Friday, January 29, 2021

The Last Jedi Mind Trick

This week, faux Millennial populism jumped the shark from Occupy Wall Street to coordinated pump and dump. While Gamestop and AMC junk stocks captured all of the attention, the REAL risks were ignored. In the SEC tradition...

This week in a nutshell:

"The jump in the rankings for financial apps represents a massive interest among the general population in retail investing through apps like Robinhood or Webull. Reddit’s jump is due to the popularity of the forum Wall Street Bets, where the GameStop boom began"

This is one of the best signs we have yet that the retail boom has gone mainstream."

"It's time"

Occupy Wall Street, indeed. It's times like these when being a bearish blogger is almost entirely pointless. The animal spirits are running rampant, and any amount of risk can be easily explained away. The bullish arguments are so specious that it's pointless to even try to warn people. The level of risk right now is unprecedented in casino history. 

There were multiple outages across all of the major retail brokerage companies this week. The only concern all week surrounded new restrictions on trading junk stocks. There was absolutely no concern over the outages themselves. The SEC is now investigating trading restrictions while ignoring the pump and dump schemes hatched on Reddit. Over on Zerohedge, pump and dump schemes are being compared to populist uprisings. According to this new narrative, "the people" have had enough, and are now taking their revenge by bidding up Gamestop to asinine valuations. Historical parallels to the French Revolution, as depicted on South Park. 

"Life, liberty, and day trading"

Step back for a reality check from the ironic perspective of generational warfare.

For all intents and purposes, the Boomers all but destroyed the economy. Some would say that's too harsh a statement, but intentional or not that's what happened. When measured by the wholesale outsourcing of manufacturing, the degraded quality of jobs, the demolished benefits and job security, the bilking of Social Security to pay for tax cuts, the non-amortizing Federal debt now conflated as GDP, the doomed dollar etc. etc. Voodoo economics. All to bid up the stock market to asinine valuations to provide the illusion of full Boomer retirement. 

So now the fleeced Millennials, facing zero economic upside have exacted their revenge by turning the stock market into the world's largest casino, at the end of the longest cycle in U.S. history. Which has put this entire Ponzinomic enterprise at risk of explosion.

Suffice to say, there will be plenty of pain to go around when the overwhelming majority lament that no one saw it coming. Of course no one saw it coming, it's been coming for so long, these jackasses assumed this unsustainable gambit would continue forever. The more ludicrous it became, the more they believed in it. 

This blog exists solely to inform that this society is cornered by dumbfuck ideas. Unlike Japan, there will be no decades of deception. Monetary asset Ponzi is now a global phenomenon.

It was quite a week in the Casino. The S&P 500 ended the week camped at the 50 day Maginot Line. Bulls will need to pull a rabbit out of their ass to prevent wholesale meltdown next week, as the S&P ended at the lows of the week:

The VIX was up 60% on the week:

"It becomes self-fuelling: the more the Street steps back, the lower the liquidity"

Reddit day traders forced hedge funds to deleverage their portfolios on the short side AND the long side. It's called "grossing down" in portfolio management parlance. The unintended consequence of day trading revolution - Reddit delinquents watching their portfolios self-implode.

"Hedge funds can be forced to sell (long) holdings as losses on shorted stocks mount."

Ten VIP stocks that are hedge-fund holdings include: Fiserv (FISV), Uber Technologies (UBER), Booking (BKNG), Expedia (EXPE), Sea (SE), Caesars Entertainment (CZR), Micron Technology (MU), Pinterest 
Pinterest Inc.(PINS), Carvana (CVNA) and Peloton Interactive (PTON).

Those 10 stocks are down an average of 9.2% over the past five days."

Europe is also camped at critical support:

The Global Dow is going full 2018 deflation mode:


One thing I know for certain as I hedge my bets on NeverNeverLand exploding - the grasshoppers on the other side of this trade can't afford to be wrong. They don't have a plan for when con jobs are no longer sanctioned by the SEC. 

In summary, gamblers were notified a year ago with the COVID outbreak that the status quo is over. But, they wanted one more blow off top in risk seeking Ponzi markets, lubricated with insane amounts of central bank liquidity.

The hangover from which will be brutal.

"What does that reset look like? Schwab and his colleagues are pushing the concept of “stakeholder” capitalism — an approach to business and economic policymaking that looks beyond the interests of shareholders and toward the well-being of society"

At least 225 million jobs disappeared worldwide over the past year — losses that were four times larger than what was exacted by the global financial crisis more than a decade ago"

To the Oligarchs pretending to care about the rest of the world now that their monetary inflated wealth has reached biblical proportions. 

Too late.