Wednesday, June 10, 2020

100% Moron Bubble. Accept No Substitutes

History will say that the Banana Republican party needed a con man to make them great again. No one else was up to the task...

Over the past decade, central banks have made being an ignorant fool extremely lucrative. However, all of that free largesse is about to come to a totally unexpected ending.

"No one saw it coming"

We have now achieved a 100% virtual economy, a figment of the imagination. And it's attended by a 100% Ponzi stock market. Central banks have succeeded in achieving FULL monetary euthanasia. The alt-right views this pump and dump as a big conspiracy. I view it as a conspiracy of dunces. There will be no beneficiaries when this house of cards collapses. When capitalism failed to achieve global prosperity and inadvertently wiped out the middle class instead, the con men of the day had to come up with something. What we are witnessing is market manipulation on a biblical scale. 

We now live in a society that has not even the slightest concept of basic economic reality. I am referring of course to today's economists. 

Among the gambling class, it gets even worse. This week, the hottest stocks were all bankrupt companies:

"In this day and age, as small day traders salivate at any opportunity to get rich quick, a bankruptcy filing has apparently become a buy signal for many of them"

In a market as bizarre as this, it seems only fitting that the next step would be a growing affinity for companies that can’t pay their debts"

Today's pundits consider this type of action "bizarre", however they have no reluctance in recommending the S&P 500 with its infinite P/E ratio, zero earnings visibility, and the largest impending corporate credit crisis in world history.

Enter the virtual economy, because for those who eschew bankrupt car rental companies, and near-bankrupt airlines and cruise lines, they can always buy the stay-at-home mega bubble. Hence it's fitting that as all of this insanity reaches climax, the leading stock is...


Here we see Amazon went vertical ahead of the FOMC and now sports a tall wick on the daily (and weekly) candle:

All of the MAGA stocks (Microsoft, Amazon, Google, Apple) are going parabolic. New all time highs all around except Google.

Compliments of MAGA caps, today the S&P Tech sector broke through the February high. This COVID rally was three times more rapid than the last melt-up:

Whereas the rest of the market is rolling over. Hard.

Volatility is getting set to explode post-FOMC as the largest cap MAGA stocks finally roll over and join reality.

Sadly, central banks can't handle what comes next. 

They had no problem getting copious fools into the insolvency bubble, but they can't get them out. Soon we will be limit down across every risk asset class globally, at the same time. When today's Idiocracy realizes that their leaders are as dumb as they are, then the underwear will be mighty stained.