COVID Is The Solution, Not The Problem

The hairless monkeys were never going to change their ways without some inducement from Mother Nature...

As long as our fate was controlled by a segment of the population using their addiction to selfish ignorance as the rationale to do nothing, none of humanity's problems was ever going to get resolved. 

On the alt-right, every human problem is a hoax and every solution is a conspiracy. A conspiracy intended to force them to change their perfect way of life. Heavy assault rifles and gas guzzlers forever. COVID is their latest obsession. We are now told that the entire human race is engaged in a conspiracy that includes everyone, EXCEPT the biggest dumbfucks on the planet. And their denialist saviour, King Donny. 

Right.

The only true conspiracy - believed by everyone except dedicated cave trolls - is the concern for those other than themselves. A friend of my father's, around the same age (80), says that his evangelical son is one of these COVID deniers. He told his father it's all a big hoax. Statistically, for someone over 80, the chance of dying from COVID is 30%. For someone under 50 it's de minimis. What the son is telling his own father is fuck you Dad, I'm ok. The mantra of the entire conservative movement.

Now, if this corporate Idiocracy wasn't so plug stuffed on GMO Frankenfood, and the fattest generation in all of human history, then the lethality from COVID would be far less. The largest risk factors beyond age, are all lifestyle related: smoking, obesity, diabetes, and high blood pressure. Coincidence? I think not. This virus selectively preys upon corporate addiction and ignorance. The very people who believe it's all a hoax, are the ones most at risk. It's natural selection at its finest.

This species, living on the only known habitable planet in the entire universe has a proven unwillingness to change its ways, except in the most dire of circumstances. While the accumulation of centuries of wisdom collects dust on library book shelves, the Idiocracy at large takes its education from South Park, and its news from Sean Hannity.

Laziness, greed, materialism, selfishness. These are instincts endemic to the human condition. Religion was invented to curb humankind's worst instincts, so we would not come to believe that Roman orgies are commonplace. However, Mother Nature is far less forgiving of those who seek to merely recycle their sins every Sunday morning, emerging refreshed for another week of unhinged debauchery. Not that the "system" doesn't have its appeal to those who seek to NEVER change their ways, and yet still get a good night sleep.

All else being equal, the COVID deniers are right about one thing - which is that the derivative impacts of this pandemic lockdown will linger far longer and have far greater human impact than the virus itself. Consider that the current U.S. death toll of 200,000 equates to roughly 11-12 days of average total deaths in the U.S. In true context, it's a small number. However, add in the devastating derivative impacts of mass unemployment, poverty, delayed medical procedures etc., and the secondary impacts will dwarf the direct COVID deaths. In the Third World - already at the margins of existence, the derivative impacts will be multiplied many times over. 

Now however, factor in the longer term outcomes from this forced reset, such as forcing new behaviors around consumption and carbon footprint. Such as a forced examination of the inequalities of Globalization. One can make the case that COVID is saving the human race from itself. Mother Nature is saving the human race from its vast store of idiots. Who have been protected from reality for far too long.

It's the inconvenient truth.

Doubled Down. On The Bigger, Fatter, Uglier Bubble

Gamblers just doubled down on meltdown. Why? Exceptional bullshit, what else?

Let's see:

Y2K Tech wreck

Looming 2008 credit crisis

Economy imploding

Political impasse

Existential election

Sidelined Federal Reserve

IPO pump and dump

What's not to like?

King Donny announced this week that he won't guarantee a peaceful transition of power if he loses the election. He will be emperor for life. Over the past four years, Banana Republicans have wholesale abandoned all principles of democracy and now even the appearance of one.

Either way, Trump's presidency is in its waning days. If the Democrats merely maintain control of the House, his ability to do anything as president will be stymied. If the Democrats win the House and Senate he will be impeached and removed from office. Which is why he is inciting his base to civil war in five weeks. He knows that time is running out for his circus:

 

"Trump's intransigence, included in his latest assault on perfectly legitimate mail-in ballots on Wednesday, posed a grave threat to the democratic continuum that has underpinned nearly 250 years of republican government"

As if to imitate the ongoing political circus, the markets are in their own Twilight Zone of exceptional bullshit right now. 

