Thursday, March 19, 2020

The End Of Disney World As We Know It

This isn't the end of human life, this is the beginning. However, it IS the end of corporate Disney World. Sadly, the government can't "bail out" an entire decade of rampant criminality. What we are witnessing is ten years of hubristic alchemy unwinding in one cataclysmic moment...

For a decade straight central banks have been bailing out egregious stupidity. To the point where today's moron class started to believe that being ignorant was a virtue. Enter Trump, saviour to the useful Idiocracy. For the past year all manner of people have been saying that they could never vote for Bernie Sanders because he is a "socialist". I said all along, these central bank invented capitalists would abandon their  pretend ideology at the drop of a hat when their portfolios got monkey hammered. And here we are with an entire generation of former capitalists now turned instant beggars. Desperate to be rescued from their bad investments. These people make real socialists look like free enterprise advocates by comparison. Pathetic. 

Sadly, central banks are now out of ammo. In the past 48 hours, the ECB brought their biggest bazooka of the decade, and the Fed injected an entire month worth of liquidity. The S&P was up 11 points on Thursday. An unfortunate reversal of fortune that has left today's moron class trapped inside their imploding moron bubble. Circle jerking each other all the way down to total obliteration. Seeking and finding solace from like-minded sociopaths. Those who are in a "balanced" portfolio of stocks and bonds are now getting monkey hammered on both sides.

This just in:

NYT: Super Dunce Is Now Suppressing Jobless Claims

"Job losses have become so sensitive that the Trump administration is asking state labor officials to delay releasing the precise number of unemployment claims."

 "Many states reported that their employment websites crashed due to a surge in traffic, suggesting demand for unemployment benefits is even higher than the reported figures."

This nascent reset will usher in an entirely new way of life, called life. A world in which the object of living does not revolve around competitive consumption and entertainment spectacle.

To be sure, for today's consumption addicts, cold turkey will be difficult. And for today's bailout addicts, mark-to-reality markets will be extremely painful. Central banks are slowly learning that they can't bailout everyone at the same time, much less with the economy under quarantine. Excess liquidity can't augment non-existent economic activity. The dollar is screaming higher due to human history's largest margin call. In the process, sucking liquidity out of every other asset class.

The real issue that no one wants to discuss is rampant extreme deflation, now consuming every asset class. Cash is king in a world full of bloated bubbles. We live in a world having a glut of everything except toilet paper and hand sanitizer. All of that junk is about to come onto the world market in human history's largest yard sale. True unmitigated deflation has only just started. And policy-makers have no way to stop it from expanding. The quarantine of course has only made it 10x worse. There is no point in giving people $1,000 and then telling them they can't go out to spend it. There is no way it can reach the real economy.

Meanwhile, social mood is turning down hard against corporate bailouts for today's stock buyback addicts. One pundit after another decries giving bailouts to today's c-suite buyback junkies. However, given the exigencies of this credit collapse, these newfound patriots need not worry, because ratings agencies will ensure that ALL stock buybacks are now curtailed.

Which will remove all remaining liquidity from Trump Casino:

"The US stock market could be losing one of its most solid sources of support, as big banks lead a wave of companies putting share buybacks on hold."

Some analysts worry that by putting programmes on hold, companies are removing a pillar that the stock market has come to depend on"

“This removes the support we’ve become addicted to,”

Next, we are going to start hearing about those countries that can no longer meet their debt commitments as they attempt to massively increase fiscal stimulus spending in the middle of a credit crisis.

Overnight, the ECB unleashed their own bazooka after Christine Lagarde disappointed bailout whores this time last week. Which has put ANOTHER fake bid under the casino.

You know you're an optimist when:

The last line of support has been getting pounded day and night for a full week now:

The way I view this global economic quarantine is like a 747 turning off its engines in mid-air to perform emergency maintenance, all while praying they can be re-started prior to the crash.

It won't work.

If you look closely enough, you can see central bankers flapping their arms in the wind: