The Point Of No Return

"The Sea On The Tide Has No Way Of Turning"

I am not predicting a market crash, I am predicting a market explosion. The likes of which will be impossible to bailout...

This week the Fed and Wall Street were in consensus, we need to accelerate this meltdown:

Step back for perspective...

At the lingering end of a two year pandemic the global economy is struggling to regain normalcy. History's largest asset bubble is imploding and the Federal Reserve has decided to embark on accelerated tightening. The growth stock crash is approaching the one year mark with certain key sectors having already given back all of their pandemic gains and or -40% deep bear market: Chinese internets, Biotechs, Fintechs, Ark Innovation, IPOs, EVs/green energy, Cryptos, ecommerce, momentum Tech etc.

The losses are STAGGERING. Multiples of 2008 subprime.

Wiped out Millennials are abandoning the market, as the era's most popular online broker, Robinhood is down -90% from its  2021 IPO high. 

The Nasdaq was down -19% at the week's low and then bounced ahead of the seminal FOMC meeting. The S&P 500 is holding up better as hedge funds rotate en masse to cyclical stocks.  Therefore, it remains record over-valued by every known metric. 

The Fed now believes that inflation is the ONLY risk to markets and the economy and that they are behind the curve. They are happily ignoring the reverse wealth effect as the air comes out of their asset bubble.  The inflation the Fed is concerned about is a lingering remnant of the pandemic which exacerbated supply side shortages. The Fed's inflation gauges are at a 40 year high on a relative basis, whereas most commodity prices are substantially below their 2008 highs. The Baltic Dry index which is a leading indicator for U.S.. inflation shows the problem with focusing on percentages versus absolute price levels, ESPECIALLY following a depressionary pandemic.

Bad data leads to bad decisions. 

On the labor side, the jobs market is very tight due to mass layoffs during the pandemic. Many former employees have either retired early (3 million Boomers) or moved to gig jobs. The Fed's models ignore ALL of these pandemic-related factors , which make their economic models OBSOLETE and totally useless.

They are flying blind straight into the ground.

"The Fed has admitted that it is seriously behind the curve"

Aggressive Fed tightening should affect the economy with a lag"

The biggest policy error since September 2008 just took place this week. And to celebrate the occasion, consumer sentiment collapsed to that same level:

Consumer discretionary stocks are flirting with bear market on decade high volume.

The Wilshire/S&P ratio worst since October 2008:

Emerging Markets got monkey hammered this week by the rising dollar.

Global market dislocations ended Fed tightening in 2015 AND in 2018.

This time Powell and Fed are totally ignoring global markets.

Unfortunately, there is no bullish case anymore. Up until now the entire bull case which ignored valuations, was based upon  the ubiquitous belief that printed money is the secret to effortless wealth. Now that argument no longer exists. However, there remains an industry of financial salesmen who need sheeple to continue buying financial junk through all types of market risks and at the end of the cycle.

THAT is why we find ourselves at this perilous juncture where fear of missing out is the only risk today's investors understand.

"Despite the deep losses in tech stocks, there’s still an appetite for risk among the retail crowd"

"Stock funds have absorbed $84 billion this year and just two out of the 18 trading days have seen outflows"

In summary, the Fed is wrong. AGAIN. 

The economists who believe the Fed, are wrong. AGAIN. 

And the consequences are already exorbitant, on their way to unaffordable. 

This era's fantasy that central banks can bail out investors from unlimited amounts of risk is filed under the long forgotten lesson of moral hazard. The muscle memory of which lingers long after the safety net has already been removed.

mor·al haz·ard

"The lack of incentive to guard against risk where one is protected from its consequences"

  

Here Comes "Common Prosperity"

Globalization failed to create common prosperity, so now we're going to do this the hard way. Super bubble meltdown at the zero bound. It's amazing how few people want to see it coming...

"It's time to pull the plug on inflation!"