This article does a very good job of describing the current level of risk: Extreme realized volatility attended by extreme complacency.  

So far...

"By one measure [# of days with 1% move or more], the Nasdaq 100 is having its second most volatile month in 18 years"  

There are other signs that speculative activity remains elevated. The largest exchange-traded fund that tracks the Nasdaq 100 Index saw its total open interest rise to 10 million contracts at the end of last week, the highest since 2007"

In other words, gamblers are loading the truck on the Nasdaq 100 at the fastest pace since the 2007 market high, during the most volatile period since the Dotcom bust.

What could go wrong?

So far this week the BTFD team has been buying every dip, amid an accelerating decline. 

Picture what happens when they actually start selling.

Skynet will explode.

For those who are wondering why this current level is so important, wonder no more:

The Nasdaq has pounded the 50 day moving average (blue line) from the top and now the bottom. What once was support, is now resistance. It's another -10% lower to the next level of support:

Today's rally was compliments of Tesla which bounced off its 50 day moving average for the second time since the early September peak. We saw this same movie back in March. When Tesla broke through the 50 day, the wheels came off the market bus.

Stay-at-home bubble leader Zoom Video posting a double top deja vu of early September:

Trump's primary election strategy is to blame China for all U.S. problems. Having made a lifetime career out of blaming everyone but himself.

It never once occurs to Donny that U.S. stocks are 100% correlated to Chinese stocks, and he needs a strong stock market for this election. Banana Republicans are about to discover the downsides of having a mentally challenged president, from birth:

Small caps deja vu:

The "safest" stocks have the clearest and most lethal wave count. 

Gamblers are leaving Trump Casino. 

Pockets empty.

In summary, we're in a bigger, fatter, uglier bubble.

And it's set to explode.

Feels Like Fall 2008

It's the end of the cycle, which means a 2008-style credit crisis is imminent. Unfortunately, today's criminalized financial pundits can't admit that fact, because that would doom the MAGA Kingdom, and the greatness that derives from following lying circus clowns...

This period of mid-September to mid-October ahead of the 2008 presidential election, was the third wave. Down...

Any questions?

There are only two kinds of people in this world right now, realists and denialists. MAGA fiends of course are not the only denialists, merely the most dedicated. At present, denialists outnumber realists by 100 to 1. Of course things were actually going far better in late September 2008 than they are right now. Never before has so much stimulus been used to hide a depression as right now. A 15% of GDP deficit to achieve -5% GDP growth. Because we have to be in a recovery, otherwise the MAGA Kingdom is doomed. This is our "future", using ludicrous levels of stimulus to pretend that recessions no longer exist. 

The Fed was just as clueless back in September 2008, however they still had ample fire power, which is not the case now.

NY Times

How the Fed misread the 2008 Crisis

"On the morning after Lehman Brothers filed for bankruptcy in 2008 [Sept. 15th, 2008], most Federal Reserve officials still believed that the American economy would keep growing despite the metastasizing financial crisis...the Fed’s policy-making committee voted unanimously against bolstering the economy by cutting interest rates"

Then the wheels came off the bus, and the rest is history.

Historians will never understand the level of complacency taking place right now. Of the many differences between then and now, one key difference is this massive speculative bubble which is unraveling in real-time. Another key difference is the number of weekly jobless claims which has exceeded the maximum 2008/2009 levels EVERY week since March. 

It's insanity. As usual.

Which gets us back to Trump Casino:

Monday early morning (~3am Eastern), the futures had been idling along fairly flat, and then all of a sudden they imploded just prior to the European open. Global banks got pole axed by allegations of widespread money laundering taking place over the past two decades.

