This society has stumbled upon the perfect formula for unforeseen meltdown on an epic scale. The only question is, who gets the credit when it explodes - the people who built this time bomb or the masses who bought it? Suffice to say, this society of spoiled, decadent assholes is about to learn the lesson of a lifetime for trusting known psychopaths and their fabricated predictions for the future...
What happens when you combine record over-valuations, a hobbled economy, record corporate debt, record stock market leverage, record IPO issuance, a collapsing Tech bubble, a maxed out Fed, and end of cycle inflation?
You get mass complacency. What else?
This is the perfect formula for "unforeseen" meltdown. It combines all of the elements of fraud and delusion this society demands. A populace desperate to be lied to is finding no shortage of con men to meet their needs.
Which is why the Federal Reserve just issued this "CYA":
"The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event"
While broader market spillovers appeared limited, the [Archegos] episode highlights the potential for material distress at [nonbank financial institutions] to affect the broader financial system”
Cue Ark ETFs which are trading like a brick. The combination of non-stop rotation from deflation trades into cyclical reflation trades along with Wall Street's relentless IPO supply dump are a recipe for disaster.
Here we see the flagship Ark Innovation ETF (weekly) is back at key support and volume is rising.
One of the many sectors in the Ark portfolio that are now going bidless is the Solar/Green Energy sector:
We see via IPOs that another successful pump and dump cycle has ended. The Millennials were bilked by the exact same psychopaths they were protesting one decade ago.
From Occupy Wall Street to Imploded by Wall Street - it took ten years to democratize fraud.
Full credit, these useful bagholders took down decade high IPO issuance in a mere four months. A round-trip back to Ramen noodles in record time.
The platform that was almost imploded by the Gamestop pump and dump just added nearly 10 million new crypto users since that debacle. Crypto is Gamestop x 100.
Here we see what I mean about complacency:
It's abundantly clear that most people don't factor in market risk when they invest. These people are flying blind, duped by bullish headlines.
This anniversary week of the 2010 flash crash is the fourteenth up week in a row for the Dow Transports, which is the longest sequence in half a century.
In the words of the Fed, a "re-pricing event" is no longer an option.
