Thursday, December 24, 2020

Here Comes Satan Claus

The man-child having a temper tantrum in the White House is now by far the greatest market risk. He created this signature moron bubble, it's his right to explode it with extreme dislocation...

Wall Street:
"We upgrade the moron bubble to strong bonus"

Trump's Twitter feed these days is indicative of a mad man becoming more and more unhinged by the day. As his failed presidency sputters to an ignominious ending, Trump wants to somehow avoid looking like a "loser". No easy feat, for someone who just got trounced by a substantial margin

Trump is not a loser, he is a sore loser with the morality of a nine year old crack addict. Which is why he has now become very dangerous. 

Sorting through multiple articles on this stimulus impasse, it's impossible for me to see an easy way out of this newly created Trump disaster. And unfortunately, U.S. politicians only specialize in finding easy ways out. In his shock and awe video criticism of the budget and stimulus, Trump broke ranks with his own party both on the size of the budget (too large) and the size of the stimulus (too small). Leaving aside the fact that Trump has happily signed off on several identical porky budgets in the past, the fact is that paring the budget down to whatever fictional budget Trump doesn't have in mind, would take weeks, and surely cross over into the next session of Congress (January 3rd). Which takes that option essentially off the table. What Trump wanted to do with his entire rant was to send a message to his own party that he is pissed off they didn't make him emperor for life.

It's very hard to placate that type of ambition. 

As far as the larger one time stimulus check demand, Trump has across the board support from Democrats and zero support from Republicans in either the House nor the Senate. So that larger stimulus check is nothing more than a fantasy which is now putting at risk the real stimulus bill that passed. Trump's own party won't override him because they are afraid of him, especially House Republicans who now view the current budget as being politically radioactive. Meanwhile, McConnell is treading carefully ahead of the Georgia Senate runoff, because any further incitement of Trump will put the Roman Senate at risk.

This venn diagram depicts the current quagmire. There is more agreement between Democrats and Trump and Democrats and Republicans than there is agreement between Trump and his own party:

All of which means that the most likely scenario is that there will be NO stimulus until the market crashes a sufficient magnitude to inform today's ubiquitous Madoff-acolytes that there is more to an economy than Ponzi markets chased by a society of groupthink idiots. Which makes this TARP 2.0, except this time around the bailout in question is for the middle class. Many people seem to forget that the first TARP vote failed, then the market crashed and the second vote passed. However, much to the surprise and consternation of everyone involved, after a few days' vertical short covering rally, the wheels came off the bus for real.

TARP 2.0:

Unfortunately, as I warned in my 2021 prediction, the other massive risk is the Disney Casino itself. It is overrun with newbie investors who are massively over-leveraged to the junkiest stocks in the casino. 

They are of the unified belief that their abject lack of knowledge makes them invincible:

"Portnoy, who took up day trading this year and has seen some positive results, told FOX Business that "he's never heard of Chris Sacca" but added, "He sounds like a sour loser and an idiot."

"I have as much experience in this trading climate as they [experienced investors] do. And maybe the very fact that I’m not burdened with their history has allowed me to see this market for what it is, while they have failed miserably."

In other words, newbie day trader Portnoy has as much experience with gambling in pandemic super bubbles as everyone else. Furthermore, he is not burdened with the knowledge of what happened to every other idiot who believed they were not burdened by knowledge. To be fair, back in March 2000 I was unburdened by knowledge as well. And then I became unburdened with capital shortly thereafter.

Good times.

I noticed that in November cyclicals went vertical, however, in the past four weeks, gamble-from-home Tech stocks have gone parabolic. 

You have to wonder, who is behind it all?

"Making money in stocks is easy, all you do is click, click, click"

This is a key reversal of fortune on the weekly, featuring mega volume spread over 3.5 holiday trading days chasing junk stocks: 

"Stick around for the Santa rally"
"No doubt"

This week, Fintech saw the largest key reversal since September, except far larger in terms of volume:

News that Apple is entering the self-driving car space sent robotics and autonomous technology stocks parabolic:

"I’m not burdened with their history which has allowed me to see this market for what it is"

Sure, but can you see yourself for who you really are?