It's shocking how clueless people are at this juncture. No one would believe this extended "cycle" began with a global financial meltdown caused by the laundering of cheap global capital through the U.S. housing ATM machine. Weaponized 10x, Wall Street subprime time bombs were sold to global banks desperately attempting to avoid 0% interest rates at the end of the cycle.

KABOOM!

Now here we are in sudden death overtime of the longest cycle of all time watching the Fed "pivot" from expanding the world's largest asset bubble on record, to exploding it in record time. Standing around like we're watching a tornado in a trailer park.

Today's bulls are functioning solely on their standard model of mass ignorance. The less they know, the better. Today's pundits have as their job to sugar coat every bad piece of information and ensure that the only resulting conclusion is to buy more stock. If Bernie Madoff were alive today he would have to be released from prison and installed as head of the SEC so he could oversee the smooth functioning of this epic mass deception.

So it is hugely ironic that China is the FIRST country in the entire world to begin turning their back on this epic human and environmental disaster via the policy they call "Common prosperity". Meaning, no more bailouts for the rich.

Already this no bailout policy has drawn the derision of GOP and Democrats alike. It's UnAmerican to turn your back on fellow billionaires. So say wealthy politicians trading stocks in their spare time. The only way anyone could believe any of this is "normal" is if Walt Disney is your national historian. 

Of course, the term "Common prosperity" is loaded with irony. For me it's a euphism for super crash sans bailout. One so big and so bad that the rich head straight to their yachts and flee to the Cayman Islands. 

There are random times when I actually agree with Jim Cramer. By that I mean down days, because that's when he's bearish. Between his bullish days of exhorting his flock to buy stocks, he  like me somewhat acknowledges that the amount of junk paper dumped in 2021 is deja vu of 2008. My words, not his.

SPACs/IPOs and Cryptos are this era's suprime, only ~5x larger in magnitude. 

“I want to believe that many of last year’s 600 IPOs are better than the 300 that we got in the dot-com era. But the recent action tells me they aren’t,”

I can’t even find 15 good companies out of the whole 600 odd enterprises that came public last year"

“These broken IPOs have emptied the pockets of investors, and yet they’re selling their winners to fund the over-hyped losers"

Got that? According to Cramer, this era has twice as many junk IPOs as there were in Y2K. 

As it was in Y2K, the meltdown began with the junk companies, but eventually those imploding stocks dragged down the good companies with them.

The vast majority of growth stocks are deep in a bear market, and now the Fed is about to implode cyclicals. Yesterday's gap reversal rally was the largest since October 10th, 2008 which was the acceleration point for the Lehman meltdown. At that point stocks were already in a bear market, but they fell 40% further. Although, the article below doesn't mention any of that. It just makes it sound like a great (one day) comeback.

Not only did both the S&P and Nasdaq stage massive one day reversals yesterday, but as I showed on Twitter today Nasdaq highs-lows were the worst since the pandemic and before that...

October 10th, 2008.

However, unlike that era when the Fed was working overtime to keep markets from final imploding (Hint: It didn't work). This time we are told that the Fed MUST raise interest rates in the middle of a meltdown. 

To restore credibility:

This should do it.

One year ago, the Gamestop pump and dump scheme almost imploded the stock market. Too many newbies who didn't know what they were doing were buying and selling stocks for the first time. That debacle took place amid record Fed liquidity. Now one year later we are witnessing the Millennial margin call amid maximum Fed liquidity withdrawal. 

Nasdaq down volume has been trending up for the past five years:

Of course this reckoning is long overdue. The real question is how is it that so few people see this coming. And I realized recently the reason why bearish commentary doesn't reach the masses, and it isn't for lack of trying. It's because we're not responsible for teaching people right from wrong. That biblical responsibility has been clearly neglected. Today, we have religion without values.

Some think I'm a preacher, I'm not. I see things more from an historical perspective. This cycle of ignoring record inequality has taken place over and over again throughout history. And it always ends the same way. 

