Rotation To Detonation

The MAGA Kingdom is imploding in broad daylight. Trump served his special-purpose of conning the useful masses. His true believers are accomplices to human history's largest fraud...

What we learned this week is that seven Hindenburg Omens on the NYSE were right after all. The Super Dumbfuck bubble is not going to crash, it's going to explode. This week, bailout whores got their eagerly anticipated bailout and they bought it with both hands. 

Where to begin:

Out of control virus

Global economy quarantined

Imploding Tech bubble 

Mass complacency

Credit collapse

Repo/liquidity collapse

China collapse

Collapsing Energy sector

No hedging whatsoever

Rampant lying about the economy

Extreme volatility

No stimulus safety net

Dumbfuck for president

Really, what's not to like?

Needless to say, the end of the cycle is the worst possible time for a hysteria-driven populace to hide under the bed. Record corporate debt has left record companies on the verge of insolvency. Now, this virus is going to set the dominoes in motion, via slow motion train wreck. Fortunately, this society has been told this is the middle of the cycle, so they don't have to worry about it. Global collapse is temporary, it will soon pass.

Meanwhile, the Fed is leaning FULL MMT already and the Dow hasn't even collapsed yet. Heli money is inevitable:

Which gets us to the Casino:

This week, the S&P backtested the 200 day moving average on the best news possible - Shanghai Accord 2.0, Fed bailout, and Joe Biden resurrection from the dead. 

And then it ALL exploded right back down to last Friday's lows today. What's left of the economic reflation trade imploded far below last week's levels amid a manic rotation to perceived safe havens. 

Here's what not to expect in the coming week: Shanghai Accord, Fed bailout, Biden resurrection, the majority of stocks holding up the market. 

Bailout whores got their bailout which they bought with both hands. They just failed to notice that it didn't work:

The story of this past week was bullish traders laid to waste in reflation trades. Treasury bond shorts annihilated. Oil longs monkey hammered and volatility shorts pounded for the second week in a row. These people can take a lot of pain apparently.

Here we see Energy stocks are back at 2009 lows:

Long term bond yields collapsed this week:

Emerging Markets have also broken last week's low:

The rest of the world failed the re-test:

Complacency remains rampant

"The sharp drop in bond yields has heightened the appeal of stocks with high dividends, and the recent selloff in the stock market has created plenty of them."

Tech was a key beneficiary of the panic out of reflation trades.

For now.

Despite two massive up days and massive inflows, "safe havens" ended the week barely above 200 day support:

You know you're an optimist when you take this home for the weekend not knowing if the next headline will take the global economy completely offline. 

The MAGA Kingdom failed the re-test:

What we saw this past week was a rotation to detonation deja vu of October 2008 during the week when the TARP bailout failed. This past week the Fed's .5% bailout exploded spectacularly. 

There is no stimulus safety net beneath the market. And as of this week there are no more safe havens in stocks. The safe havens are now the biggest bubble. 

The reign of Super Dumbfuck will be known for corruption, criminality, non-stop lying, Idiocracy, desecration, payoffs to whores...

And biblical revelation. When today's sanctimonious hypocrites wake up to the final realization that they're not Christian in any way shape or form.

They are useful idiots who got punk'd by a well known criminal. Making them accomplice to human history's largest fraud.

In an age when fraud has been normalized. 

In summary:

Hiding under the bed doesn't make problems go away, it only makes them far worse. 

Red Thursday

Any questions?

The S&P 500 is edging towards its re-test of the level it reached last Friday, however some sectors have already failed the re-test.

The Biden bounce lasted all of one day. As we see, the S&P closed at a level similar to last Thursday (circled). S&P 3000 is the critical level now, and it has been getting pounded all this week. Bears pressed into the close but were bid back by algos. In this explosive market anything could happen tomorrow. Extreme volatility is the order of the day, as it was back in October 2008. 

"On Friday, it fell to just 163 contracts—down more than 80% from a week earlier"


What could go wrong tomorrow when last Friday had an 80% drop in liquidity as more and more bulls get margined out every day by 1,000 point daily Dow point swings.

As we see from the heat map above, Financials got annihilated today.

Banks are already below last week's level:

The dollar  versus yen is getting monkey hammered by low bond yields. Last week's low is circled.

Global RISK OFF:

STILL no sign of panic selling:

The rotation to large cap Tech continues as the entire reflation trade is now bidless 

Zooming out to the weekly view we see that Transports are almost re-testing the December 2018 lows.

Remember, this is all "temporary"

This week in summary:

Chinese stocks are the strongest in the world right now.

The only stocks still keeping this gong show from exploding:

There are no safe havens in the stock market and every sector is pointing down now.   

Today was the fourth 90% down day (down volume / total volume) in the past week and a half.

