We are witnessing the supernova blow-off top to Trumptopia. The grand finale will be spectacular...
NorthmanTrader: This Is Human History's Biggest Pump And Dump Picture Bill Clinton telling people to buy stocks at the pinnacle of Y2K. Because that is what Herbert Hoover did today. The fact that he doesn't know that it's called a 401k, not a 409k, would be of primary concern if he were any other president...
Fiduciary responsibility, what's that? May, 2019:
"Last year, the Trump administration abandoned a regulation designed to protect U.S. savers from conflicted investment advice." Tomorrow is the December jobs report. Recall, VixPlosion took place the Monday after the January jobs report in early February 2018. Despite being a month earlier, the set-up is looking similar. However, as we would expect on the right shoulder - this one is far more lethal. We are witnessing a blow-off top of DECADE large proportions.
January 7th, 2019 Consumer Electronics Show, Las Vegas:
"Today we saw some remarkable moves in all sorts of tech stocks as analyst after analyst came out of their fox holes and boosted stocks with bullish recommendations that reverberated throughout the entire tech complex. It's a special time, a moment when analysts survey their universe and make predictions and the predictions are almost universally bullish." It's important to recognize that you are not early this time around."
We are now seeing the fullest extent of salesmanship culture systematically weaponized against society, to enrich the few at the expense of the many. Commercialized perma-optimism having invaded every facet of society. Including what now passes for "economics" aka. money printing. All, the inevitable result of a consequence-free bailout from 2008, and of course exceptional mythology, running on the glue fumes of recycled failure. Now nothing more than a Darwinian zero sum game. Exceptional only in its ability to use people up. Those who willingly propagated this fraud have sold off all semblance of future credibility. Human call options on Donald Trump.
Looking back, the adjectives that will be most often applied to the MAGA Kingdom in the future will be: farcical, fraudulent, pathetic, and of course criminal. In 2016, the fox was granted open access to the hen house. However, unlike 2008 when today's financial services con men got a free pass, I predict jail time at the end of this, for what currently passes for "corruption as usual". The allocation of capital to human history's largest Ponzi scheme aka. Trump Casino. While insiders cashed out in size...
Below we see the GDP growth rate (blue) with the Federal surplus/deficit (red line). Clinton had the strongest GDP growth and ran a surplus. Bush had the next strongest GDP growth albeit deficit (tax cut) driven. Obama had the third highest GDP growth while digging out of the deficit chasm of 2008. Trump has the weakest GDP growth despite the greatest deficit expansion since 2008: "Greatest 'Conomy ever"
Stock market divided by U.S. debt
It's a testament to the criminality of today's financial engineering that "stocks" can be making new all time highs without the participation of ANY of the economically correlated sectors. Energy and retail are the weakest sectors. Followed by autos and transports. All well below their all time highs. Banks are where things get interesting. On the weak end of the spectrum there is Wells Fargo, making its third lower high since peaking two years ago this month:
On the strong end of the continuum there is JP Morgan, prime beneficiary of 2008:
The bank index overall, is corrective having peaked two years ago this month:
Of course the housing market never really recovered after 2008
As it was during the housing bubble, we are being lied to constantly about the housing market. By the exact same criminals, who are telling us that supply is "too tight". Which is only true at the lowest end of the market. The upper end of the market is massively over-supplied.
Chinese stocks are "leading" this last leg of the rally, ahead of next week's big trade deal signing. Celebrating a year over year increase in tariffs:
It appears that the trade war has had the effect of obfuscating the collapse of the global economy, as exporters/importers rushed to front-run the new tariffs:
"The Baltic Dry Index, the Baltic Exchange’s key sea freight index, has suffered its largest fall in the past seventeen years." the severity of the plunge indicates an end to the so-called ‘front-loading’ effect of tariff deadlines.
As the US-China trade war rumbled on for more than 18 months depressing global growth, firms rushed to import goods before the latest tariff deadlines."
Tech is parabolic: AMD, the top performing S&P stock two years in a row just got upgraded.
"Time to buy"
Move along, nothing to see here...
In summary: The partisan divide has never been wider: And for that we can thank Faux News and the rest of the alt-right business media. Human history's biggest circle jerk of well known liars, frauds, and criminals:
The bigger the bubble, the more explosive it ends... In the end, Trumptopia will be remembered for only one thing - a massive bubble of hot air that spontaneously exploded with maximum dislocation.
This just happens to be the biggest, fattest, ugliest bubble in human history. Sponsored by central banks and accelerated by high frequency trading programs that care nothing about earnings, the economy, or risk management. Strictly momentum.
This proprietary formula for generating human history's largest super bubble and super crash has made risk management impossible. In particular, shorting individual stocks or the major indices has become lethal.