"Common prosperity"

GLOBAL MELTDOWN. IN PROGRESS

THIS is what happens when investors are bailed out too many times. They see a Fed aggressively raising rates at the end of the longest cycle in U.S. history in the largest asset bubble in world history, as a reason to buy stocks. All under the assumption that if they get into trouble they will once again get bailed out. The fact that the Fed is heading in the exact opposite direction doesn't seem to make any difference. Which is why we are seeing EPIC mass complacency during a global meltdown. Already in progress...

Be clear, it's no one's job to see this coming. From every salesman's standpoint, it's their job NOT to see this coming. After all, what are Wall Street analysts with their unanimous buy ratings and perma-bullish market predictions other than glorified salesmen? Instead of selling used cars, their job is to sell financial "assets", meaning pieces of paper that may or may not have value depending on the stage of the cycle. Were this to be the end of the cycle, that would imply they are selling worthless junk again. Same as last time global markets imploded. Enter plausible deniability, the opiate of the deeply stoned masses. Never before has the overdose of denihilism been as strong as the one they are imbibing right now. 

This lethal juncture checks every box for an end of cycle. I would argue that the cycle was likely ending in 2019, however the pandemic and its attendant super bailout extended the longest cycle in U.S. history by two more years. Now, at the crest of the breaking deflationary tsunami we are to believe that the Fed which has ended EVERY cycle in post-WWII history, will not end the longest cycle in history. All because Wall Street has decided that bear markets can no longer exist.

It just so happens that among the many current indicators screaming end of cycle, one of the key indicators is a Wall Street crime syndicate lying constantly. 

So it is that we find ourselves on the cusp of a Federal Reserve meeting to decide the future course of liquidity tightening, that investors are buying the dip on the assumption of another Fed bailout when in fact nothing could be further from the truth.

Over on Twitter I have shown many charts that indicate this current crash and bear market rally is essentially identical to the March 3rd FOMC bounce that occurred just before the wheels came off the bus. To be sure, back then there was a pandemic spreading worldwide. However, this time around we are dealing instead with the pandemic HANGOVER, which will be far worse from an economic and markets standpoint.

Wouldn't it be nice if we could all just "pivot" from the unquestioned inflationary hypothesis to the recession hypothesis overnight? Unfortunately, only Zerohedge and Jim Cramer are intellectually "flexible" enough to have their transitory opinions marked to market every single day. 

Therein lies the problem. While pundits eager to maximize their subscriber base can leapfrog from hyperinflation to depression overnight. Most investors can't. Which is why they get demolished at the end of the cycle by believing they can ride out a recession in massively over-leveraged "inflationary" assets.

Of course this market didn't just roll over and implode from all time highs. The Nasdaq and small caps have been forming a top for one year now. 

Today's collapse in breadth (highs-lows) was the third worst since 1978, BEFORE the market bounced ahead of tomorrow's FOMC meeting. I included the list of worst breadth dates, which includes March 12th and 16th 2020 then today, March 18th, 2020, then October 10th, 2008 during the worst part of the Lehman meltdown.

As we see, positioning (lower pane) is fully delusional: 

 

The bulls at this lethal juncture all believe this is under control. But it's not under control. It's merely a massive delusion working it's way to a point at which markets get totally out of control.

Ultimately, the Fed will be forced to realize that the markets now pose a risk to the economy. At what point that happens is anyone's guess, but at the current rate it may only be days away. 

When they do however, they will only make things far worse. Why? Because by reversing policy now, they will be slamming on the reflationary brakes, and all of the useful idiots who bought and believed the reflation hypothesis will go through the windshield. Cyclicals will be bidless.

And you know that means. 

It means it's the end of the cycle. And Powell can't bail out everyone. 

Fool Me All The Time, Shame On Me

Three decades worth of criminality got crammed into one pandemic asset super bubble, but today's casino gamblers only fear a long overdue wage increase. Today's con men are now boxed in by their own bullshit...

