Wednesday, March 4, 2020

The Last Bailout. For The Rich.

I said this week would be biblical, so far so good. The next item on the agenda is to "retest" the MAGA Kingdom and all of Trump's innumerable lies. Don't be surprised when the retest explodes spectacularly. Socialism for the rich ended spectacularly yesterday, leaving no bailout safety net below the casino for the first time EVER. It's called "Trump-o-nomics", the removal of all safeguards prior to self-implosion. Now, in the American tradition, it's time for rich man's panic...

But first, I came up with a new graphic to explain today's fog of bullshit which has been tremendously exacerbated by the Coronavirus. Today's "pundits" are using the virus to explain away all manner of globally imploding data as "transitory". Far worse yet, they are now using the resulting depressionary record low interest rates to justify today's asinine stock prices. It's a manic reach for implosion at the end of the cycle. 

What I call the "Finance of Implosion" aka. what they don't teach you in business school:

If someone had predicted one week ago that the Fed would cut half a percent and Joe Biden would be endorsed by Klobuchar, Buttigieg, and NOW Mike Bloomberg. Would anyone think that the market would be lower than it was at this time last week?

Probably not
(Updated at COB Wednesday)

The two biggest back to back up days in ten years. 
The biggest rallies are in bear markets.

The algos made a lot of money this week rinsing weak hands in both directions. Temporarily obscuring the fact that the true direction is down:

Getting back to socialism for the rich, one of the tried and true caveats of the stock market is the concept of the "retest". Whenever the market makes an important bottom it can't be fully trusted until it's retested. For example, last week's v-bottom on Friday morning has yet to be retested. The VixPlosion in February 2018 was retested four days later, and held at the 200 dma.

Unfortunately this time the casino blew through the 200 day.

Which means that Trump's last week call to 'BTFD' is now the last line of support. Below that there is no support until we get down to his other famous 'BTFD' call in December 2018.

I think we all see where I'm going with this. A whole lot of bullshit is about to be re-tested for its trustworthy nature.

Zooming out to a wider timeframe, we see that the December 2018 'BTFD' and Fed bailout is the LAST line of support until we hit the pavement sans bailout safety net.

And interestingly that level was NEVER re-tested. And hence it can't be trusted to hold. 


After all, who with an IQ greater than 5 would trust Trump? 

Everyone knows he's a con man.

Any questions?

"They told me low interest rates are great for stocks"

Fed chief Powell feeding the bailout whores yesterday: