The Most Deflationary Event In History

The COVID pandemic accelerated all of the deflationary factors that resulted from decades of "free trade" which culminated in the desperate gambit of using homes as ATM machines. This time, the internet virtualization of the economy went into overdrive during the COVID lockdown phase amid global mass layoffs 4x the rate of 2008. And yet today's economic illiterates see nothing but "inflation", which they are praying will keep a bid under their hyper-inflated risk assets...

The only disagreement is from the bond market. 

For the record, the COVID pandemic was the most deflationary event in modern world history. How do we know? Because oil went negative for the first time ever. Now it has recovered back to the pre-pandemic level and copious morons are convinced THIS is inflation.

Here we see that reflation expectations and the oil market track each other 1:1.

Last year's deflation "event" is quite clear on this chart.

There is no doubt that on the supply side, bottlenecks in the global supply chain have been exacerbated by this halting clusterfuck of an economic restart as Keystone Kops policy-makers use "science" as an excuse to implode the economy.

Unfortunately, as indicated by decade low consumer sentiment, there will be NO demand-side follow-through to keep this level of "inflation" sustained. Even less likely now that the pandemic emergency unemployment program has officially ended. 

Nevertheless, it's clear that today's economic illiterates still haven't learned that "inflation" is always highest at the end of the cycle and lowest at the beginning.

With the CPI report due out this week, I have no doubt that we will be hearing plenty of inflation hysteria. All of which is highly reminiscent of September 2008 when the collapsing banking dominoes were ignored due to end of cycle inflation concerns.

Needless to say I am dubious of this strategy of bidding up every asset class ahead of what will soon become the NEW most deflationary event in global history making last year's gamble-from-home vacation seem like a picnic. 

I can't see how artificially bidding up prices to unsustainable levels AND thereby maximizing liabilities ahead of a burgeoning global debt crisis makes any sense. One thing we know for certain is that it has certainly raised the political stakes resulting from the fallout of this failed gambit.

Here we see that auto loans have been going parabolic since the pandemic began. At a level not seen since the Y2K Tech bubble:

I believe this is a bad idea. 

Auto loans, $ change billions

Gamblers are also ignoring the fact that the prime beneficiaries of this "inflation" bubble have been the mega cap Tech deflation trades. Stocks that have been on a parabolic rise higher since the pandemic began.

This chart shows that the average U.S. stock gave up ALL of its past decade gains during the pandemic. It shows that Tech stocks accounts for virtually of the "market" gains. Which means that the S&P 500 has turned into a closet Tech bubble.

Another warning sign. IGNORED.

I've heard many people claim that this is a "stagflationary" event. However, the stagflation of the 1970s took place when capacity utilization was near record highs AND labor share of the economy was AT record highs. Today, both are at RECORD lows.

Imagine how happy Jeff Bezos is now that he has millions more drivers to deliver bon bons in real-time. Now yuppies can click a button and hear the doorbell ring :15 minutes later.

True paradise.

In summary, this is all very reminiscent of September 2008, only this time the stakes are 10x higher.

"Evergrande has the distinction of being the world’s most debt-saddled property developer and has been on life support for months. A steady drumbeat of bad news in recent weeks has accelerated what many experts warn is inevitable: failure."

Observers are watching to see if Chinese regulators make good on their pledge to clean up the country’s corporate sector by letting “debt bombs” like Evergrande collapse"

Back in September 2008, the Fed let Lehman collapse. And then the Disney markets shit a brick when they realized there IS such a thing as real losses.

Position accordingly. 

Exorbitant Ignorance

Many Americans have been brainwashed to believe they have inherited the mantle of greatness passed down from prior generations. What they have actually inherited is the bill...

Those pundits who analyze the U.S. dollar reserve currency usually do so in the financial sense vis-a-vis the capital account. They happily ignore the long-term impact of an economy increasingly reliant upon foreign imports. They extol the fact that the dollar reserve currency allows the U.S. to import both capital AND goods from around the world on a seemingly unlimited basis. Vendor financing on a global scale. This has allowed the U.S. the "exorbitant privilege" of ignoring its ever-widening twin deficits - fiscal and trade.

Which is why it's no surprise the U.S. invented the concept of "Free Trade". No other major trading country - Japan, China, Germany believes in such a thing. Unlike the U.S. they are all trade mercantilists which believe as the British did hundreds of years ago:

"The Balance of Foreign Trade is the Rule of Our Treasure"

Historically those countries that rested on their laurels and relied upon their currency reserves to fund their standard of living soon found their currency reserves depleted. Mercantilist nations running trade surpluses happily relieved them of their burden. The most common example being Spain during its reign of empire. Of course in the age of fiat currencies and unlimited debt monetization, the price to be paid is not in gold reserves. The price is one that has been ignored for the past four decades - industrial capacity, intellectual property, scientific and engineering capability. A transition from a high productivity manufacturing economy to a low productivity services economy.

Voila. 

The silver lining in this rapid descent into Third World penury is the fact that China now needs the U.S. trade deficit as much as the U.S. does. China can ill afford to have its factories idled and its population mass unemployed, so instead they continue to accept the seemingly worthless dollar in exchange for their exports.

So does living off the largesse of all prior generations still confer greatness? Today's morons clearly believe it does. History won't be as kind. 

My wife and I both in our early 50s discuss what will happen to Social Security long-term. What most people don't know is that the program is already in the red. The so-called Social Security "trust fund" is a fictional entity that contains worthless IOUs from the Federal government to the Social Security fund. Each IOU from the government that must now be cashed in to pay retirees represents Treasury issuance on the open market. The Social Security "surplus" that existed for the past several decades during peak Boomer employment was squandered on successive rounds of tax cuts for the ultra wealthy. The Social Security surplus was "borrowed" by the Federal government in order to pretend the tax cut driven deficit was much smaller than it really was. Complicit economists merely claimed it was money we borrowed from ourselves which is why they excluded it from the "public deficit". However, now that Social Security proceeds are LESS than the payouts, it turns out that this private deficit is money we need to now borrow from others because we don't bring in enough taxes to borrow from ourselves anymore. Which means that if you are someone over a certain age who is soon to be reliant on Social Security, then you have to pray that we are now Japan and locked in a state of permanent deflation. 

If not, you must allocate a certain portion of your wealth to gold to protect against inevitable inflation. Don't fall for this bullshit that Bitcoins are the new gold. Having a certain allocation to gold in a portfolio will likely prove more valuable than stocks in the long-term. 

Gold has outperformed stocks for the past twenty years:

Nevertheless, when you put it all together, one realizes that the outsourcing of the economy has essentially ensured a deflationary outcome. As the U.S. fiscal deficit grows, the trade deficit grows in direct correlation. The U.S. is importing deflation from Asia. Which is why Biden's stimulus will have no long-term inflationary effect. The money is heading straight back to China where it originated. 

The balance of trade is record wide in 2021:

In addition, at the peak of the largest asset and credit bubble in human history, owning any risk asset at this juncture is a dangerous proposition. There will be plenty of gold and stocks puked back onto the market during the global margin call. 

Gold is warning us that inflation is a hoax. Those who don't heed that warning will soon realize that they were only renting exorbitant ignorance all along. 

A 100 Year Storm

As we're witnessing in real-time, reality doesn't give a damn what today's denialists "believe". They're being hunted into extinction and they want no warning as to what's coming...

What went wrong? That's the question archaeologists will ask. It's a question that is assiduously avoided by today's de facto Idiocracy. This inherited belief in God given exceptionalism has made this society fat, dumb, and lazy. Denialist ignorance is the path of least resistance, bounding down the continual descent into squalor.

The 100 year storm flooded our basement this week so I spent the past several days fixing the damage and improving the drainage before Noah starts loading the animals onto the Ark for the next round. I am under no illusion that this was a "one time event". Half this country is  currently under extreme drought and the other half is under water. Large tracts of housing are now blighted and permanently uninsurable. The square footage per person of U.S. homes doubled in the past fifty years while the population doubled as well. Third grade math indicates the unsustainability of this mass consumption orgy. You don't have to be a genius to figure out "what changed". 

Afghanistan is another major example of never ending denialism. Biden should have never attempted to pull out of that country which collapsed like a cheap tent. Held up all these years only by a continuous flow of foreign aid and the permanent U.S. presence. What was he thinking? There was no upside to decisive action. Talk constantly and do nothing, that is the new American way. Now he is receiving the full wrath of two decades of collapsed hubris. He made all of today's "experts" look like the idiots they've been all along. His presidency blighted by honesty.

Which gets me to this ongoing COVID debacle which is being managed in the worst way possible. Half the country that is vaccinated is in a constant state of hysteria over the virus. The other half of the country is unvaccinated and pretending the virus doesn't exist. One side is racing into the virtual reality of the future and the other side is clinging to the blighted past.