Monday's U.S. session gapped down at the open which was followed by the obligatory all day BTFD rally. However, the buying was confined entirely to the Tech sector, as the other 10 out of 11 sectors were all down. Ex-Tech, it was a 90% down day. Desperate speculators are now throwing caution to the wind and piling into the last vestiges of the Tech stay-at-home rally.

I listened to a Tech stock analyst on Bloomberg yesterday who sounded like she was not around in Y2K. From what I could tell, she was in kindergarten. She was recycling the same false platitudes that were deployed in that era to keep the bubble going. Tech is the future, there is no future without Tech, valuations don't matter etc. For those of us around in that era, it was all a massive lie to accompany a massive pump and dump of junk IPOs. Similar to what is taking place right now.

Among the leading stocks yesterday, as usual was Tesla, the continuing leader by far in Nasdaq active dollar volume. However, today is the Tesla shareholder meeting aka. "Battery day". After the close last night Elon Musk tweeted that most of the new innovations are two years away from being monetized. Which is why the stock is selling off pre-market. As we know, Tuesday's are the best day of the week in Trump Casino. So anything can happen. 

That said, WHEN not IF Tesla rolls over hard, it will final implode the Nasdaq:

But here is the big difference between now and Y2K:

In this era, the so-called safe haven stocks are the weakest stocks in the casino. Which means there are no safe havens outside of cash aka. money markets/t-bills. T-bills being the safest on a relative basis.

Here we see on the S&P 500, using February as a guideline, a gap down Monday and then the 200 day was taken out by the end of that week.

This is not a prediction, merely an observation that the casino is heading in the same direction, at the same rate. This time, I doubt the 200 day will hold for as long as last time. We will soon find out.

For those who are wondering how close we are to a bottom so they can play the Ponzi Casino from the long side, I suggest not yet.

The Last Trump Casino Bailout

I think we all see where I'm going with this...

The Fed made it clear last week that they will be on the sidelines until after the election - which is their standard policy around election time. When the casino imploded in the fourth quarter of 2018 ahead of the mid-term elections they did nothing. In fact, they continued reducing the balance sheet which only made the decline far worse. Which means that today's gamblers are sky-diving without a parachute. 

The Fed also reiterated last week that they believe a fiscal stimulus package is far more important than any additional non-existent monetary stimulus. They didn't actually admit that monetary policy is entirely depleted from an economic standpoint, but with rates at 0%, sans fiscal package to monetize, it's entirely depleted. The Fed also knows that quantitative easing alone merely creates asset bubbles with negligible economic benefit and substantial asset crash risk. Which is likely why the current rate of expansion of the Fed balance sheet ($120b/month) is only running at about one third of the annualized deficit ($3.7 trillion). One could argue that net issuance of Treasury debt is having a tightening bias on credit markets by roughly double last year's repo crisis amount. 

Recall that going into this past summer, gamblers were hanging their reflation hats on another fiscal stimulus package.  And yet when it never arrived, they never stopped believing in fake reflation. And that's because today's top economic cheerleaders particularly in the White House all believe the economy is getting better, hence another economic stimulus package is not needed.

Not everyone agrees. 

"Small businesses are disappearing. Unemployment claims remain unbelievably high. And state and local budgets are imploding. Yet Congress is likely to skip town this month without providing additional emergency aid to the economy, according to Goldman Sachs.

"At this point, a major stimulus package before the election looks like a long shot," Goldman Sachs economists wrote in a note Friday"

"The economy seems to be running out of steam in the last few weeks...Recent data have reinforced an overwhelming view among experts — including Fed Chairman Jerome Powell — that more stimulus is urgently needed from Congress."

All of which means that deja vu of their last election rigging gambit in 2018, the Trump circle jerk has once again reached premature electoral elation.

Compliments of record bullshit. 

"the current dollar net speculator position has dropped to the most bearish standing since November 28th of 2017, a span of 146 weeks"

“Gold should be trading higher on safe-haven demand but it’s kind of a repeat back like in the spring when the market sell-off comes, market participants have been selling off assets across the board,”

The Most Expensive Rigged Election In World History

The inconvenient truth of the past four years is that Banana Republicans have become far too addicted to rigged markets and rigged elections. Corruption is a slippery slope, especially for the morally compromised. Going into this 2020 election, The Grand Old Circle Jerk is record lubricated for what comes next...

