Impeachment Supernova aka. Peak Bullshit

Central banks and weak-handed short sellers are competing to drive the impeachment supernova parabolic. This delusion is running on MAGA glue fumes. If I were to devise a biblical con job, it would be exactly what Trump is doing and saying right now, only not nearly as good...

A decade of monetary bailouts have created the largest divergence between fantasy and reality in world history. All under the well-conditioned gambler belief that bad news is good news, worse news is better.

As always, the burden of truth remains on the truth. History will say that a fatal addiction to ignorant and arrogant bullshit was the end of the Republican party.

The grand finale version of history will go like this:

At the end of the longest expansion and bull market in U.S. history, the economic tank was totally out of gas. The Trump tax cut and attendant mega deficit had boosted bond yields sending the Dow down -20% from peak to trough in 2018. Under extreme coercion from Trump, the Fed pivoted to full easing mode. They called it the "mid-cycle adjustment" coming at the end of the longest expansion in U.S. history. No one questioned it. For a time those three rate cuts kept stocks bid, however, by mid-2019 the bill came due for the tax cut, via record bond issuance. The overnight "repo" lending market collapsed. The Fed stepped in to take over the entire repo market. In the event, the Fed fully monetized Trump's deficit, creating a combined 10% of pro-cyclical fiscal and monetary stimulus. Unprecedented in U.S. history. Stocks skyrocketed, creating a massive divergence with the underlying economy. Valuations reached record levels By the end of 2019, the market was the most overbought in almost fifty years. Amid non-existent pullbacks.

By late January 2020, the Fed rocket ship was starting to lose thrust, just as the Coronavirus broke out in China. The world's second largest economy was on the ropes after two years of trade wars, Hong Kong riots, and global deflation. The PBOC injected massive stimulus into markets creating the blow-off top for global risk, led by Tesla which was the most shorted stock in the world.

All of which gets us to this week. Last week I described the various combination of historical crashes that rhymed with this impending super crash. In particular I said that VixPlosion 2.0 was imminent. Of course, when the market opened this past Monday, the PBOC delivered their monetary adrenaline injection which has put a bid under the most beaten down global markets.

Be that as it may, this latest bailout rally has been extremely uneven. Leading mega cap software stocks saw almost no pullback last week. Whereas economic cyclicals crashed. Which is why now, Microsoft, Tesla, and a handful of other massively overbought names are making new bubble highs, while the rest of the market is lagging. Central banks have succeeded in creating market concentration on a scale never before witnessed.

As I write on Wednesday morning, the overnight futures are vertical bid for the third day this week, back towards new S&P all time highs. The Nasdaq hit a new high yesterday.

There is extreme biblical irony in the fact that MAGA has succeeded in decimating the oil industry while the world's leading alternative energy stock goes parabolic.

Which is a minor preview of the paradigm shift that is about to come:

What we have now is a bear market ex-Tech, and a recession ex-deficit

The Age Of Criminals Is Ending

No, they don't see it coming...

Our only protection from record criminality, is record criminality. Those currently being eagerly robbed blind, are merely paying into "the system". Don't expect them to be too happy when they find out they voted for it.

AGAIN.

When George W. Bush got elected in 2000, many people were willing to give him the benefit of the doubt, despite the fact that his personal and professional life were squalid at best. Maybe he was Born Again, after all. However, after it was revealed that his administration had fabricated the reason to invade Iraq, Bush's re-election in 2004 was no excuse. Pure criminality. Of course, all of his record fraud blew up in their faces in 2008.

Fast forward, and we are seeing the exact same fraud all over again. Except of course 10x worse. Because that's what happens when criminals are not held accountable. They resort to far greater crimes. The fact that Trump's popularity among Republicans is at an all time high, demonstrates the depth of depravity within that party.

Reagan's tax cut raided Social Security and Medicare, both of which were in surplus at the time, the absconded funds were replaced with worthless IOUs. Bush's tax cut did the same thing - took real money from people's paychecks, handed it to billionaires, and replaced it with worthless IOUs. Trump, did the same thing, which is why in this same year that Social Security is no longer in surplus, those worthless IOUs will now require Treasury debt issuance. Because guess what, the IOUs themselves are WORTHLESS. 

"Asked if entitlement cuts would ever be on his agenda, Trump responded, “At some point they will be.”

Only in the United States are deductions from worker paychecks called "entitlements". That's the term criminals use when they are getting set to plunder the Treasury. In every developed nation, those deductions are called retirement programs, and they are protected from criminals.

Now of course, left to the Keystone Kop Democrats, Trump could not only get re-elected, but he would then finish the job of plundering the U.S. Treasury in his rapacious second term. He would certainly get re-elected if the election was today with his approval at record highs, and the Democrats still not knowing who won Iowa. 

However, Trump's criminal abuse of borrowed and printed money, aka. his MMT (Modern Monetary Theory) financial weapon of mass destruction is very similar to GW Bush's subprime WMD - both were born of unfettered criminality. And just as in 2008 I bet with both hands that Bush's WMD would explode, I am betting today with both hands that Donny's WMD will explode. In other words, our only protection from record criminality, is record criminality.

Now that one record over-leveraged stock is powering the Nasdaq to new bubble highs, we can assume we are well along in the process.

Picture Millenials accidentally imploding the super index bubble. Fantastic irony. 

You have to wonder, what kind of people keep electing criminals over and over again. 

Clearly the kind that enjoy being robbed.

Buy The Fucking Meltdown

Global pandemic imploding the world's second largest economy. Trump taking credit for recession. Democrats can't find their ass with both hands. Millenials selling everything to buy Tesla. Three Hindenburg Omens in one week. An entire society in narcoleptic coma. What's not to like?


It's all fun and games until someone loses an everything.

Historians will say that an entire society lost their minds at the end. A decade of central bank sponsored delusion ending in mass delusion. Go figure. 

The machines can't handle RISK OFF in the Nasdaq Tech bubble, now concentrated in Tesla and Microsoft

And the central banks are out of ammo

Which is why for anyone still possessing any sanity whatsoever, meltdown is the base case scenario.

As hard as that may be to believe, amid rampant non-stop bullshit.

"The poll, released on the eve of a likely Senate vote to acquit him on impeachment charges and at the outset of an election year"




Prepare for impeachment

The State Of The Implosion

Updated: Tuesday Feb. 4th, 11:00 am

Fittingly, the fate of the casino now hangs on Tesla and the Iowa Caucus. Meaning Millenials...

Millenials chased three bubbles en masse in the past two years. However, only this last one has the ability to implode the Nasdaq. 

The Circus is getting set to explode at all time highs. There are times when it's difficult to be bearish, this isn't one of them. We are seeing record insanity in every direction. We still don't have Iowa Caucus results due to glitches in the vote counting system. Fortunately, Democrats never win elections, they merely wait for Republicans to spontaneously explode from greed, corruption, and buffoonish over-confidence. If they had to actually win an election, it would never happen.

This is the historical view of this moment in time:

"No one saw it coming"

The global casino was rescued overnight by another massive intervention by the PBOC.  Based on stocks alone one would have no clue that the virus is spreading out of control. Based upon EVERY OTHER asset class, it's a totally different story. We're only waiting for Tesla to roll over now.

Tonight, Herbert Hoover will give an update on the State of the Ponzi Scheme. Tomorrow, the Roman Senate will acquit him of record corruption.

Biblical meltdown from all time crack highs can't come as more of a surprise: 

“I’m proud to declare that the United States is in the midst of an economic boom the likes of which the world has never seen before”

"We've never seen this before"
"Fantastic"

We are seeing a level of two-way volatility that one would expect at an explosive top.

Here we see what is taking place via the S&P futures.

After the Corona Monday (Jan. 27th) reversal a week ago, the casino rallied back in a three wave retracement through last Thursday (Jan. 30) capped off by the WHO upgrading Coronavirus to a global pandemic. Then, another leg down on Friday that stopped at the 50 dma. Followed by this latest steeper yet shorter three wave retracement. 

