All Signs Point To Explosion

The biggest risk gamblers face is the ubiquitous belief in no risk...

“The participation is on a par with 2000, if not greater,” BTIG’s chief equity and derivatives strategist told CNBC’s “Trading Nation” on Monday. “It’s pushed valuations to an equivalent level to where they were in 2000.”

Despite his discouraging comparison, Emanuel believes the current backdrop is more conducive for sustainable gains"

For those who were not around in 2000, this depressionary economy is a pale shadow of the one back then. The late 1990s marked the highest GDP growth rate in three decades, and a government surplus. This year marks the lowest GDP growth in ninety years, despite the largest deficit since World War 2. 15% of 2020 GDP is borrowed money. 

There is another huge difference between this year and Y2K:

In 2020 hindsight, this will be viewed as the year that Tech oligarchs reaped obscene windfalls from a pandemic depression that decimated the main street economy.  Gaining almost a combined trillion dollars in money printed wealth while millions of workers went jobless and homeless. 

This year, Elon Musk saw his wealth grow by 500% from $27 billion to $167 billion. An increase of $140 billion. Jeff Bezos saw his wealth grow by $72 billion. All thanks to COVID lockdowns and central bank money printing.

 

A parade of con men on Faux News and talk radio continually brainwash useful idiots into believing this is the greatest economic system ever created. The one that must be defended at all costs. Money printed Tech centi-billionaires who garner their wealth directly from central banks, while the people who do all of the actual work are abandoned by a corrupt Politburo of incontinent geezers. These are the values we must protect at all cost. Today's disposable sheeple are totally unaware as to how their "system" has descended into a Third World sweat shop over the course of their lifetimes. 

Going into 2021, all of the various risks have coalesced amid cycle high speculation. This week started with the Trump flip flop, yesterday the House passed $2k stimulus checks, however today McConnell blocked $2k stimulus checks. However this issue is not officially dead and it could come up for another Senate vote later this week. Clearly $2k stimulus would be reflationary, as would be the Democrats taking control of the Senate. 

With all of this reflation shock and awe, it can come as no surprise that the most crowded and popular trade of 2020 - the growth stock virtual economy - is starting to implode. It appears that gamblers are not willing to wait to see what happens next with stimulus. 

Recall that the most crowded trades of 2020 were/are: 1) Tech 2)  Short dollar 3) Bitcoin

Bitcoin and Tech are in the early stages of rolling over. Which leaves the short dollar trade:

"Speculative traders are ending the year doubling down on their bets against the dollar."

Doubling down on the second most crowded trade of 2020, using decade-high leverage. What could go wrong?

The short dollar trade is a global RISK ON trade that implicitly bets that foreign risk assets will outperform the U.S. It's the same trade that blew up in early 2018 when the tax cut went into effect.

Now the stimulus is going into effect next week. 

Despite these risks, gamblers have been convinced that this is the beginning of a new cycle. Which is why small caps are soaring. Usually in a new cycle, small caps outperform larger stocks:

The Russell 2000 is now record overbought on delusion. And the most over-lubricated since the flash crash in 2010:

Here is the way I see things going for this crucial next week through the Georgia Senate runoff next Tuesday. I could be wrong, but as always, I err on the side of explosion. I leave to other mainstream sites to blow smoke up your ass.

If by chance, the Senate passes $2k stimulus, that will lead to accelerated rotation away from Tech stocks into cyclicals. If by some miracle the Democrats win control of the Senate next Tuesday, then the Tech trade will go totally bidless.

On the other hand, if one or both of those reflationary events doesn't happen, then my bet is that we will be at the end of the economic cycle. And therefore cyclicals will join Tech in imploding. 

In summary, long Tech, short dollar, long Bitcoin were the most crowded and profitable trades of 2020. 

Only a fool would bet that continues in 2021. And the people  who are locking in their bonuses for 2020 are not the fools: 

"Some of the year’s most expensive stocks encountered a wave of selling as investors moved to lock in gains in the last week of 2020."