Four years ago this week, Trump warned that the Fed's "big, fat, ugly bubble" would burst as soon as Obama left the White House. That never happened, however due to his exceptional "skill", Trump went about increasing the size of that bubble by orders of magnitude. No one in the Republican camp apparently sees that as a problem. Why? Because the double standard between what a GOP president can get away with versus a Democratic president stands at a now ludicrous level.

Heading into election at this same time in 2016, the stock market was sagging. The momentum deflation trade was rolling over and the cyclical trade was lagging as global Brexit stimulus waned. Clinton was far ahead in the polls and looked all but certain to win the election. However, on October 28th 2016, days before the election, the FBI sent a letter to Congress stating that new emails had emerged from Clinton's private server back from her days at the State Department. She tanked in the polls. On the eve of the election the FBI closed the investigation, but it was too late the damage was done. On the night of Trump's improbable election, the futures crashed in Europe when it was announced he was elected. However, the Trump Team very quickly made it clear that they would be highly pro-Wall Street and that a big fat tax cut was on the way. By morning U.S. time, the futures were green. So began a 14 month straight line vertical rally into the tax cut.

Trump's approval rating peaked on the day of his inauguration in January 2017, but then it quickly crashed when it became clear that he was a circus clown of biblical proportions. When Trump fired FBI Director Comey in May 2017 and it became clear that the Russians had helped him win the election, his approval hit rock bottom. The Mueller investigation was launched. Trump spent most of 2017 doing everything possible to destroy Obamacare with the goal of freeing up that money to fund a massive tax cut for the ultra-wealthy. In late July 2017 however, his efforts to fully dismantle Obamacare were thwarted by John McCain who voted no to disabling the Act, while on his deathbed.

Undaunted, Treasury Secretary Mnuchin announced in late August that the tax cut was the next order of business. In what would be an eerie precursor to the 2019 repo rally, stocks ramped into the end of the year 2017. The week the tax cut came into effect, at the beginning of February 2018, the market crashed. It was called VixPlosion - the fastest spike in the VIX in history. 

As expected by Republicans, their tax cut was skewed entirely to the wealthy, while interest rates rose for the middle class. However, to make the tax cut appear FAR larger for the middle class and thereby to rig the mid-term election, Mnuchin had ordered the IRS to reduce paycheck withholdings. A mass deception that would not become widely realized until tax season 2019. 

January 10th, 2018:

 "The IRS is facing its first big challenge implementing the new tax law: deciding how much in taxes to withhold from millions of Americans’ paychecks. The agency is under pressure to take as little as possible so people will see big increases in their take-home pay ahead of this year’s midterm elections. But that would come at a cost: smaller or even nonexistent refunds next year, though millions rely on them to plug holes in their family budgets."

As is continually unexpected by Republicans, their tax cut for the rich and higher interest rates for everyone else, was highly deflationary, which is why by the end of the year 2018, stocks had tanked -20%. So what to do, Trump picked up the phone and ordered Chairman Powell to stop raising interest rates. In early January 2019, Powell "pivoted" and stocks once again skyrocketed.

The Mueller report of course was a total fucking waste of time and money. The FBI found unequivocal evidence of Russian election interference, however no direct tie back to Trump. The Keystone Kops were looking for the smoking letter wherein Trump implored his buddy Vlad to rig the election, but never found it. Shocking, I know. Emboldened by "no collusion" and a soaring approval rate, Trump immediately picked up the phone and ordered the Ukraine dictator to put out some dirt on Joe Biden's son, as a quid pro quo for direct financial aid which had already been approved by Congress. In the event, Trump was impeached by the Democrat House and exonerated by the Roman Senate. His approval soared as did markets. 