I would be remiss if I did not comment on last night's selloff due to the Iranian rocket attack on the base in Iraq. My oldest son's best friend from the Marine Corps was en route from Camp Lejeune (NC) to that exact base in Iraq when the attack took place. Fortunately, they turned back.
It was a reminder that some of us have more skin in this re-election gambit than the draft-dodger-in-chief. Our son, also in the Marines, is safely within rocket reach of Kim Jong Un aka. "Rocket man".
Enough about me and my sleepless wife. From a markets perspective, the futures sold off -50 points (S&P) and then ramped back to breakeven within a few hours. If you blinked you missed it.
The key takeaway is that volatility is rising and today's "all time highs" are one event away from imploding. Fortunately, Trump informs us that Iran has "backed down". Sure. Several million pissed off young men with no future decided to go back to unemployment to help Trump get elected.
Who wouldn't believe that? It's like the trade war, "it's over" on Twitter and Faux News, but in the real world nothing has changed. Getting back to the casino: No surprise, the world's largest stock by market cap, and hence most overowned stock in world history, keeps making new highs:
Internet stocks are getting their mojo back. Amazon, Facebook, and Netflix are still all below all time highs. Here we see Google just reached a new all time high. Every peak in Google for the past year was a peak in the market:
As I said earlier this week, the oil rally is over:
If anyone asks, this fraud was only about Wall Street pump and dump
This fantasy that central banks can control every asset class on the planet with their drip feed programs and momentum algos, is a first order delusion. The only thing they can do is keep making the bubble bigger until it finally gets out of control. Something Japan learned the hard way a long time ago.
In other news, Australia is officially on fire now.
Today's denialists tell us this is all "perfectly normal" when viewed on a ten thousand year timescale. So those of us planning a visit one day will have to get a time machine and jump forward a few dozen lifetimes.
These are the same fucking morons who believe that Trump is their new Jesus, and printed money is the secret to effortless wealth. Little do they know that their sole role in history is to be the biggest and dumbest clowns in U.S. history and therefore NOT to see the circus ending. A role they fulfill admirably I might add. Club Orlov: License to Kill: "George Orwell once offered an excellent explanation for this phenomenon: as the imperial end-game approaches, it becomes a matter of imperial self-preservation to breed a special-purpose ruling class—one that is incapable of understanding that the end-game is approaching"
[T]he United States actively supported the Iraqi war effort by supplying the Iraqis with billions of dollars of credits, by providing U.S. military intelligence and advice to the Iraqis, and by closely monitoring third country arms sales to Iraq to make sure that Iraq had the military weaponry required."
"In 1988, during the waning days of Iraq’s war with Iran, the United States learned through satellite imagery that Iran was about to gain a major strategic advantage by exploiting a hole in Iraqi defenses. U.S. intelligence officials conveyed the location of the Iranian troops to Iraq, fully aware that Hussein’s military would attack with chemical weapons" By 1988, U.S. intelligence was flowing freely to Hussein’s military. That March, Iraq launched a nerve gas attack on the Kurdish village of Halabja in northern Iraq."
1988: Iran-Iraq war ends in stalemate
1990: Financially depleted Iraq invades Kuwait, beginning the Gulf War
"A United Nations report in March 1991 described the effect on Iraq of the US-led bombing campaign as "near apocalyptic," bringing back Iraq to the "pre-industrial age"
2002: Bush Administration fabricates intelligence linking Iraq to Al Qaeda and 9/11, also asserting that Iraq had developed Weapons of Mass Destruction
March 2003:U.S. invades Iraq based upon fabricated pretenses
Baathist regime loyalists flee country into neighbouring Syria to later form terrorist group ISIS
No WMDs are found in Iraq Bush wins re-election anyways
2005: U.S. establishes democratic elections in Iraq, Iranian proxy government wins the first election. The U.S. successfully hands control of Iraq to Iran.
"When the United States invaded Iraq 14 years ago to topple Saddam Hussein, it saw Iraq as a potential cornerstone of a democratic and Western-facing Middle East, and vast amounts of blood and treasure — about 4,500 American lives lost, more than $1 trillion spent — were poured into the cause."
From Day 1, Iran saw something else: a chance to make a client state of Iraq, a former enemy against which it fought a war in the 1980s so brutal, with chemical weapons and trench warfare, that historians look to World War I for analogies. If it succeeded, Iraq would never again pose a threat, and it could serve as a jumping-off point to spread Iranian influence around the region."
“Iran is smarter than America,” said Nijat al-Taie, a Sunni member of the provincial council and an outspoken critic of Iran, which she calls the instigator of several assassination attempts against her. “They achieved their goals on the ground. America didn’t protect Iraq. They just toppled the regime and handed the country over to Iran.”
I'm sure America's first mentally challenged president can "fix this".