One week to nowhere:

Here is the Nasdaq regular session at Tuesday open:

Tesla is becoming the Nasdaq:

"There’s been a huge rush of new investors buying over $700 via Robinhood in the past day. On Monday, 12,000 Robinhood accounts bought it for the first time. It’s a one-stock mania. Electronic trading systems love to interact with this retail flow. Dollar trading volume in ‘TSLA’ on Monday was a record for an individual stock"


As of 10:45 am Tuesday, Tesla dollar volume exceeds the combined dollar volume of the next ten symbols. Within big cap Tech, only Microsoft is making new all time highs

Today's Tesla moonshot is compliments of Tesla's biggest bull tacking on a ~1,000% price target over yesterday's closing price. In Y2K it was the same thing, Wall Street morons tripping over each other to raise parabolic price targets. It ended in lawsuits.

And of course a super crash. 

"MarketWatch sat down with Wood in December for an extensive discussion about how she and her team, who are active managers of a suite of exchange-traded funds, value innovation. In that conversation, Wood called ARK Invest a “deep value manager,” and in her open letter to Musk in 2018 she called Tesla a “deep value stock today.”

More insanity later in the day...

Bernie Sanders: Nightmare On Wall Street

"They were buying the Coronavirus with both hands when they got monkey hammered by Bernie Sanders. No one saw it coming..."

A win by either Bernie Sanders or Elizabeth Warren is bad news for Wall Street. Regardless of who wins the Iowa Caucus, markets are going to impeach Trump in short order, bringing about a margin call in gamblers' love affair with rampant criminality. One they can't afford to meet. 

Prepare for a new kind of Shock Doctrine. The kind that permanently stains underwear.

As the title suggests, "Shock Doctrine" is a policy used to exploit cataclysmic events, for fun and profit. Klein describes U.S. foreign economic policy mostly towards Latin America, however my view is that these same hyper-fascist principles have now been employed systematically against the U.S. populace over the past twenty years since 9/11.  What do I mean by shock doctrine principles? I mean mass layoffs, outsourcing, automation, and cheap capital to backfill demand. Essentially swapping out the middle class for a mega debt bubble. Here we see via the labor share of capital the carving out of the middle class:

What I am suggesting will happen on the other side of this cataclysmic crash will be shock doctrine in reverse. Instead of a pivot towards even greater corruption, this time there will be a wholesale revolt. 

Not to say I agree with Bernie on all of his policies. Although I certainly agree on his values. Nor would he even be able to pass many of his ideas, since the President alone is highly limited on their ability to pass economic policies without lockstep approval of the House and Senate. Nevertheless, the ideological paradigm shift is set to massively accelerate.

As I write, it appears that Sanders could win the Iowa Caucus, which would give him momentum for New Hampshire where he would be heavily favored. 

"Sanders’ events, at least the two big ones this week with musicians, are large and electric, that Biden’s are small and sleepy, and that Warren and Buttigieg’s fall somewhere in between."

Sander's supporters are as loyal as Trump's but a lot younger. We are now about to see a showdown between labor and capital that has been long overdue. And the true elites are starting to shit bricks over the thought of it. Because their Manchurian Man of the People is no longer keeping all of the masses conned. 

"Investors famously hate uncertainty. And it's hard to imagine something that would cause more uncertainty to the capitalist system than electing a self-proclaimed democratic socialist who is calling for a political revolution. Sanders wants to ban oil and gas fracking, break up big banks and institute a wealth tax"

They forgot to mention healthcare, which would be one of the most impacted profit sectors.

Pundits are looking at this race altogether wrong. Sanders and Biden are consistently the two leading candidates with Warren and Buttigieg now a distant third and fourth. Combining Warren and Sanders' odds give the TRUE probability for a paradigm shift. Because Biden has to beat BOTH to maintain status quo. 

According to the lastest Iowa poll:

Needless to say, hurricane Bernie is not "priced in" to the casino. Neither is Elizabeth Warren. Quite the opposite, because when Elizabeth Warren fell back in the polls last Fall, pharma and healthcare stocks went parabolic.

Now however they are rolling over on the right shoulder crack high:

Banks were already weak before Bernie surged in the polls.

And Energy stocks need no assistance going bidless, because despite a handful of lingering denialist nutjobs, the majority of responsible human beings realize, it's game over man.