Going into the second half of 2019, all was going well for Trump's "greatest economy ever" which was entirely borrowed money, featuring a $1 trillion deficit in 2019, 4.6% of GDP, for a 2.3% growth rate. A recession at any other time in U.S. history. However, the stimulus gimmicks were only getting started. In August 2019, the financing of Trump's massive deficit started putting strains on the overnight lending "repurchase" (repo) market. The U.S. government was crowding out the credit market, as Econ 101 would expect. So what to do, the Fed stepped in to fully monetize Trump's deficit. That combined fiscal and monetary lubrication set off another year end rally deja vu of 2017. Which, similar to the 2018 VixPlosion melted up into early 2020 and then exploded in February at the COVID high.

And of course, the ensuing March crash forced the Fed to go ALL IN, to Trump's delight ahead of the 2020 election.

Which gets us to now, because deja vu of 2016 AND 2018, stocks are rolling over in front of the election.

What we notice from this chart of Trump's daily (Rasmussen) approval, is that stocks and his approval rating are highly correlated. When stocks rise his approval rises which makes people buy more stocks assuming he will get re-elected. However, once gamblers get over-lubricated, the market crashes.

In summary, this is the most expensive rigged election in world history. Which means that the Grand Old Circle Jerk is record lubricated for what comes next:

Any questions?

It's The End Of The World. As We Know It.

History will say that Globalization ended in 2020. Exploded by global pandemonium...

Let's see, 100 year storms every month, unprecedented wildfires, global pandemic, global economic depression, speculative super bubble, ongoing riots, Anti-Christ president, senile Democrat challenger. What's not to like?

This pandemic has "fixed" most of the problems that both parties have assiduously ignored. Fixed only in the sense that denial induced atrophy has led to final collapse. For example, this COVID-induced travel ban. The best way to reduce carbon footprint? Probably not. Now featuring thousands of airliners and hundreds of mega cruise ships mothballed likely forever. The immigration crisis - the COVID response has been to close all borders indefinitely, splitting up millions of immigrant families with no notice. Optimal? Not really.

The other major crisis of our time, wealth inequality, has been massively worsened by the COVID crisis, as global central banks mainline monetary heroin straight into the veins of global speculators, amid a mass unemployment crisis. What is so good about bidding up Amazon's stock price to ludicrous valuation, when tens of thousands of retail workers are now having their jobs obliterated by Amazon during lockdown? Is not for me to say. COVID accelerated the ongoing decimation of the real economy by technology-driven commodification. Culminating in a zero yield world, where the only return is a zero sum game asset bubble Ponzi scheme.

If you don't understand all of this, it's because you're not an idiot. And because you don't believe in conspiracy theories. 

Of course, this week these gamblers bought the reflation lie with both hands, as accelerating rotation out of deflation trades continued to implode the stay-at-home Tech bubble. The stock market peaked two weeks ago at the five month mark, which is the same duration the 1930 headfake rally lasted. The Dow and broader market never confirmed the new S&P all time high in August. COVID will now reveal the chasmic gap between fantasy and reality that has for so long been assiduously ignored: 

"In just the past six months, more than 22 million American jobs have been lost, and fewer than half have so far returned. Even when they were working, many people weren’t earning enough to get by."

"Lots of people blame themselves. They have internalized the larger American society’s judgment about being poor. Because, you know, the American dream is anybody who works hard can prosper. The other side of that coin is that if you don’t prosper, it must mean you’re not working hard."

The dark side of the American Dream turned nightmare, is that those brainwashed to believe in it blame themselves for the failure of the system. When in fact in America, the hardest working people get paid the least.

Fittingly, however, the true believers of this Trump recovery con job are now in self-destruct mode. Not willing to accept that their old way of life is over, because they are addicted to external gratification and the consumption-oriented lifestyle. Eastern philosophies teach us the importance of mindfulness and mental tranquility, however, the Western lifestyle is at the other end of the spectrum, amped up on excessive stimulation. In order to achieve internal gratification, these consumption bots must first detoxify their lifestyle and suffer the attendant withdrawal, and then take steps towards achieving inner tranquility. However, as we all know, mindfulness takes time and discipline, something these addicts don't have. So instead, they double down on their addictions. And their half life expectancy.