In the first two days of this shortened trading week, the ultra-popular ARK Innovation ETF has already traded DOUBLE the 50 week average volume. 

The Grinch Who Stole Christmas

Getting past Trump's latest petulant Christmas disaster, this scenario is reminiscent of 2008 only far worse. Bear in mind all of my predictions are subject to the vicissitudes of insane nutjobs. I'm doing the best I can under the circumstances...

For once we can be glad that McTrump was only lying as usual. We should know better than to take him at his word. I was too dire to assume that Donny would shutdown government all over again just to get his own way. It seemed like the right bet at the time.  It was Senator Pat Toomey who as we recall embedded the corporate bond time bomb into this newly passed legislation who helped convince Trump to sign the bill:

"The danger is he’ll be remembered for chaos and misery and erratic behavior if he allows this to expire”

Let's see: The decimation of Obamacare, the Muslim ban, Latino kids in cages, rigged elections, the conspiracy bullshit, four years of non-stop lying, record wealth inequality, all culminating with political brinkmanship at Christmas while millions go hungry. Sign this one bill that ruined Christmas a week late and history will forget the past four years of chaos, misery, and erratic behavior. Sure. Whatever his base of historical illiterates will believe. 

Trump's legacy IS four years of chaos, misery, and erratic behavor. However, the brunt of the misery is only getting started. Which gets us back to the 2008 analog. Deja vu of the TARP vote in 2008, this bill is far too little, too late. Too many golf games passed between the first stimulus and the second stimulus.

According to the 2008 analog when Obama faced a hostile Congress, it took a substantial amount of financial dislocation to get the GOP onboard. However, this economy is far weaker than the one in 2008:

Here we see Brent crude oil then and now. It's the same three wave corrective pattern at multiple degrees of bailout. Each fake recovery more pathetic and requiring less IQ in order to believe in it.

Similarly, looking at Treasury reflation expectations, compare the first 12 months of recovery in 2009 versus the past 10 months of this recovery. Despite the two month difference, this recovery benefited from far greater monetary stimulus, and yet has yielded far less economic reflation:

Gold gamblers should be particularly worried as to what the shiny metal is saying about the prospects for reflation. Gold peaked when the first round mega stimulus ran out at the end of July. Since then, non-stop weakening of the dollar has not held gold's bid. Rumours abound that Millennials are selling gold to buy Bitcoins.

Stock market gamblers have been told to look across the valley of COVID death to the vaccine nirvana that lies on the other side. Which means that stocks must maintain the permanent plateau of delusion until the second half of 2021. However, that assumes the current stimulus will be adequate to avoid wholesale small business decimation and mass corporate bankruptcy in the meantime. Which it won't. Most of the stimulus was already "spent" this year in anticipation of a second stimulus bill that arrived seven months late. Which means that spending now exists in the form of overdue bills. Sadly, paying down past due debt is not "GDP". Until COVID subsides, this locked down virtual economy will continue to have an economic multiplier at the limit approaching zero. 

Ironically, this "stimulus" bill contains a ticking time bomb that is about to accelerate financial dislocation. Thanks to Senator Toomey who feared unfettered socialism, this bill just removed the Fed's ability to buy corporate bonds in the secondary market. The Fed put is now gone from the debt market. Removed at the WORST possible time.

"Toomey said this would “preserve Fed independence and prevent Democrats from hijacking these programs for political and social policy purposes.”

Former Fed Chair Ben Bernanke issued a statement over the weekend warning about the potential implications of the GOP’s proposal. He stressed that it is “vital” that the Fed be able to “respond promptly to damaging disruptions in credit markets” and that such ability not be curtailed."

You know what that means. 

No more socialism for the rich:

In summary, the Santa rally is ending. Belief in fake reflation just killed it.

Picture the deflation trade getting monkey hammered just as deflation is about to return with a vengeance. 

All because morons trust criminals.

BTFD: Buy The Fucking Depression

What happens when newbie Millennials go ALL IN their first ever asset bubble while pretending to be geniuses. And callous geezers throw young people under the economic bus in a weakening economy? You get copious fools bidding up stocks to record valuations in a depression, and no one sees it coming...

Gamblers are now officially over the fiscal cliff:

The premise behind Elliott Wave Theory is quite simple - emotions drive markets: A constant oscillation between greed and fear, with long periods of boredom in between. The EW charting method using numbers and letters merely attempts to codify the repeating fractals that signify bull and bear markets. The problem is that wave counts are only fully formed after the fact. Meaning they are generally not predictive. What appears to be a three wave bear market rally can easily morph into a five wave bull market. Or, as is generally the case, smaller wave counts are nestled within much larger trends. Which is why I seldom use wave counts other than identifying three wave corrective overlaps which tend to be very reliable in identifying a market burning capital and going nowhere.

For example it took banks six months to break through the June high on vaccine and stimulus optimism. Not a good sign. If any sector is sending a loud warning that the economy is not recovering now or in the future, it's banks. Today's gamblers need to stop using Netflix as an economic bellwether. 

The other reason I don't slavishly follow EW Theory is because I believe that there are other factors that move markets. Most specifically central banks. Central banks have essentially reverse engineered social mood, and now they are actively manipulating investors. By artificially suppressing bond yields, they force money managers to onboard more risk. The implicit and delusional bet is that cycle default risk has now been eliminated. It's been a good bet to make for over a decade now. Now featuring the longest expansion in U.S. history in double overtime. This cycle can never "end" because it would obliterate Baby Boomer retirement. Which is why unlimited amounts of Federal debt is now conflated as "GDP" to pave over economic depression. 

But it won't work. Primarily because now that Biden is president, Republicans have re-discovered their fiscal rectitude after four years of obscene profligacy for the rich. Which is why the economy is rolling over into depression. These GOP senators are what is called a "gerontocracy", and they are entirely out of touch with economic reality. What I call "Japanification":

"A gerontocracy is a form of oligarchical rule in which an entity is ruled by leaders who are significantly older than most of the adult population. In many political structures, power within the ruling class accumulates with age, making the oldest the holders of the most power." [And wealth]

"America in its present state of decline increasingly resembles the late Soviet Union, one of the most unsettling parallels is its unmistakable slide into gerontocracy"

The fragility of this gerontocracy has been ruthlessly exposed by the Covid-19 epidemic. The crisis has also shown the damage that can be caused by a ruling class more qualified to be in long-term care than to hold important and intensely demanding positions.

Aside from McDonald Trump never leaving the White House, the greatest economic risk for 2021 as I've said many times is the fact that the GOP Senate is constantly behind the curve on fiscal stimulus. They are totally out of touch with economic reality and their ideology does not include bailing out the middle class. They only bailout rich people. Which is why they are doing nothing to overturn Trump's recalcitrance on this stimulus bill. They are leading this country straight into economic purgatory. 

Given all of these factors, it can come as no surprise that the economy and stocks are now negatively correlated. As the economy implodes, central banks increase liquidity, and stocks go higher. As stocks go higher, gamblers become more giddy, chase risk, and make up stories for why it's justified. Now, all of this financial alchemy has bid stocks to record highs on the precipice of a double dip depression. 

Getting back to social mood, there were several factors that accelerated the manic reach for risk into the end of the year. First off there was the Biden election which gave a false sense of relief. Secondly there was the vaccine trial news in early December which gave another boost to risk appetite, followed by the vaccine rollout two weeks ago, and most recently the stimulus deal this past week. All of which led the various sentiment risk appetite measures to hit cycle highs. 

I am referring to the equity call/put ratio, BofA sell signal, the NAAIM active manager asset allocation, the Rydex bull/bear indicator, the AAII individual investor sentiment. And of course the parabolic rallies in junk stocks and Bitcoins.

Wall Street con artists are having a hard time imagining a lower bonus in 2021:

By the way, there were "no foreseeable risks" right before the pandemic explosion either. Even though the pandemic had been raging worldwide for weeks:

All of which shows just how much social mood plays tricks on people. Bitcoin is in melt-up mode at the exact same time as every other parabolic risk market: Self-driving EVs, Solar/ESG, revenueless Biotechs, work from home Tech stocks etc. And yet we keep hearing all of these reasons why THIS TIME it's different.  The only thing that is different this time around is that Bitcoin is going bonkers at the same time as all other risk markets. Crypto Ponzi schemes have now gone mainstream. Bitcoin being the biggest Ponzi scheme this side of the S&P 500.

Below is Bitcoin as of mid-day on Sunday. We heard the same narrative bullshit back in 2017 that the dollar is going to zero due to money printing. However, the only inflation under the current GOP paradigm is in risk assets. In a deflationary depression, the dollar will be gaining in value. 

Notice the tall wick and daily candle (main panel) and the MACD in the lower panel. It's possible that Bitcoin is reaching its peak now.

For around a decade after the Great Financial Crisis, Millennials eschewed investing in stocks, because they had witnessed the trauma it caused their parents during the 2008 meltdown. However, all of that started to change after Trump got elected. Slowly but surely they got caught up in central bank FOMC: fear of missing crash. It started with forays into cannabis investing - aid to investment acumen presumably, and then moved on to Bitcoin, the Tesla bubble, junk Biotechs, bankrupt rental car companies, Artificial Intelligence and other things only Millennials can understand.

The ultimate irony will come when the massively leveraged Millennials showing up at the end of cycle to be Wall Street's bagholders, while pretending to be investing geniuses, FINAL implode the Baby Boomer retirement bubble. Then all sides will be pissed off. And geezers out on the golf course will find out they are not disconnected from reality at all.

One thing we know for certain, gamblers are ready for the Santa rally, because they've been front-running it for six weeks. The longest streak of the entire year:

Make Depression Great Again

Trump just made double dip depression the most likely scenario. The full cost of having a con man for president is now due...

All of today's pundits and economists somehow missed the biggest risk to Disney markets - Black Swan Donny. This week Trump made all of them look like absolute idiots. Right up until the bill passed Congress the White House affirmed their support for the bill. Trump even extended the government shutdown deadline TWICE to provide more time for negotiations. Then, when it was finished he trashed the bill and burned all of the bridges that would allow him to sign it. 

Apparently today's pundits don't remember that Trump caused the longest government shutdown in U.S. history two years ago. A 35 day shutdown that started December 22nd, 2018 and lasted until January 25th, 2019. Then, like now, he was having a temper tantrum, at that time over the funding of the border wall. And he will gladly shutdown the government all over again now facing the much more dire prospect of leaving the White House. A scenario that will rubbish all of today's 2021 economic predictions before the year even gets started.

Picture what happens to an already weakening economy when unemployment runs out for millions of people, the entire Federal government shuts down, and millions of businesses lockdown due to accelerating COVID. January is expected to be peak pandemic. 

Depression, that's what happens. In 2020, the U.S. government was 25% of the economy. Now take that GDP offline. 

Even if the Democrats win the Senate via the Georgia runoff (Jan. 5th), that is very unlikely to derail Trump's shutdown plans. It would take a super-majority in both the House and Senate to override a veto. Highly unlikely now that Trump has condemned the current budget bill as a "disgrace". The current budget is radioactive to Republicans. The fact is that Republicans want the economy to fail under Joe Biden. For months McConnell was adamant that no additional stimulus was necessary, UNTIL he realized that the Georgia Senate runoff was at risk. When that event soon passes, he will have no political incentive to pass a major stimulus bill in January.

For their part, today's pundits and economists don't see this coming, because they can't predict the past and the present, much less the future. Back in August 2008, the Fed was still debating whether or not the economy was in recession. It had been in recession for nine months already. Most of today's pundits and economists only care about one thing: monetary euthanasia. To these fools, there is no real economy. 

Meanwhile, junk stock speculators were sniffing glue this past week believing that a $2,000 stimulus bill would actually pass Congress on Thursday morning, when it was nothing more than another Trump con job. When the $900 billion bill passed on Tuesday, cyclicals rolled over, having already priced in the meager life support. Cramer couldn't comprehend the basic fact that the bill that passed was insufficient economic life support:

As it turns out of course, there is NO bridge to the vaccine now. Which means that cyclicals were far TOO optimistic this past week.

And of course Cramer was smoking crack as usual. 

This gridlock clusterfuck is deja vu of winter 2008/09 when Obama won the election. Except of course 10x worse. This will be winter 2009 with expired unemployment benefits and a government shutdown. Featuring a paranoid nutjob rambling around the White House trading conspiracy theories with other alt-idiots. All while the COVID death toll skyrockets.

What a great way to be great again.

Since 2018, banks have been warning that the Trump economy is 100% fraud. Now they will enter third wave down at all degrees of trend.

Buckle up, because monetary euthanized gamblers are about to discover that Go Daddy is no safe haven from depression.

"I bought for the pandemic, but I stayed for the depression"

Let Them Eat Cake

History dictates that this level of Banana Republican wealth inequality does not end well for massively overbought Ponzi schemes and the people running them...

The COVID pandemic was the final nail in the coffin for Globalization. As if any sign is needed, this week the Brexit deal was finally signed, after four years of non-stop negotiation. The same white supremacist movement that started the year Trump was elected. Meanwhile, in 2020 global wealth inequality has exploded to Third World levels. The final chapter of globalized Ponzi capitalism is at hand. 2020 will be seen as the year of ultimate greed. Contrary to popular belief however, 2021 will not be as accretive to further Ponzi gains:

"Bear case? There may be only bulls left in 2021"

No equity market analysts that MarketWatch surveyed for this report foresee a pullback from current levels, already observed as lofty by more than a few market experts, as investors head into a crucial phase of the recovery from the worst pandemic in over a century"

As sane observers, we need to realize one thing right now and for the future as this society descends further into Third World dystopia: $200+ trillion of misallocated global capital will NEVER admit that the future could be anything other than better than the past. The present value of discounted fantasy doesn't allow it. No one is going to plug a minus sign into a spreadsheet designed to attract copious idiots to Ark investment funds. 

Which is why 2021 will start off the exact same way as 2020 - epic reach for risk amid a mass pandemic. What will they say this time?

"Aw fuck, not this again!!!" 

This Christmas, the Billionaire-in-Chief is living large at his Mar-a-Lago Florida estate while millions of Americans go hungry. Many millions more will soon be evicted, homeless, and destituted by Trump's infinite corruption. Trump's implosion of the pandemic stimulus bill was a vicious act of cruelty cloaked in a mock gesture of generosity that collapsed the prospects of near-term economic assistance. It was a modern day declaration "Let them eat cake". For those who know their history, that didn't work out too well for Marie Antoinette. Suffice to say, my prediction for rioting in 2021 just got pulled forward substantially in the past week. This event is exposing the absolute immorality of the Republican party, in a way that even the biggest idiot can see. Throwing people down the shit hole is their legacy.

This article below lays out the options I was discussing in my last blog post. Of the three options - sign the current bill, veto the current bill, or do nothing - the last option is the most likely. Notice, that obtain $2,000 stimulus is not one of the "likely options". Trump already said in his Christmas present video that he is going to leave this stimulus clusterfuck to the "next president", which could be him if the GOP bends over the log. Which means he plans to inflict maximum pain. Someone in his Machiavellian Administration understands how to twist the knife for maximum damage:

Option #3: Trump's specialty - do nothing:

Trump runs out the clock within 10 calendar days (except Sundays) of receiving it from Congress, neither signing nor vetoing it. The situation is known as a “pocket veto.”

In this case, the calendar works in Trump’s favor if he wants to kill the bill. Within that 10-day time frame, the current 116th Congress expires on Jan. 3 and the new, 117th Congress is sworn in. Bills die if they are not enacted during the Congress in which they are introduced."

Getting back to my primary thesis:

This is America and we don't believe in socialism in this country. No instead, we believe in serial monetary bailouts for the rich while working people get laid off at the rate of 800,000 every week. We are witnessing the abject failure of capitalism to create prosperity for anyone except a dwindling minority of monetary subsidized super billionaires. A zero sum game. A hoax and a fraud. The only hoax and fraud NOT covered on Faux News and hence the only real one. 

Globalized capitalism failed in 2008 when it got bailed out at taxpayer expense. And every day since then via continuous monetary bailout. The system was too corrupt to fail. Since that time, we've been living on the glue fumes of recycled mythology. Doubling down on the same failed policies that have been destroying the middle class since the 1970s.

However, today's captains of the Titanic can't admit failure. To do so would admit that the entire model is flawed and instead of creating widespread prosperity, it created widespread global poverty. What can they do now except blame socialism for creating the most extreme wealth inequality in human history? Somehow socialism inadvertently created the most billionaires in human history. Sure. Only a super idiot would believe such a thing, which is why even in this hunger games lottery, the system goes unquestioned. If it's one thing corporations did well, it was to create an obedient Borg of unquestioning zombies. Now daisy chained on social media. 

But the question is, can socialism unfuck capitalism? And the answer is of course not. The whole system has to collapse and be re-built from the ground up. So in that sense the dedicated Idiocracy is right, socialism at this point would just be more lipstick on a pig. But how many people do you know who will admit they've been kissing a pig their entire lives? 

None.

Which is why the sheeple ride this Titanic all the way to the bottom, gambling in Trump Casino all the way down to their inevitable fate.

"Tech companies were the first to cancel events and send workers home because of Covid concerns in early 2020. Now they’re the first to make work from home permanent as the pandemic accelerates into 2021. That’s no surprise since the pandemic also benefited tech companies the most"

As Americans followed rising case counts and hunkered down in the spring, most of us were still hoping that the pandemic would blow over by the start of summer...But tech companies had already been bracing themselves for a much longer timeline. Even forever."

Artificial intelligence forever.

The poster child for mass delusion is Tesla, which is the cornerstone super bubble of 2020. Tesla's market cap has increased 10x in the past year, by half a trillion dollars.

Tesla benefited from multiple "growth" factors in 2020. It started early in the year with the fossil fuel divestment movement. Tesla is one of the largest cap green energy companies, so it was added to every ESG ETF. Right now, Tesla is the top holding in three of the ultra popular Ark investment ETFs: Ark Innovation (Arkk), Ark Web 2.0 (Arkw), and Ark Robotics (Arkq). 

The Tesla bubble was just cooling off when Joe Biden got suggested for president - if democracy can prevail. So that of course created a massive bubble in everything green energy. And then just as Tesla was reaching its Biden zenith, Standard & Poor's decided that the stock was a sufficiently large and lethal bubble, that it should be added to the S&P 500. Where it can now wreak havoc on retirement portfolios.

All of which makes 2020, the year of ultimate greed.

Here Comes Satan Claus

The man-child having a temper tantrum in the White House is now by far the greatest market risk. He created this signature moron bubble, it's his right to explode it with extreme dislocation...

Wall Street:

"We upgrade the moron bubble to strong bonus"

Trump's Twitter feed these days is indicative of a mad man becoming more and more unhinged by the day. As his failed presidency sputters to an ignominious ending, Trump wants to somehow avoid looking like a "loser". No easy feat, for someone who just got trounced by a substantial margin: 

Trump is not a loser, he is a sore loser with the morality of a nine year old crack addict. Which is why he has now become very dangerous. 

Sorting through multiple articles on this stimulus impasse, it's impossible for me to see an easy way out of this newly created Trump disaster. And unfortunately, U.S. politicians only specialize in finding easy ways out. In his shock and awe video criticism of the budget and stimulus, Trump broke ranks with his own party both on the size of the budget (too large) and the size of the stimulus (too small). Leaving aside the fact that Trump has happily signed off on several identical porky budgets in the past, the fact is that paring the budget down to whatever fictional budget Trump doesn't have in mind, would take weeks, and surely cross over into the next session of Congress (January 3rd). Which takes that option essentially off the table. What Trump wanted to do with his entire rant was to send a message to his own party that he is pissed off they didn't make him emperor for life.

It's very hard to placate that type of ambition. 

As far as the larger one time stimulus check demand, Trump has across the board support from Democrats and zero support from Republicans in either the House nor the Senate. So that larger stimulus check is nothing more than a fantasy which is now putting at risk the real stimulus bill that passed. Trump's own party won't override him because they are afraid of him, especially House Republicans who now view the current budget as being politically radioactive. Meanwhile, McConnell is treading carefully ahead of the Georgia Senate runoff, because any further incitement of Trump will put the Roman Senate at risk.

This venn diagram depicts the current quagmire. There is more agreement between Democrats and Trump and Democrats and Republicans than there is agreement between Trump and his own party:

All of which means that the most likely scenario is that there will be NO stimulus until the market crashes a sufficient magnitude to inform today's ubiquitous Madoff-acolytes that there is more to an economy than Ponzi markets chased by a society of groupthink idiots. Which makes this TARP 2.0, except this time around the bailout in question is for the middle class. Many people seem to forget that the first TARP vote failed, then the market crashed and the second vote passed. However, much to the surprise and consternation of everyone involved, after a few days' vertical short covering rally, the wheels came off the bus for real.

TARP 2.0:

Unfortunately, as I warned in my 2021 prediction, the other massive risk is the Disney Casino itself. It is overrun with newbie investors who are massively over-leveraged to the junkiest stocks in the casino. 

They are of the unified belief that their abject lack of knowledge makes them invincible:

"Portnoy, who took up day trading this year and has seen some positive results, told FOX Business that "he's never heard of Chris Sacca" but added, "He sounds like a sour loser and an idiot."

"I have as much experience in this trading climate as they [experienced investors] do. And maybe the very fact that I’m not burdened with their history has allowed me to see this market for what it is, while they have failed miserably."

In other words, newbie day trader Portnoy has as much experience with gambling in pandemic super bubbles as everyone else. Furthermore, he is not burdened with the knowledge of what happened to every other idiot who believed they were not burdened by knowledge. To be fair, back in March 2000 I was unburdened by knowledge as well. And then I became unburdened with capital shortly thereafter.

Good times.

I noticed that in November cyclicals went vertical, however, in the past four weeks, gamble-from-home Tech stocks have gone parabolic. 

You have to wonder, who is behind it all?

"Making money in stocks is easy, all you do is click, click, click"

This is a key reversal of fortune on the weekly, featuring mega volume spread over 3.5 holiday trading days chasing junk stocks: 

"Stick around for the Santa rally"

"No doubt"

This week, Fintech saw the largest key reversal since September, except far larger in terms of volume:

News that Apple is entering the self-driving car space sent robotics and autonomous technology stocks parabolic:

"I’m not burdened with their history which has allowed me to see this market for what it is"

Sure, but can you see yourself for who you really are?

2020: Year Of The False Profit

Trump will forever be known as the Jim Jones of presidents. A Kool-Aid serving false prophet hell bent on burying his true believers...

