The masses have been led to believe that everything is going fine economically, sadly nothing could be further from the inconvenient truth. Trump has weaponized financial markets against the masses, in order to fabricate the illusion of synthetic prosperity. In the process creating the biggest and most explosive bubble in human history...
I am sure that today's "elite" gathered at Davos are more than happy to switch the conversation to climate inaction, in order to avoid discussing inaction on economic inequality, which is solely to their benefit:
Global corporations are the source of ALL global deflation. Every time corporations swap out a high wage worker for a low wage worker they create underemployment, which is deflationary. Underemployment is the biggest economic crisis of our age, but it's never discussed. Today's politicians and economists eager to show progress where there is none, constantly tout the lowest-ever unemployment rate, which conveniently only includes people who are actively seeking work. Underemployment includes those who are working part-time because they can't get full time work, those who have been laid off and forced to take a low wage job, and those who graduate but can't get a job in their chosen field - educated baristas. The underemployment problem has been rampant since 2008. And totally ignored, by everyone. Labor share of the economy:
Unfortunately, there are no shortage of low wage workers on this planet. Which is why on a global basis, there has never been anything approaching "full employment". Which is also why wages have collapsed in recent decades and will remain collapsed until this problem stops being ignored. Corporations can easily arbitrage one worker against another, one country against another. They do it every day. Central banks can't create these record low interest rates in a vacuum. Those who would blame central banks for this crisis, ignore the underlying cause of deflation, which is underemployment. They ignore the root cause, for political reasons, and of course ideological reasons. They can't bring themselves to blame the private sector for this epic disaster. Uncontrolled greed, the root cause. The number of people who benefit from this model has steadily decreased, and now they can all fit into a small town in Switzerland. where they can pretend to be fixing problems. When in fact they are the sole beneficiary of NOT fixing the problems. Central banks have followed corporate deflation lower, essentially monetizing poverty. This poverty capital has now been over-invested in every industry on the planet. A ticking time bomb, that when it explodes, will reveal the true cost of 2008. Cheap poverty capital has created more debt and has automated more jobs. It's not the solution, it's the problem. It's a deflationary death spiral. While the quantity of jobs has never been higher, the quality of jobs has never been lower. Corporations have systematically strip-mined wages, pensions, and now healthcare to continuously increase profit. What appears to work "great" at the individual company level, is a total disaster economically, on an aggregate basis. Companies are cannibalizing their own customer base through underemployment. The elimination of pensions has placed all expectations of retirement on an historically overvalued stock market. Which is why this society has invented so many fraudulent gimmicks to keep stock prices artificially inflated. First off by engaging in record debt-financed stock buybacks to reduce share count and give the illusion of growth. Secondly of course via central bank liquidity programs. Sadly, none of these short-term gimmicks will work longer-term. This is all just an epic fraud. The current mega bubble masks the underlying collapse in sustainable aggregate profits. Which peaked in 2014 on an aggregate basis. All of this fraud has culminated in the Trump Super Bubble - the largest combined fiscal and monetary financial weapon of mass destruction in human history. Bought with both hands by brain-washed masses, in the prospect of early retirement, which is forthcoming far sooner than expected. Trump has now weaponized financial markets against the masses. Human history's biggest asset bubble has artificially inflated his approval rating. In this mega financial bubble, Trump is listened to and cheered, no matter what. Human history's biggest Jedi Mind Trick:
In summary, as interest rates fall in lockstep with underemployment, the stock market is now levitating at the expense of the economy. Accelerating its melt-up as the economy marches steadily towards recession, as predicted: "The worse the reality of the economy becomes, the more we take on the reflexive belief in further and dramatic monetary expansion and the more attractive the stock market looks" When this final bubble bursts "unexpectedly", policy-makers and the herd at large will have to make an inevitable choice, to choose the economy over stocks. At that point real "valuations" will converge with economic reality. Which means that even "cyclically-adjusted" earnings projections today, are not anywhere near the realm of reality. This is not the end of another cycle, this is the end of a fraudulent way of life. Just remember one thing, "No one saw it coming".