From a more philosophical perspective, these people are not living for today, they are only ever living for a false tomorrow and the perpetual promise of "more". Any lucid person knows that's not what is coming. Therefore the lies and narratives these zombies believe must become greater and more fantastical. Now featuring deranged pablum administered by an orange circus clown. 

We are not owed more. This planet has been blighted by corporate addiction, and biblical greed. It's only fitting that these addictions are now killing the same people who refuse to change their ways and accept reality. This crash and the ensuing deflationary glut of everything will finally open their eyes to the new reality. 

All of which means that these denialists must reject their current way of life before they have any chance of finding their way to a better one. How many of these addicts will adapt and adjust is not for me to say. I only know that this all makes perfect sense now, for those who still adhere to the antiquated concepts of reality and reason. 

Sept. 18, 2020:

It's The End Of the World As We Know It. And Michael Stipe Does Not Feel Fine

‘Unfortunately, cities here in Georgia were soon to face the burden of some of America’s worst tendencies toward magical thinking and ignorance of science, and the most basic of disease prevention tactics’

"I'll take denial and magical thinking for everything, Alex"

The Con Job Is Complete

Contrary to ubiquitous belief, Disney markets are not as good as they sound...

What we are witnessing is the reverse engineering of social mood by global central banks. While privately they may fret over the valuation bubbles they've generated, the fact remains that they want everyone to be fat and happy. Why? Because this is how the whole game works. Imagine if global gamblers actually took into account the imploding economy and the total lack of visibility to forward earnings, then the stock market would trade at a much lower level. So instead, central banks use their liquidity gimmicks to bid stocks up to unsustainable levels. Hoping that the trickle down fake wealth effect will produce the desired result.

I call this Jedi Mind Trick, Monetary Euthanasia, because it allows everything to fall apart in real-time while sheeple pretend everything is normal. 

It's a denialist paradise.

Any questions?

"Just 16% of respondents said they expected the economy to worsen in the year ahead, the smallest share since 2015"

What we notice about this consumption sentiment chart is that it's three wave corrective. And the "six month" high headline omits the fact that it's still at a seven year low:

In the process of creating this all important denialist delusion, central banks have created what I call one way rigged markets. Meaning they go one way up to unsustainable valuation, and then they roll over and crash one way back down to reality. During the levitation process central banks monetize as many skeptics of Disney markets as possible to ensure everyone gets on the same page and on the same side of the market. The Japanese have seen this movie many times, which is why they no longer trust their stock market.

This week, monthly option expiration manipulation enabled Skynet to save the casino from implosion, during the busiest IPO week of 2020. All while Tech stocks continued imploding in real-time. No small feat of market manipulation. We will find out next week how much it really cost to keep gamblers in the casino for one more week. Although, clearly in this environment of massively rigged markets, one would be a fool to predict one day to the next. I would point out that post-FOMC through the OPEX window was down three days in a row. And the S&P 500 closed below the 50 day moving average today, for only the first time since this rally began back in March (and since the 50 day (blue) was regained):

This week, the Tech bubble continued to deflate because both sheeple and fund managers alike have been conned into believing that the economy is actually improving.

Now, they are ALL trapped in a lie of biblical proportion. And complacency is rampant. 

QQQ dollar volume is sky-rocketing due to this massive rotation. Gamblers betting on a v-shaped recovery in their brokerage accounts have forgotten the law of re-test.

"The highly anticipated public offerings that have flooded Wall Street in recent days hobbled the stock market this week, CNBC’s Jim Cramer said"

“All the great earnings in the world won’t save this Humpty Dumpty market if we keep getting slammed by people selling good stocks to buy the smoking-hot, 100-times sales IPOs”

In summary, drink the Kool-Aid at your own risk. 

It's all 100% fraud. Intended for people who vote for that sort of thing.