Record Plunder Could Buy

Capitalism is now wholly dependent upon socialism, for the rich. Which obviously proves which system is better. Today's bailout whores are praying that biblical plundering of future generations will save them from meeting inconvenient reality for the first time in their Disney lives. Fortunately, no one squanders borrowed money better than Trump...

The largest fiscal bailout in U.S. history just passed the Senate last night. Which brings the combined fiscal and monetary stimulus injection to level '11' full crack high, for those keeping track at home. As usual, everyone got bailed out except the people who need to get bailed out...

This is the Fed bazooka in visual perspective:

Weekly monetary injection:

Here we see the fiscal insanity that was just passed late last night:

Today's bailout whores are praying that this biblical profligacy is adequate to support the casino at these levels. Because as we see, the Dow was "saved" at critical MAGA support.

Trump's presidency is now at stake. 

Capitalism is now 100% dependent upon socialism. For the rich. 

Taking all of the above into account, there is only one glaring problem: While the economy is in unprecedented shutdown mode, the small businesses that actually need support the most, can't get it. It's all well and good to hand out "stimulus" checks, but it's meaningless if people are barred from frequenting local businesses. Which means that the money will get plowed into paying bills and paying down debt. And of course, the greatest beneficiary of this entire debacle.

In other words, the GDP multiplier of this latest bailout will be the limit approaching zero. Which is why deflation will continue to grow unchecked with every passing day.

Based upon the sheer magnitude of stimulus, this rally SHOULD by all rights last for days if not weeks. However, if it rolls over sooner rather than later it will be deja vu of the TARP rally in 2008 - too little too late.

So far, this rally has been led by the most beaten down sectors, including small caps, banks, transports, industrials, hotels etc.

Breadth is very strong.

What the bulls should be worrying about however, is the fact that Tech is lagging. Which means that the Tech bubble is at risk of final explosion.

Here we see Microsoft is clinging to the 200 day moving average.

Semiconductors and Chinese Tech stocks are trading in unison on the hourly. This rally is now one week old:

Here we see EM Debt with semiconductors in the background. Global risk is trading like one big brick.

In summary, this is the best sugar rally several trillion dollars could buy. Today's policy-makers don't have control, they have the illusion of control. Nevetheless, today's trapped gamblers believe their massive bailout will work.

Of course, if they are wrong, the level of fear and panic will be on a scale we've never seen before.