This coming week is setting up deja vu of September 2008. A Fed dicking around worrying about inflation while markets are imploding all around them in real-time. Either the market final implodes ahead of the FOMC causing them to pivot, or the Fed will final implode markets during their meeting. Either way, all signs point to collapse. 

Breadth has been imploding for a full year now. While Nasdaq lows to end the week, were the worst since 2008. 

The dawn of 2022 is revealing a lethal hangover from history's largest monetary heroin bubble:

This week, Tech earnings from Netflix and Peloton reminded us that the pandemic caused a one-time massive over-investment in stay-at-home technology reminiscent of the Y2K date change. Tech stocks were already weak due to Fed actions, but now gamblers must navigate an earnings season that will reveal declining growth. 

In addition, peak IPO/SPAC issuance on an order of magnitude 400% what it was pre-pandemic is now causing Wall Street banks and brokers to implode. Retail trading activity peaked a full year ago. Meanwhile, record IPO issuance has left a 2022 insider lockup expiration of lethal magnitude. And of course with peak valuation, we have now seen peak M&A activity. All of which is now imploding financials which is where investors have been rotating for months. 

Can't you tell?

Whereas the median return for IPOs since 1990 is +14%, in 2021 it was -14%. A mere 28% difference. 

Rivian Automotive cited in the above article is just one of many  unprofitable billion dollar IPOs that are now going bidless. Even Jim Cramer is warning investors to AVOID profitless stocks. The same ones he was endorsing during the rally.

Bulls will have to explain to me how everyone can own something on the way up and NOT own it on the way down. 

Next there's the now one year running Millennial margin call which is the locus of widely ignored collapse. It was one year ago that the Gamestop pump and dump scheme lured a generation into gamified markets where they could get bilked by known con men. What jackass pundits far and wide called the "democratization of markets" has now been revealed as the democratization of fraud. 

One growth sector after another is now imploding back to the pre-pandemic level on their way to the pandemic lows. The Global Nasdaq ended the week right at the pre-pandemic collapse level.

Also under the radar is this era's record global housing bubble. Which is already imploding in China. Recently we learned that U.S. housing construction is at the highest level in 50 years. And yet, home buyer sentiment remains mired at 40 year lows. This set-up is even WORSE than in 2007 which was the last time the Fed imploded a housing bubble they helped create. They don't get full credit however, because it's the housing industry that is once again telling us that high home prices are a "supply" problem. 

Fool me all the time, shame on me. 

Fittingly, heading into an FOMC meeting that is all about "inflation", the vaunted Crypto "inflation safe haven" trade is imploding in real-time.

Another MASSIVE lie bought and believed by today's ubiquitous army of useful idiots at the behest of today's quasi-criminal financial pundits. 

In other words, markets are already doing the Fed's job for them. They are collapsing the fake wealth effect that was behind this "inflation" blip this entire time. 

Of course CPI is a lagged indicator, so bulls need to now wonder how long it will take for the Fed to realize they are making a MASSIVE mistake. 

How "long" measured in percentage terms.

I'm guessing TOO long, because Nasdaq lows are ALREADY worse than they were in December 2018 when the Fed last reversed.

Doh!

In summary, the pandemic and the mega asset bubble it spawned was a con man's paradise. The past three decade's equivalent corruption was unleashed on Millennials at the end of the cycle. 

Nevertheless, there comes a point at which the con man fools himself. We have now reached that juncture. If these people now want to tighten liquidity in the midst of a collapsing global asset bubble all because they fear a long overdue working class wage increase, I say go for it.

FOMC: Fear Of Missing Crash

The two year Treasury bond just hit 1% and global stocks shit a brick. Who alive in 1980 would think that a 1% interest rate would be anything to worry about? The only thing consistent in this society is that the bar keeps going lower and lower, especially the IQ...

