The Most Explosive Load Of Bullshit In History

“We are just in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination” - Paul Tudor Jones


Any questions?

Yesterday at Davos, billionaire Paul Tudor Jones credited the Fed for creating a Y2K-style asset bubble. Today, Trump blamed the Fed for keeping his big, fat, ugly bubble from reaching its full potential.

Who is right? Dumb or Dumbfuck? What they both have in common is getting everyone into human history's biggest asset bubble. Before it explodes...

Excuse me? How can this be true? I am told the exact opposite on Zerohedge. 

Every second article on Zerohedge blames the Federal Reserve for this asset melt-up. And yet their Casino-Bankupter-in-Chief totally disagrees. The alt-writers on Zerohedge know that when this bubble explodes, Trump will get a substantial amount of the credit for hijacking Fed policy. Therefore they must engage in active fact suppression. After all, Zerohedge themselves already admitted that Trump's trade war policy was intended to manipulate the Fed. The alt-writers on Zerohedge are getting out ahead of the inevitable rioting. Fair enough. No one wants to think that they themselves voted for the biggest Ponzi schemer in human history. Nevertheless, I would imagine it would help their active disinformation campaign somewhat if Trump himself wasn't constantly taking FULL credit for this asset bubble, while constantly blaming the Fed for keeping it "under control". In other words, Trump is 100% right - with himself at the helm of the Fed, the markets would have definitely exploded by now.

The key role that ad-sponsored disinformation plays in this overall con job, can't be overlooked. History will say that Trump's lies were weaponized against the masses, for fun and profit. 

Where it gets interesting is the army of idiots at Davos each one tripping over themselves to keep this asset bubble bubbling. Yesterday, billionaire Ray Dalio warned everyone to stay out of cash. Also yesterday, billionaire Paul Tudor Jones - the guy quoted above warning about the asset bubble - advised everyone to front-run collapse:


“We are just again in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination,”

Asked if investors should sell now to avoid a blow-up like the one that took place in March of 2000, Jones said, “Not really. The train has got a long, long way to go if you think about it.”


The crazy train has a long way to go, despite being as overbought as it was in 2018 and Y2K.

Three years later, spot the difference in Trump's view of responsible Fed policy:

"By keeping interest rates at this low level, the Fed is being political. We're in a big, fat, ugly bubble and we better be awfully careful"
- Candidate Trump, 2016


"By responsibly normalizing interest rates to provide insurance for the next downturn, the Fed has held back my stock market"
- Incumbent Trump, 2020

In summary, as of today's close, it's not too late to self-implode on the Trump crazy train.

Just remember, "No one saw it coming"

Bueller?

An Inconvenient Implosion

Climate activists inform us that today's climate inactions are far too little. Expert climate deniers tell us these non-actions are far too much. The inconvenient truth is that these inactions are too little too late...

Therefore the "better" solution is to curl up into the fetal position and propagate denialistic disinformation until the MAGA Kingdom explodes spectacularly. By way of proving the amazing carbon-collapsing power of ignoring all problems until they can no longer be ignored. 

This society specializes in talking about problems non-stop in order to avoid fixing them. Bullshit is now America's number one industry. A specialty that has inflated human history's largest denial bubble. Sponsored by human history's lowest interest rates which are compliments of assiduously ignored global poverty deflation. What else?

This poverty capital has been over-invested in every industry on the planet, but no industry has misused more imploded demand capital than the oil industry itself. Of all industries, the Energy industry is by far the worst performing industry under Trump. And the least solvent.

And why have they performed the worst? Serial incompetence is one reason. And addiction to unfounded bullshit is another. However, the biggest reason is because that industry has been most in denial about the return of demand in a deflationary environment. In other words, while deploying record amounts of cheap capital, not once did they ask themselves why is capital so cheap?

The Energy industry is on the leading edge of self-destructive denial. A harbinger of what happens to those who ignore the inconvenient truth while demonstrating vast expertise in uninformed investment.

And who spread all of this climate disinformation, could it be the same buffoons who lied themselves into insolvency TWICE in five years?

Now extend that analogy to this entire society and Trump's continual assertion that this is "the greatest economy ever". An assertion that today is scarcely challenged by today's lamestream media. Unquestioned by academics. Gladly propagated by business leaders. And of course believed unquestioningly by sheeple at large. 

It doesn't occur to even one of them that if the economy is doing so well, why is capital STILL so cheap this far into the cycle. When EVERY other time in U.S. history rates were rising.


It's of course because we are in a "mid-cycle adjustment", on our way to happily ever after...

Waiting For Tech Super Implosion

The only stocks making new highs in Trumptopia are the ones Trump hates the most...