In summary

"A swathe of highly indebted companies face an incipient funding shock and risk being shut out of the capital markets as the COVID-19 epidemic mushrooms into global crisis, Standard & Poor’s has warned."

There are mounting risks of a credit crunch in vulnerable sectors of the corporate bond market, potentially rocking an unstable financial edifice with record levels of debt and set off a dangerous chain reaction."

The Sum Of All Fools

Why is Bernie Madoff still in jail? He should be given a lead role in the Trump Administration. This is the greatest con job in human history without any comparison. It's all hands on deck...

Of course Trump couldn't do this on his own. This was a biblical scale circle jerk led by Faux News. History will say that Faux News was infotainment pablum for spoiled idiots who could no longer handle the truth. An entire station dedicated to brainwashing historical illiterates.

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"


I would change that to special-needs not special-purpose.

To be sure, CNN and MSNBC have devolved into politicized crap. U.S. news is by far the lowest quality in the developed world. NPR being the sole exception. The corporate versions are 100% garbage infotainment. Nevertheless, the forerunner into 24 hour brainwashing was Rupert Murdoch's progeny. What happens to every late stage empire when the inconvenient truth becomes "liberal". At that point an opportunity opens up to assure the dumbed down populace that everything is A-OK and that the widening cracks in the facade are merely a left-wing conspiracy. Propagated by commie pinkos who don't know exceptionalism when they see it.

Next thing you know, a known con man is deemed saviour. 

All of which fraud circles the toilet until the entire farce gets unexpectedly shit canned amid decade high euphoria.

Which brings us to now.

The formula for Faux News is to recycle the same myths over and over again ensuring to never question the underlying assumptions. Which is how they convinced 95% of today's economic pundits that the Trump economy is sound when it's the biggest fraud in world history: 

"Ninety-five percent of participants in a Deutsche Bank survey of investors, economists and other market participants released earlier this month said Trump, a Republican, was either “extremely likely” or “slightly likely” to win the general election."


95%. A staggering number of fools who are now convinced that printed money is the secret to effortless wealth.

No stimulus safety net for the first time in U.S. history. Featuring the lowest global interest rates in world history.

Borrowed GDP at 5% and a fully monetized deficit at 5%. For a total 10% of pro-cyclical stimulus. Unprecedented. 

A Coronavirus raging out of control.

No sign of hedging.

A society euthanized by central bank dopium. Fully Japanified. 

But most significantly, amid record low interest rates and excessive risk taking is the overwhelming desire to monetize poverty. The conditioned response to believe that global deflation is a buying opportunity.

The entire developed world economy now put at risk due to a conditioned zeal to believe that extant poverty is a financial opportunity. 

The greatest economic issue of our time - underemployment, is never even discussed. The continuous factory churn of quality jobs into the lowest quality junk jobs in modern history. The quiet and yet incessant conversion to a Third World economy. In broad fucking daylight.

Embraced by an Idiocracy celebrating the surfeit of crap jobs as labor share of the economy collapses to all time lows. Conditioned to believe solely what they are told to believe. By 95% of pundits, all of whom are brain dead. 


Now featuring an entire society conned to believe that they can ALL retire via a zero sum Ponzi scheme.

Conned by a known con man. The Creator's retribution for desecration. We can only assume. 

What comes next will be beyond description. Beyond words. Trump's approval rating will collapse like a cheap tent. Bernie Sanders will rise with every tick lower in the imploding Dow Casino. 

Fear will be extant. Compounded ten fold by the Corona plague and the incipient lurch towards global depression. An old age home hiding under the bed. Probably too afraid to even come out and riot like all good societies would do. 

Of course central banks will panic and flood the crash site with liquidity. However, the fuselage will be destroyed. It will be like pouring gasoline on a roaring fire. The sheeple will lose all confidence in central banks. 

QE will be flaccid. 

At some point - who knows exactly when - they will pull the trigger and unleash MMT for the masses. Free money flooding the money supply.

That will feel good for a biblical moment maybe a while even as the slack from deflation slowly dissipates. At first people buying foodstuffs and essentials. However, eventually prices of investment-grade items - homes and cars will reverse higher. And eventually they will explode higher, at which point today's fiat currencies will be destroyed. Rendered down to wheel barrow money.

What these morons do after that is a story for another time. I predict a barter economy aka. human history's largest yard sale. With enough stored corporate crap to keep markets saturated for the next 100 years. 

Brace for wholly unforeseen hardest landing.

The Last Bailout. For The Rich.

I said this week would be biblical, so far so good. The next item on the agenda is to "retest" the MAGA Kingdom and all of Trump's innumerable lies. Don't be surprised when the retest explodes spectacularly. Socialism for the rich ended spectacularly yesterday, leaving no bailout safety net below the casino for the first time EVER. It's called "Trump-o-nomics", the removal of all safeguards prior to self-implosion. Now, in the American tradition, it's time for rich man's panic...

