When I tell people that market explosion is inevitable, they always ask me "when is that?". The fact that most people will get wiped out by it is apparently of no concern...
Most people these days assume the past is the future. They are set in their ways and have no intention of changing. Therefore, they happily extrapolate mass insanity into the indefinite future and sacrifice their mental health on the altar of mass consumption. A lifetime of bad habits doesn't change at the end. The idea of adapting to a new reality of less is more or quality over quantity, is never under consideration. This society has been brainwashed from birth to consume at any cost.
We see this all around us at the personal level, people consumed by their addictions. But we see it at the societal level as well. No politician or pundit on either side can tell the public what they don't want to hear. There is no market for the truth these days.
Meanwhile, the average IQ has been collapsing, thereby front-running the next level of widely ignored corruption. Which has left us skeptics of rampant fraud constantly playing catch-up to the next level of delusion. Our many critics claim we have been "wrong" timed in our prediction of the inevitable. Their ONLY concern is "when" NOT "if". The fact that this will all explode one day with extreme dislocation can wait another trading day. In the meantime, THEIR beloved financial weapon of mass destruction grows from one magnitude of destruction to the next.
Granted, no one can predict the future with 100% accuracy. The best we can do is measure the amount of buffoonery that precedes collapse. Which in the current case is on the scale of biblical. Through necessity, the level of buffoonery has had to increase from one larger bubble to the next, according to the law of magical thinking. Central banks in their infinite hubris have constantly bailed out the masses from impending reality. And in doing so they have painted this society into a corner. At this latent juncture, rampant corporate profiteering has forced the Fed into record tightening. They are now hellbent on creating a global depression. At the same time, home gamers are widely told to expect a "soft landing".
Today we got news that Q1 GDP was NEGATIVE. The first quarter of incipient recession. The Dow gained 700 points on the news.
THIS will be the epitaph for this era:
A Fed worried about inflation expectations becoming embedded in a COLLAPSING economy, oblivious to the fact that inflation expectations are ALREADY embedded in inflated stock market valuations:
"The analysis of SEC filings for 100 US corporations found net profits up by a median of 49%, and in one case by as much as 111,000%. Those increases came as companies saddled customers with higher prices and all but ten executed massive stock buyback programs or bumped dividends to enrich investors"
The level of denial is very similar to 2008.
We are constantly told "The consumer is strong", but it's a massive lie as anyone can see:
The Nasdaq is at critical support:
Globally things are far more dire, as the relentless dollar rally collapses the various dominoes which are heading inexorably towards U.S. markets:
Beneath this market is a wall of put options. Bearishness is the highest since October 2008. For a time, a high level of hedging can keep the market from imploding, especially around a major event such as this impending FOMC meeting, which is what happened during the TARP bailout of October 2008. Back then, many investors hedged that meeting so the market rallied into the news. Soon after, the puts expired and the market collapsed.
The next major financial event is what I call "Millennial Margin Call" or MMC. It started last year with the Gamestop debacle and so-called "democratization of markets". Which was merely a euphemism for the ensuing RECORD Wall Street pump and dump.
2022 has the dubious distinction of having the WORST Nasdaq breadth (highs - lows) in market history:
So far miraculously across Cryptos, Biotechs, junk IPOs, SPACs, Chinese stocks, and Ark ETFs there has been NO capitulation. These newbie investors have been taught to "HODL" which means hold on and never sell. Because as long as you never sell, you never have a loss. Of course, this theory means nothing to margin clerks:
"The number of active users fell 8% as compared with December 2021, mostly thanks to users with lower balances engaging “less in the current market environment”
What I see happening next is MMC (Millennial Margin Call) coinciding with FOMC DOUBLE tightening. Which when it occurs will lead to a final reach for protection into a ZERO liquidity market.
What I call IGNITION.