"Inflation is out of control"

Measuring percentages using a zero denominator and calling that "inflation" is at best dumbfuck math. At worst it's deceptively motivated to ensure that wages never re-capture their lost decades to corporate profit. What so many pundits are ignoring about "inflation" is that profits have grown 25% since pre-pandemic, whereas wages are up 8%. And yet I don't hear any pundits complaining that profits are too high. We are now a society ordered by and for the maximization of profit at the expense of everything else - the economy, the environment, and the workforce.

There are several reasons why persistent structural deflation is a problem for the economy. First off, it means that the economy is now stuck at the zero bound and any time there is an attempt to lift off from 0% interest rates, markets implode. So it is that the Fed now finds itself fully charged to tighten monetary policy while ignoring the $200 trillion global asset bubble in the room. It's a fool's errand of biblical magnitude, and hence no one questions it. Why the Fed allowed the asset bubble to grow to such a lethal magnitude will be THE question of all time. What were they thinking? It's as if they were too busy trading stocks to notice their bubble was out of control. This entire society is fully captured by asset bubbles now, having full faith and confidence in the virtual simulation of prosperity and its acolyte QE. Former hedge fund manager Hugh Hendry predicted it would end this way. A society fully addicted to Disney markets and questioning nothing to the bitter end. 

However, the REAL risk arising from the zero bound is the lack of economic stimulus buffer during recession. To inflate a record credit bubble AND keep interest rates at 0% for too long, is the worst case scenario in the event of economic dislocation. It means the Fed won't have the tools they need to revive the economy.

Consider this risk in the context of the record credit bubble. The pandemic allowed many companies that were already imploding in late 2019 to cheaply rollover their debt. This time around, they won't have the Fed "emergency powers" to tap during the downturn. 

Which means we now face record de-leveraging at the ZERO bound. 

Next week, the FOMC will update us on their interest rate plans for 2022. Over the past weeks since their last meeting, markets have been pricing in more and more rate hikes. Over the weekend, Bill Ackman suggested they should do an immediate half a point "shock and awe" to restore their credibility. 

What Ackman doesn't seem to understand is that if the Fed raised rates half a point next week, every risk market on the planet would be a smoking crater. Maybe he does understand, since he made "The greatest trade of all time" during the pandemic betting against credit markets. No conflict of interest there. 

Which gets us to the casino. 

First off, bulls should be worried that despite ever-rising bond yields, banks and financials are now imploding deja vu of Q3 earnings. In my last post I predicted that both Goldman and Schwab had reached peak profit and one day later both imploded. They are joined by JP Morgan, Citigroup, and Interactive Brokers.

The Momentum Factor strategy has been reconfigured to include a much larger weighting in Financials. Here we see it's very much deja vu of the last Fed "policy error" in 2018:

The IBD 50 consists of the fastest growing companies in the U.S. Companies with REAL earnings. Now these too are getting monkey hammered. Next support is the 2020 pre-pandemic high:

The NDX internals are indicative of Third wave down.

Oil realized volatility is almost as high as it was during the pandemic, and that is in a rally. Which portends badly for what happens when this rising broadening top implodes. 

We see via the volume momentum oscillator, the S&P is nowhere near a "buyable" dip. Which means far more dislocation is in order.

The Japanese have learned the hard way that EVERY central bank pump and dump ends badly for those who buy them with both hands. 

They too are heading back down to reality. 

The Party's Over

Imagine if today's pundits ran a headline like the one above. They would lose 80% of their subscribers in a minute. So they don't. But, we know the party is over, because the Fed is taking away the punch bowl. This entire rally from the COVID low was about NOTHING except printed money. The Idiocracy's secret to effortless wealth. The great "democratization" of markets was nothing more than the latest generation getting muppetized by global central banks and Wall Street...

"Fundamentals"

Gamblers don't want to be told the party is over. Which is why today's pundits never say it. Even though every seasoned market veteran knows full well that the S&P 500 is now 100% correlated to the Fed balance sheet. In this era, it's all that matters.

Over on Investing.com, one pundit asserts the Crypto bull market is not over. 

Yes it is over, because the Fed said it's over. Crypto is the ultimate useless asset that is solely dependent upon monetary expansion. 

Crypto fanatics inform us there is this reason or that reason to own one of several thousand shit coins proliferating like gerbils. There was only ONE reason to own these things. Monetary heroin. And now that that's going away, we can put away the false pretense that these are actual currencies. In the real world, no currency is 100% correlated to every other currency. The dollar is not 100% correlated to the Yen, however, every single Crypto currency is correlated to Bitcoin. When Bitcoin implodes, they ALL implode at the same time. There is no safe haven Crypto currency. On the other hand, try shorting the Yen in a global meltdown. You'll get your face ripped off.

It appears that a lot of people didn't get the memo. One of the dominant memes of 2021 was the Powell money printer meme. Remember that one? That was the number one reason to own Crypto. We don't hear to much about that one anymore. It appears that triple tightening put a damper on that hypothesis. 

Is it any wonder that Millennials are getting wiped out en masse? They have been told they can "Hodl" through global depression. And in this era there aren't three wise men and a virgin to tell them any different. 

Take a look at this chart of Schwab in the top pane and Interactive Brokers' daily average trades in the lower pane. Schwab's daily average trades peaked last February also, but I don't have their data going back several years, so I use IBKR data instead. It's the same idea. The key point is that Financials are getting bid up by this late cycle rotation due to Fed tightening, but the underlying fundamentals are growing weaker. 

This week, Goldman Sachs earnings are on tap. Does anyone honestly believe that Wall Street will have ANOTHER record IPO year with the IPO market imploding in real-time?

Global IPOs peaked a year ago and yet broker stocks are still at an all time high. 

Why? Fed tightening is driving a late cycle rotation into the worst stocks to own at the end of the cycle. But it's not the end of the cycle, so don't worry about it. 

That's another term you will NEVER hear anyone mention, the end of the cycle. It's strictly verboten, because it would mean that ALL rosy economic predictions are wrong. And, it means that deleveraging is about to occur, hence extreme economic dislocation. In a society run by and for salesmen, these are not ideas to be bandied about lightly. Almost every major corporation sees a profit decline in a recession. 

Nevertheless, I don't get paid to blow smoke up people's asses. And the 80% who don't want to hear what I have to say, left a long time ago. My user base is net of denialists.

If you want to see end of cycle in real-time, take a look at this chart of Emerging Market currencies. It exhibits a repeating pattern of three lower highs followed by a major deflationary crash. The last one being 2015, not including the pandemic. The 2018 debacle touched the line but Powell reversed just in time. Had he not, then 2018 would have been the explosion that this one will soon become. Because this time he is boxed in by "inflation". 

The Fed and China are now diametrically opposed on monetary policy. China led the world out of the pandemic and ironically, they are leading the world INTO recession. The Fed divergence is only making the probability of a major global financial "event" far more likely. 

The one thing that the Fed and Chinese leaders have in common, is that they are BOTH throwing gamblers under the bus. Something we haven't seen this past decade. China's policy of "common prosperity" could be more aptly called "common poverty". And the Fed is going down the exact same path. 2022 will see the largest combined fiscal and monetary stimulus reduction in U.S. history. 

So it is that gamblers find themselves BTFD a Fed-imploded Nasdaq at a time when they are the LEAST likely to get bailed out. 

Because who would tell them any different?

Whatever It Takes To Explode

“The arc of the moral universe is long, but it bends toward justice.” - MLK 

This era is the sum total of the idiocy of the past decade+ since Lehman. Never before have we seen so much mass stupidity parading around as smug and over-confident as now. Belief in the impossible is now mandatory. The Fed has convinced investors they can reduce economic inflation while keeping asset inflation at all time highs...

"Investors should favor U.S. equities this year even as valuations are historically high and the Federal Reserve moves toward tightening its monetary policy"

While many investors point to similarities between today’s U.S. stock market and the dot-com bubble of late 1999, Goldman sees significant differences, including the breadth of the rally...To be sure, the S&P 500 is concentrated in a small group of stocks"

With logic like that, who needs enemies?

This market's breadth is the worst since March 2020 and before that October 2008:

Nowhere in Powell's Senate confirmation hearing this week was there any mention of a "cost" associated with reigning in inflation. It was all upside. One GOP senator after another was pounding the table we have to do this. Subsequently, multiple Fed members have made public statements reiterating they will do whatever it takes to bring down inflation. Not one mention about asset prices. 

Why? Because if they did, the reception they received would be not nearly as gleeful. Picture this scenario:

Sen. Shelby: "The Fed has lost credibility. You need to do whatever it takes to bring down inflation"

Powell: "We will slash the balance sheet and raise rates. This will cut the Dow in half by April. 

Sen. Shelby: "You know a little inflation isn't the end of the world"

Shelby's ilk believe they can implode Millennials but their investments will remain fully intact. It's a fool's errand of the highest order. Nothing could be more lethally delusional.

Back in 2015 when the Fed attempted to raise rates off the zero bound for the first time in SIX YEARS the market imploded in August 2015 before they got the chance. So they backed off for a few months and then they raised rates in December and the market imploded AGAIN in January 2016. After that they stopped raising rates for A YEAR.

Back then of course markets were not nearly as leveraged as they are now and the Nasdaq was technically much stronger in terms of breadth and participation. Similarly, China's stock market was imploding as it is now, however this time their real estate market is also imploding and the pain is spreading to the top tier developers. As I've said, this is THEIR Lehman moment. Meanwhile, their ZERO COVID policy is a total disaster for the economy. Hong Kong is on the verge of total collapse, due to the combination of One China rule, COVID restrictions, and real estate collapse.

Here we see Chinese junk bonds are bidless:

Walking into the grocery store this week, every tabloid had the headline "Bidenflation at 40 Year High". The worshipping of markets has been going on for 40 years at the expense of the middle class. Each iteration has led to a new low in interest rates and total employment (capacity utilization). It appears that the people who believe that markets are more important than people have finally fooled themselves.

Where I truly part company with today's inflation pundits pounding the table for higher interest rates is what happens NEXT. 

I have been adamant that the FASTEST means to bring down inflation is via the asset markets, as we've ALREADY seen multiple times since 2008. And that's where the first order effect of Fed policies are taking dramatic effect on growth stocks. To date, Chinese Tech stocks and now Biotechs have given back ALL of their pandemic gains. Next will come Ark ETFs, Cryptos, Fintechs, Cloud internets, IPOs/SPACs, Social Media, EV/Clean Energy and then the mega cap Techs.

As we see above via Goldman Sachs, year over year the bullish market predictions have not changed one iota. Last year the reason to buy was a loose Fed. This year the reason to buy is a tight Fed.

All of which means that very soon Millennials will be fully imploded.

Why that's good is not for me to say. Only a morally void society throws its own children under the bus using the same means of  criminalized pump and dump schemes that we've already seen TWICE in the past twenty years. 

This week we learned that the Ameritrade investor movement (positioning) index came down slightly in December. But nowhere near the levels it was at in December 2018 when inflation was FAR lower and the Fed was NOT boxed in. 

These people actually believe that economic inflation AND a tight Fed are good for asset prices.

It's a lethal delusion. 

One year ago, the Gamestop pump and dump scheme lured a generation into the casino for the first time. Subsequently, they have been financially obliterated.

I'll leave it to today's bulls to explain why that's good. What it all comes down to is that this society EXCELS at ignoring other people's pain.