But first, I came up with a new graphic to explain today's fog of bullshit which has been tremendously exacerbated by the Coronavirus. Today's "pundits" are using the virus to explain away all manner of globally imploding data as "transitory". Far worse yet, they are now using the resulting depressionary record low interest rates to justify today's asinine stock prices. It's a manic reach for implosion at the end of the cycle. 

What I call the "Finance of Implosion" aka. what they don't teach you in business school:

If someone had predicted one week ago that the Fed would cut half a percent and Joe Biden would be endorsed by Klobuchar, Buttigieg, and NOW Mike Bloomberg. Would anyone think that the market would be lower than it was at this time last week?

Probably not
(Updated at COB Wednesday)

The two biggest back to back up days in ten years. The biggest rallies are in bear markets.

The algos made a lot of money this week rinsing weak hands in both directions. Temporarily obscuring the fact that the true direction is down:

Getting back to socialism for the rich, one of the tried and true caveats of the stock market is the concept of the "retest". Whenever the market makes an important bottom it can't be fully trusted until it's retested. For example, last week's v-bottom on Friday morning has yet to be retested. The VixPlosion in February 2018 was retested four days later, and held at the 200 dma.

Unfortunately this time the casino blew through the 200 day.

Which means that Trump's last week call to 'BTFD' is now the last line of support. Below that there is no support until we get down to his other famous 'BTFD' call in December 2018.

I think we all see where I'm going with this. A whole lot of bullshit is about to be re-tested for its trustworthy nature.

Zooming out to a wider timeframe, we see that the December 2018 'BTFD' and Fed bailout is the LAST line of support until we hit the pavement sans bailout safety net.

And interestingly that level was NEVER re-tested. And hence it can't be trusted to hold. 

Obviously

After all, who with an IQ greater than 5 would trust Trump? 

Everyone knows he's a con man.

Any questions?

"They told me low interest rates are great for stocks"

Fed chief Powell feeding the bailout whores yesterday:

Trapped In Trump Casino

What we are witnessing in real-time can only be described as a biblical magnitude gong show. Led by the most morally and mentally challenged leader of our lifetimes...

Today, central banks officially lost control of Trump Casino. What comes next will be epic panic.

Doh!

Today, the Fed squandered .5% of their 1.5% dry powder merely to appease Trump. At first, the G7 meeting release said that no specific stimulus was approved at their 7am emergency meeting. However, immediately Trump got on Twitter and castigated the Fed for not lowering rates. The next thing you know, the S&P went vertical.

Basically, Trump got on the phone after the G7 meeting, called up Powell and said lower rates .5% or "you're fired". 

The rally was so short that if you went to the bathroom you missed it. The new "Shanghai Accord" rally had a shelf life less than :15 minutes. As soon as the market spiked, it got sold instantly in massive size. The day's range was 160 S&P points, which is roughly 1500 Dow points.

Which completed the latest counter-trend rally:

The Trump gong show reached new all time asinine levels today. A very likely fatal dose of idiocy for the MAGA Kingdom. 

What we witnessed today was the total loss of faith, confidence and trust in central banks. Which was squandered to appease a narcissistic madman in existential fear of not getting re-elected. The greatest abuse of economic policy in U.S. history.

What comes next will not be pretty. For ten years straight, markets have been well-conditioned to wait for central bank bailouts. Today, they got the BIGGEST bailout since the darkest days of 2008 and it imploded spectacularly.

Here is the damage assessment going into tomorrow sans bailout. 

What I predict next is Super Vixplosion, which will trigger the thermonuclear stage of Super Crash.

Here we see the hourly volatility of the S&P 500 is through the roof. The machines CANNOT handle what comes next. It's as simple as that.

Here we see that the "low volatility" safe havens closed below the 200 day moving average. We also see that each selloff has become more and more violent in terms of volume and volatility:

Microsoft traded like a brick today. The world's most overowned mega cap got monkey hammered back below the 50 day:

Trump is not capable of understanding what he did today by forcing this rate cut. The $USDJPY carry trade imploded today.

Higher U.S. rates have been America's largest source of capital. Without them money flows out and asset values fall. 

Carry trade implosion has triggered global RISK OFF sell everything mode every time. Multiple times it put the S&P futures limit down overnight. In August 2015 (smash crash), Brexit (June 2016), and Trump's election (Nov. 2016). 

Long-term Treasury bond yields went into free-fall today reaching new levels of Japanification, while financials went bidless:

By pushing U.S. interest rates lower, what the Fed/Trump did today was create a MASSIVE tsunami of global deflation.

A competitive devaluation.