Anyone who falls for his fake concern for the middle class is a useful idiot, who is in for the lesson of a lifetime.

The net result of COVID-2020 was to increase U.S. wealth inequality to Banana Republican levels, as the rich were continuously bailed out by central banks while working people went under the bus.

"Why didn't anyone think of this sooner?"

The stunt that Trump just pulled with this surprise stimulus pushback is emblematic of his entire presidency: Abject ignorance, self-absorption, extreme arrogance, followed by knee jerk incompetence. Of course $2,000 per person is a great idea - The Democrats have been in favor of it all along. The only problem is that it took seven months of relentless haggling to reach the mini stimulus that is currently on the table. McConnell was dead set against any more one time stimulus checks until he realized that the Georgia Senate runoff was at risk. Trump is now at war with his own uncharitable party. Republicans only believe in bailouts for rich people, not bailouts for people who actually need money. By pulling this stunt, Trump could delay or cancel all stimulus whatsoever and cause extreme economic hardship in the depths of COVID winter. There was no room to maneuver for this type of last minute political grandstanding.

As usual, Jim Jones just threw millions of people under the bus:

"President Donald Trump’s last-second opposition to a coronavirus relief and federal funding bill already passed by Congress threatens to torch jobless benefits for millions of Americans and shut down the government during a deadly public health crisis"

A federal eviction moratorium — which the legislation would extend through Jan. 31 — would expire at the end of the year. Tens of millions of people could face the threat of losing their homes if the measure lapses."

The president could kill the legislation through a so-called pocket veto if it does not get to him until Thursday or later"

“If you think he cares about the size of the checks, I’ve got a bridge to sell you. All this is is a middle finger to America on his way out the door.”

Recall that two years ago this month, Trump pulled the exact same stunt - he blocked the passage of the annual budget over border wall funding, leading to the longest government shutdown in U.S. history:

"On December 11, President Trump held a televised meeting with Speaker-designate Nancy Pelosi and Senate Minority Leader Chuck Schumer in the Oval Office and asked them to support an appropriation of $5.7 billion for funding of a border wall along the U.S. southern border with Mexico. They refused, resulting in an argument between Trump and both Congressional leaders. During the contentious discussion, Trump remarked, "I am proud to shut down the government for border security ... I will be the one to shut [the government] down. I'm not going to blame you for it ... I will take the mantle. I will be the one to shut it down."

S&P 500 2018:

"Merry Christmas!"

What happens next? I have no idea. Hopefully checks go out ASAP to families in need - in any amount. From an economic standpoint, the amount won't matter, because the economic impact will last probably a week at most. Most of this money will be spent on food, credit card bills, and rent. It's impossible to "stimulate" an economy that is on lockdown mode. The current Keynesian multiplier is the limit approaching zero. The sectors that need this money the most, won't see any of it.  

From a markets standpoint, this asinine gambit has no upside either. Beyond short covering, the sugar high won't last more than a few hours or days. The risks of Trump's ever-increasing time bomb are as extreme now as they were before he pulled this stunt.

This chart basically sums it up:

MAGA has been one massive crack high of ever-increasing stimulus:

Deja vu of the tax cut, global markets are starting to price in renewed deflation which contrary to every economic prediction - is inevitable in the post-pandemic world.

"Using the greenback to finance carry trades is a relatively recent phenomenon, reflecting the depreciating pressure of the Fed’s easing measures after years of dollar strength. But with speculative and real money accounts betting against the currency, any bounce higher by the greenback could lead to short covering and a potentially painful squeeze."

This blow-off top is in its sixth up week in a row - a streak we haven't seen ALL year. Up 50% since the election, on mega volume. 

"All you do is scan headlines and buy what everyone else is buying"

"I can do that"

In summary, 2020 was the biggest pump and dump in human history:

"In a year that saw a pandemic upend financial markets and economies around the globe, U.S. companies and their largest shareholders raised a record $435 billion with stock sales."