We now live in a late stage Idiocracy that is in denial of risks that are unfolding in broad daylight, to say nothing about what's going to happen when this gong show final explodes...
Among the many known risks in 2023 - Tech super bubble, bank run, BOJ carry trade implosion, housing bubble, extreme over-valuation etc. etc. - debt ceiling fiasco was near the top of the list. That is until June, when Congress finally reached an agreement with a mere one day left. Bulls unilaterally decided that the 2011 scenario had been avoided, so the agreement catalyzed a melt-up into the end of July. Which happens to be exactly when the U.S. debt was downgraded in August 2011. And it happened again on Tuesday, August 1st. And yet no bullish pundit saw it coming. So what else could they say now? "It doesn't matter". By the way, they said the exact same thing back in August 2011. But the market plunged -20% anyways.
Incidentally, those who say this entire fiasco "doesn't matter" apparently don't read the news, because Congress is heading for ANOTHER funding clusterfuck in September. In other words, the ratings agencies had to send a message:
Remember Occupy Wall Street? That movement was launched at the nadir of the debt ceiling fiasco. Far worse awaits this incipient collapse "not happening" in real-time.
Of course, the biggest risks of 2023 have yet to be revealed. The known risks are bad enough, but the yet unknown risks will be far worse. Consider that no one predicted the Adani explosion, Carl Icahn's Ponzi revelation, and regional bank meltdown. But those things happened anyways. That's what happens on the right shoulder of a super cycle head and shoulders top. We finally learn who has been doing stupid things with free money.
Nevertheless, pundits continue to say that BOJ policy normalization isn't happening, even though it's taking place RIGHT NOW. They predicted the BOJ would NOT modify their policy twice, and then it happened twice. Now they are saying it again. They don't learn from their own mistakes.
Why? Because placating the stoned masses is now the primary order of business. Making sure that money is spent freely on all manner of goods, but most of all ad-sponsored financial bull shit.
These people are amply proven sociopaths, so anyone who trusts them, does so at their own risk.
Another lethal denial is the belief that the Fed is done raising interest rates. This week we learned that Q3 GDP is heading back to 4%, which guarantees not only more rate hikes but also an IMMINENT u-turn higher in CPI.
But economists say it doesn't matter as these two headlines on my news feed show:
And, as far as Friday's jobs report, we learned today that ADP came in hotter than expected. I've always suspected that a hotter than expected jobs market could explode stocks. We'll find out on Friday when the first test of last week's pause melt-up gets system tested.
Which gets us to the world's largest and most important stock, by market cap. Which reports tomorrow after the close.
As a preview, tonight we got Qualcomm:
"Qualcomm reported third-quarter earnings on Wednesday that beat Wall Street expectations"
Net income during the quarter fell to $1.8 billion, or $1.60 per share, a staggering 52% drop from the $3.73 billion or $3.29 per share reported at the same time last year.
In summary, what else could go wrong?