Gamblers are super lubricated for what comes next. Because now EVERYONE knows that printed money is the secret to effortless wealth...
First, some perspective:
Emerging Markets are imploding deja vu of VixPlosion 1.0:
The leading (5g) semiconductor stocks are rolling over...
Biotech is imploding, on the right shoulder of the two year market top. Social mood is done.
Recession stocks are leading
Oil is getting shellacked:
Speculators are ALL IN Goldman is bullish
Volatility specs are leveraged up:
"A breed of systematic trader acutely sensitive to volatility is charging into U.S. stocks at the kind of pace last seen before “volmageddon” rocked Wall Street almost two years ago." “If any unpredictable but tiny shock causes a correction in the upward momentum of a U.S. stock price index like the S&P 500, systematic trend-followers are likely to rush into exiting from their current bullish trades simultaneously,” "It was a tiny yet unpredictable Black Swan event"
Today's grasshoppers are reveling in the zeitgeist of mass insanity. Seeking strength in numbers. What happens when you get to the end of the road and you have nothing left to believe in - No truth and no reality? Fear, that's what happens. Today's "value voters" are about to find out, some things should never be sold... The GOP has thrown it ALL away on Trump. All that's left is a circle jerk of rampant stupidity, which will forever define this era. The "system" based upon using people up, had to use EVERYONE just to pretend it wasn't broken. This impeachment was the last chance to save the Party. However, epic greed and asinine hubris prevented them from considering that option. Now, they've bolted the Party to an out-of-control megalomaniac...
This impeachment farce is now running entirely along party lines. Which is making a mockery of a Constitutional process. No witnesses, hence no real trial. History will say it was a Third World Kangaroo court. Nevertheless, it has had the fatal effect of directing all attention away from the real world and putting the spotlight on Circus Trump. Few if any Republicans seem to understand what is now at stake. From a markets perspective, stocks are ginned up beyond all control to create fake pre-election hype. Secondly from a system perspective, now the entire U.S. capitalist system is leveraged to explosion, as never before in history. And third, arguably most importantly from an ideological perspective - all conservative principles have been wholesale abandoned to keep a known con man in power. I used to be a hardcore libertarian, before I recognized that right wing principles were being weaponized against the U.S. workforce. After that, I wanted no part in the ongoing liquidation of the middle class to fatten offshore bank accounts. I certainly didn't want my own stated principles to be abused for evil intent. That gambit got the GOP as far as 2008 and global financial collapse. Now, the party has gone all the way and abandoned ALL of its former principles, merely to keep a known con man in power. They never knew when to stop begging for power. Now, all democratic principles have been abandoned. All fiscal principles abandoned. And all monetary principles now in the hands of a bankruptcy expert. In other words, in order to win a battle they lost the war. They squandered their credibility and ideals in every direction. All just to make bailout queens richer, at the expense of the middle class. To say that history will not be kind is a ludicrous understatement. Today's fools in the Senate have not even the slightest sense of history or perspective on how this will look in retrospect. Today's masses are reveling in the zeitgeist of mass insanity. The Republican Senate in 1974 made a shrewd calculation that paid off - to impeach Nixon and excise the cancer from the GOP. This current band of idiots just bolted themselves to a known con man. For eternity. The abandonment of principles however, is where it will really hurt the Libertarian movement. Now those ideals have been hijacked by con men and weaponized against the populace. When this all explodes, those "freedom" values will be associated with rampant criminality. Which points to the root cause of ALL problems: Selling credibility to the highest bidder. Those who truly value freedom should never have worshipped the false idol of self-interest at ALL costs. Some amount of moderation should have been in order for a festival of greed that history will regard as being nothing more than an epic Roman Orgy.
“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"
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...
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...
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:
