Thursday, September 10, 2020

Going Down With The Clown

All bubbles explode. The biggest bubble in human history will be no exception...

MAGA is the biggest bubble in human history. It has cost untold trillions in squandered monetary and fiscal stimulus, and record bullshit to inflate. Only King Donny could create a monster bubble in a pandemic depression.

History will show that everything about this era was fraudulent. Today, another apocalyptic level of weekly jobless claims. Corporations are frantically cutting staff to finance their stock buyback bloated balance sheets which are now imploding.

We have a climate crisis with the most environmentally irresponsible president in U.S. history. And a health care crisis with a president who has done everything possible to destroy public healthcare. Now Trump admits that he intentionally downplayed the severity of the COVID pandemic. A decision that cost thousands of lives, for no reason other than to get himself re-elected. I say this now with 100% conviction, those who have supported Donald Trump will come to regret supporting him for the rest of their lives. No amount of fake values will offset the stain this man will leave on the Republican party and the conservative movement. These are people who never knew when they had gone too far and crossed the line into historical farce.

It's all coming to a reckoning ahead of the election.

I had been thinking that the Trump cult and its acolytes could continue on for a while longer, but I don't think so anymore. I believe that it's a spent farce, running on MAGA glue fumes. This four year circus has done tremendous damage to the economy, the environment, to human health and well-being, and of course America's standing in the world which has collapsed; however this four year vacation from responsibility has reserved its greatest pain for those who believed in it. The cost of ignorant arrogance will be totally unaffordable.

Zooming out to the global view, last week when Shinzo Abe spuriously resigned, it was a stark reminder that 30 years of Japanonomics has failed. The continued greater overuse of fiscal and monetary stimulus as a proxy for a functioning economy doesn't work. Who knew. Worst of all, the continued abuse of stimulus gimmicks prevents politicians from making the kind of reforms that are needed to create a sustainable economy. And yet Japan never learned the lesson. Which is why the rest of the world is heading down the exact same path.

Perversely in some measure we have to be thankful to Trump. His wrecking ball administration is tearing down the walls of Globalization faster than anyone could imagine. This week he said that he wants to "decouple" the U.S. from China. The Realtor-in-Chief has not even the slightest clue what is involved in creating an industrial supply chain, but he wants to end the trading relationship first and work out the details later. Imagine what his base will say when everything in Walmart triples in price and half the shelves are empty. Trump is one stop shopping for what is wrong with the conservative movement. He is all marketing  deception and empty talk, nothing more. 

Which gets us back to the casino. Contrary to ubiquitous belief, alternating 1,000 point up and down Dow days are not "normal". It's a sign that Skynet is losing control over Trump Casino.

I put this on Twitter last night. It shows that fifteen of the twenty largest percent down days in the past six years have come in 2020. It also shows that 80% of the losses were incurred Thursday through Monday which is the weekly options expiration window. The period during which market makers are unwinding their delta hedges.

The battle of the 50 day moving average is moving into its third day (Thursday). The first leg down was the fastest on record. 

I predict that when the 50 day falls, the next leg down will be much faster. Here we see that weak bears got rinsed twice through the all time high, first at the RNC, and second this week.

As they say, the second mouse gets the cheese.