Friday, December 11, 2020


Mass poverty, mass evictions, no stimulus, no Brexit deal, a 9/11 in COVID deaths every day - good times. This week, gamblers onboarded record speculative exposure in the face of record risk. What comes next will test my hypothesis that these Disney markets can no longer handle RISK OFF.

Any questions?

What any true Idiocracy would do in a pandemic: rush into a monetary fueled asset bubble in stocks benefiting the most from economic obliteration. And then panic buy those same stocks vertically into the vaccine distribution. The virtual economy ended the week at record overbought (top pane) and on record volume (lower pane). The three prior instances at this level of overbought led to two week pullbacks.

This week in record overvalued Virtual Economy issuance can be summarized thusly: 

Profitless Biotechs led this week's manic rush into risk as vaccine fever reached a fevered pitch. 

"The Food and Drug Administration authorized Pfizer’s Covid-19 vaccine for emergency use on Friday, clearing the way for millions of highly vulnerable people to begin receiving the vaccine within days"

"When is the best time to buy these stocks"

"Wait until they start shipping the vaccine"

Continuing uncertainty over stimulus weighed on cyclicals this week. What gamblers seem to forget is that cyclicals rallied INTO the TARP bailout, and when it passed, they final exploded. Which means deal or no deal, the result will be the same. 

"Congressional leaders are barely talking. Renegade centrists are trying to cut a deal that Republicans don’t like. And the president is predominantly focused on overturning an election that he lost"

“Maybe we don’t have enough people in here who have ever been poor”

Indeed. That will change. 

Global gamblers are sanguine in the face of a redux of June 2016 when gamblers were sanguine in the face of the original Brexit clusterfuck. 

"Currency traders who once assumed a deal would be completed before a Brexit transition period ends on January 1 will be nervously watching events over the next 72 hours after British Prime Minister Boris Johnson warned late Thursday that the "deal on the table" was not "right" for the United Kingdom."

"Yes there are insane risks, but we have printed money!!!"