Global capital is rotating AWAY from big oil in record size:

“I’m done with fossil fuels ... they’re just done. We’re starting to see divestment all over the world,” Cramer said. “You’re seeing divestiture by a lot of different funds. It’s going to be a parade. It’s going to be a parade that says, ‘Look, these are tobacco and we’re not going to own them.’”

Exxon is at decade lows and bidless:

And who is benefiting from this massive rotation out of oil?

Tesla just traded the equivalent dollar volume of ALL of the trillion dollar tech companies combined. Yes, you read my prior post and this right.

Tesla by itself - up 20% today - is a bubble of the same magnitude as big cap Tech:

This is one type of paradigm shift, however the fact that Tesla is now driving the Nasdaq, portends a much larger paradigm shift about to take place.

In summary, denialists are in for a paradigm shift

Conflict Of Implosion

Everything is RISK OFF right now, EXCEPT Return on Imagination. Go figure. We are witnessing the pump and dump of the century...

In historical hindsight, the Trump era will be known for one thing and one thing only - MAXIMUM fraud and corruption. It will be the new "gold standard" by which all future fraud will be measured against. Instead of a Roman Bacchanalia, it will be a Trumptopian Bacchanalia. Ten times the debauchery...

It was only a matter of time before the decade of monetary bailouts and magical thinking gave way to a cult leader who was 100% fraudulent. Return On Imagination (ROI) has never been higher.

The "new normal", that's what today's EconoDunces call this central bank vacation from reality. It's the new abnormal. A period of time when insanity has been normalized. To be skeptical of Disney markets is to be deemed heretical. A financial Unabomber. That's what I am for even questioning printing money to bid up stocks. Who do you think you are questioning PhD economists? 

Into this con man's paradise walks Trump who can say whatever he wants to his admiring followers, and they believe it. NO ONE else can get away with that amount of deception. He does it every single day. Due to non-stop lying we are wholly desensitized to non-stop lying. Which is why the economy has continued to steadily erode in the background. We are told that the greatest economy in U.S. history is going fantastic. All it needed was 5% of plundered GDP, without which we would be deep in recession already.

People are now taking a known sociopathic liar at his word. A very dangerous game to play. 

And seeing this level of successful fraud has given license to copycat fraud. Particularly in markets, where the SEC has been neutered. GW Bush did the exact same thing, he basically shut down the SEC. Out of which ideal ecosystem for criminality were born exploding subprime CDOs, shocker.

Now, we see this MASSIVE disconnect between stocks and bonds. And why is there such a disconnect? For one thing, because bonds are priced based upon economic reality, whereas stocks are priced based upon Return On Imagination. Which has never been higher.

One thing today's bagholders STILL haven't noticed is that stock buybacks peaked over a year ago with the average stock. Which means record insider cash outs at public expense:

But the question on the table is why is the U.S. going through its second Tech bubble in twenty years? And the answer is because Tech companies are the locus of the IPO market. And hence Wall Street needs as much hype and capital focused on Tech as possible to allow for maximum pump and dump. We saw this in spades back in Y2K - boatloads of profitless crap dumped into public markets. Now, we are seeing it all over again. Except instead of small companies that are profitless, we are seeing massive "unicorn" billion dollar companies that remain profitless getting dumped into public markets.

A bubble in Tech AND a bubble in profitless IPOs, does anyone make the connection? No.  2019 was the least profitable year for IPOs since the last mega Tech bubble:

The range of companies pumped and dumped in 2019 ran the gamut from unprofitable unicorns (Uber, Lyft, Peloton, Pinterest, Slack etc.). To REVENUELESS Biotech. And of course cloud internet companies.

At this late stage ALL major markets are RISK OFF: Oil, Emerging Markets, Currency Carry trades, bond yields.

Interestingly, the only market NOT risk off YET, is Return on Imagination.

Keeping gamblers in a super Tech bubble and in the stock market in general twenty years ago was not an accident. And it's not an accident now. It's business as usual.

This Idiocracy is about to learn the same lesson I learned twenty years ago. It's called, "conflict of interest".

One thing for certain - this is not Y2K.