The MAGA fantasy bubble is leveraged to the dumb money index bubble. The dumb money bubble is leveraged to the Y2K 2.0 Tech Super Bubble. The Tech Super Bubble is leveraged to end of cycle short covering.

In other words, the entire world of denial is now massively leveraged to Tesla. By FAR the best performing large cap stock in Trumptopia, is the largest manufacturer of electric cars. You can't make this shit up...

Semiconductors are in parabolic blow-off top mode:

The two most shorted stocks are Apple and Tesla, both of which go up every single day. Whoever is shorting these stocks is overdue for psychiatric evaluation. Nevertheless, I find it hard to believe that hedge funds are shorting anything given that the concept of "risk management" is a relic of a pre-Central Bank bygone era.

Here we see the most overowned hedge fund names are in vertical mode, as overbought as they were two years ago:

Momentum Factor also two year overbought. This entire delusion being solely about momentum. How fast useful idiots can shovel money into Trump Casino. 

Before it explodes.

The Tech sector is exhibiting the same overbought pattern it did earlier in 2019 when it topped. This time the distance back to support at the 200 dma is much further:

That's the good news.

The bad news is that reflation is rolling over hard:

As is oil and Energy stocks:

Ironically, the MAGA ETF - consisting of the most corrupt industries in the United States, failed to confirm the all time high:

Politically Responsible Investing®

"The innovative strategy behind the MAGA ETF that allows you to invest in companies that align with your Republican political beliefs. The MAGA Index is made up of 150 companies from the S&P 500 Index whose employees and political action committees (PACs) are highly supportive of Republican candidates"

This is a minor preview of how this farce ends...

As I said recently, comparisons to Y2K are entirely specious.

Whereas that bubble explosion did not immediately impact the economy. This bubble IS the economy...

Trump Casino 2020: Rigged To Explode

No surprise, Trump is trying to buy another election using useful idiots' money...

Markets have already decided that Trump is going to get re-elected. Which means there is no margin of impeachment:

"A concentration of billionaires who descended this week on Davos, Switzerland for The World Economic Forum’s 50th annual meeting are harboring a “dirty little secret” about the U.S. presidential election in November, says the Hoover Institution’s Niall Ferguson.


“The dirty little secret of Davos 2020 is they all need him to get re-elected”


It's obviously not really a "secret" that the super-rich love Trump. His base still actually believe that he is a man of the people, but anyone with an IQ over five doesn't believe that crap. He is the Fifth Avenue poser loved by billionaires and useful idiots alike. Only in Hollywood. 

Here is where it gets interesting. I mean really interesting:

We have ubiquitous indications of record positioning and record valuations almost ten months ahead of the election. If the election were held tomorrow, these optimistic sentiment factors would be a huge benefit to Trump. However, there has been no instance in world history where a bubble of this magnitude has remained elevated for anywhere near that amount of time.

Which is to say that markets are in no way prepared to deal with any form of reality. They are priced for Trump.

Here is Trump's approval rating via Rasmussen:

What we see is that his approval fluctuates with the market, however upside correlation is weakening. Meaning there is all downside no upside, both for over-priced markets and Trump's re-election prospects. Which are now one and the same. 

As we saw one year ago, Trump's approval rating tanked with the market:

What could go wrong with voters betting with record leveraged capital on re-election ten months hence?

For one thing, Healthcare and Biotech stocks have surged in the past three months since Elizabeth Warren fell back in the polls. Here we see that Biotech evinces the exact same three wave pattern as indicated by the Global Dow, banks, small caps, retail, autos etc.

In other words, Trump's re-election prospects are tracking social mood. And vice versa:

What people are saying about Elizabeth Warren is that she peaked too early in the polls. A year early to be exact. I suggest that's not true at all.

I suggest that Donny peaked too soon in the Dow. And when it rolls over and crashes like a Boeing 737-Max, so will his chances of getting re-elected. And then all of the super-rich will realize that they made the wrong bet. And there is not going to be another bailout.

Now let's put one and one together:

The dirty little secret of Davos 2020 is that the super-rich all need Trump to get re-elected.

But what they REALLY need are more useful idiots:

Because it's not as if their own cash is going to keep the Dow at this level:

The Last Days Of Arrogance, Greed, And Buffoonery

Somehow Trump, who has been a well known con artist and failed businessman his entire life, has convinced half the country that he is the solution to the nation's problems. When in fact he personifies everything that is wrong with America right now. His ill-fated reign will be viewed as nothing more than arrogance, greed, and buffoonery on a biblical scale. With a biblical ending to match...

What is happening at Boeing is symptomatic of what is taking place across corporate America: Greed, greed, and more fucking greed. Leading to inevitable implosion:

"The combination of arrogance, ignorance, and greed should and will haunt Boeing for eternity"

The Boeing 737 was originally designed in 1966. Until 2019 it was the highest selling commercial aircraft in history. Due to the 737 Max debacle, however, it has now been surpassed in orders by the Airbus A320. It's an old design that has been modified over and over again for decades. It's Boeing's cash cow and therefore they never wanted to replace it with a newer fully redesigned version which would require a full scale recertification by the FAA. So they just kept modifying the original design and pretending it was the same plane. The company was given a long leash to self-regulate themselves and they abused the privilege for maximum profit and minimum safety.

As of today, the plane is officially out of production for the first time in over five decades. No one has any clue when it will come back into production, because it's now an inherently flawed design.

"In one email exchange in April 2017, an unnamed employee wrote: "This airplane is designed by clowns who in turn are supervised by monkeys."

These messages refer to Boeing employees telling lies, covering up problems and treating regulators with contempt."

In February 2018, a Boeing worker asked a colleague: "Would you put your family on a Max simulator-trained aircraft? I wouldn't."

"No," came the reply."

Up until today, the damage to Boeing's stock price has been surprisingly minimal. However, today that changed.

The largest weighted stock in the Dow is now rolling over hard, taking down the World's best known stock index.

The Boeing supply chain has been decimated:

This company builds the fuselage:

Extreme greed just cost 2,800 families their income:

Trump suggested that Boeing rename the plane to solve the image problem. That way no one would know they are on a deadly aircraft designed by clowns.

"First, I would FIX this aircraft. Then, I would rename it to SuperPlane, and add some cupholders"

While we're on the topic of clowns, we found out last week that Trump informed his generals that he would never be going to war with them. And they all replied:  "We know".

“I wouldn’t go to war with you people,” the book quotes Trump as saying to the military officials. “You’re a bunch of dopes and babies.”

Getting back to the final implosion of Clowntopia:

Last year NorthmanTrader conjectured that when Boeing implodes due to arrogance, ignorance, greed, and buffoonery, so will the Dow.

Now we'll find out.

Reach For Implosion

We are witnessing an epic reach for yield, at the end of the cycle. This can't come as more of a shock. Despite a decade fighting deflation, deflation is somehow STILL the least expected outcome. Trust in central banks is complete. This will be CATACLYSMIC...

You can't make this shit up:

Two years ago at Davos, hedge fund titan Ray Dalio said that anyone holding cash would feel stupid. Within days of that comment, the market crashed into Vixplosion 1.0, making Ray Dalio look stupid. Now, two years later amid identical FOMO and 10x risk, he says the exact same thing:

"The billionaire founder of the hedge fund Bridgewater Associates said...that investors should be buying this market, rather than seeking safety in cash"

A monthly fund-manager survey conducted by Bank of America found that managers were holding on to their lowest proportion of cash since 2013"

If the guy running the world's largest hedge fund can be this consistently clueless, what chance does today's home gamer have? None.

Dalio advises a global diversified portfolio. Unfortunately, central banks have driven global correlations across ALL risk asset classes to 100%. Therefore diversification will do NOTHING in this environment. The only safe haven IS cash - the one thing Dalio advises not holding. 

The Chinese Coronavirus is already pounding Emerging Markets:

For those who want more proof this is the end of the cycle, here we see the BDI continuing its 2008 magnitude crash:

Palladium is going late cycle parabolic. This is the metal used in cars for catalytic converters, to lower exhaust emissions:

Small caps are still not confirming this rally:

The two most shorted stocks in the market are Tesla and Apple:

What the article gets wrong is that (over) valuation based upon price/sales ratio and market cap / GDP, is higher today than it was two years ago. Also, sentiment is even more extreme today (see below).

But the REAL difference from two years ago, is that Tech concentration is far higher today than it was two years ago, solely due to earnings multiple expansion:

"Nowhere is this more evident than with Apple, a stock that’s doubled in the past year with virtually no observable change in its financial performance."

In summary, those STILL trusting proven morons are going to feel pretty stupid

"As founder of the world's largest hedge fund, what I advise is everyone hold less cash"

By the way, Dalio's fund, Bridgewater, are BIG gold lovers. 

So plan accordingly, as Wall Street ignores the most deflationary environment in WORLD history:

Inflation is a consensus trade on Wall Street. Gold net speculative (long) is at record highs (lower pane):

By way of comparison to Y2K, here is another hedge fund fool smoking crack. Back in 1999 the U.S. was running a budget surplus not a trillion dollar deficit. The Fed balance sheet was unchanged. AND the Fed Funds rate was 6.5% versus 1.5%. The only thing that's the same is the Tech bubble.

The only thing legendary about today's mega investors is their decade of monetary bailouts.

Here comes (asset) deflation on a scale no one has ever imagined before. The exact opposite of what EVERYONE expects...