One wonders, would so many of these yuppies be enthralled by night after night of COVID hysteria on CNN if it wasn't conducive to a permanent work from home situation? As we got closer to the end of the summer and the dreaded return to the office, back came the masks and the calls for "responsibility". Make no mistake, this is a yuppy paradise - untold numbers of marginally attached gig workers are now attending their every whim while they get rich in the markets sitting at home. We don't need arrays of tall downtown skyscrapers anymore, the iPhone is the new office.

To date, the 100 year storm has yet to reach the placid shores of these central bank managed Disney markets, but it's only a matter of time before the cars are floating down Wall Street as well.

Going into the Labor Day long weekend, the Nasdaq is six months overbought (lower pane), and the beloved virtual economy is tracing out an identical pattern to the February top:

Cyclicals are getting monkey hammered this week, while positioning (lower pane) remains at extremes. JP Morgan put out a note this week saying that retail investor inflows remain at a record high in August.

Chinese stocks have enjoyed a nice bounce, but now we learn that the most leveraged company on the planet is on the verge of default. Investors are assuming the Chinese government will organize a bailout, but given the theme of "Common Prosperity", it's far from a sure bet.

It appears that unlike the U.S. where inequality is the new beloved business model, the Chinese are getting serious about the problem. 

"Common prosperity" as an idea is not new in China, but a sharp escalation in official rhetoric and a crackdown on excesses in industries including technology and private tuition has rattled investors in the world's second-largest economy"

Does common prosperity include bailouts for the rich? If it doesn't, then inequality is going to get fixed sooner rather than later. 

Ironically, due to the implosion of the real estate sector, Chinese speculators are now speculating in stocks at volumes not seen since the crash of 2015. 

"On Wednesday, trading volume in the Shanghai composite was the highest since July 2015, the summer China’s stock market crashed amid high speculation."

Markets should be prepared for what could be a much worse-than-expected growth slowdown, more loan and bond defaults, and potential stock market turmoil"

Or not.

Conversely, the U.S. approach to fixing inequality is to continue to dump insane amount of junk stocks into an extreme overbought market, thus allowing insiders to cash out at public expense. 

"The IPO market has already had its busiest year since the internet bubble in 2000"

"After-market performance (the performance after the first day of trading) for IPOs was negative for most of this year. An investor who put money into an IPO after the first day of trading, on average, lost money"

In summary, the question on the table is will human history's biggest pump and dump continue into this Fall and therefore keep the yuppy dream alive? 

Or will inconvenient reality burst their bubble?

My prediction is that the inequality reduction will begin overnight in a widely ignored time zone. 

The Promise Of The Joker And The Fool

For those amnesiacs who enjoy Tech bubbles, housing bubbles, and EM currency crises, all at the same time, this is their kind of market. For anyone who can fog a mirror and retains a semblance of memory, this is all just human history's biggest fool's errand...

My blog posts have become less frequent lately because there are only so many ways to describe mass idiocy, and I am running out of adjectives. As I tweeted recently, only to a species that is close cousin to the baboon does any of this make sense. In the words of Joe Walsh, Mother Nature has her little surprises. 

First off, the taper news that came via the Fed minutes two weeks ago led to an immediate selloff followed by a short-covering rally.  It was a bear trap. Conversely the follow-on confirmation this past Friday at virtual Jackson Hole that the Fed indeed plans to taper this Fall led to an immediate ramp higher. Time will tell if this last rally is human history's biggest bull trap. The Fed has three meetings remaining in 2021 - Sept. 21-22, Nov. 2-3, and Dec. 14-15. Most pundits are predicting either a September or November taper announcement which means ~4 weeks or 8 weeks. At the same time, Democrats and Republicans will be going head to head over Biden's latest fiscal stimulus proposal. The GOP is hellbent on NOT raising the debt ceiling which could lead to technical default sometime in the next 8 weeks. In August 2011 technical default on Treasury obligations shaved a cool -20% from the S&P 500. But before any of that happens we have the looming expiration of Federal pandemic unemployment assistance on Labor Day this weekend. Which means that regardless of Fed or Congress actions, a major reduction in fiscal stimulus is set to take place imminently, with the economy already slowing and institutions already rotating to recession plays.

Removing unemployment support for the middle class ahead of a looming recession amid Congressional gridlock in world history's largest asset bubble is a recipe for rioting followed by rich man's panic. The house will be moving like a rummage sale. One could not possibly imagine a scenario more conducive to a paradigm shift in "bailout ideology", which is long overdue. 

In addition to all of the U.S. risk which is being assiduously ignored by investors, there is the risk out of China which is slowing even faster than the U.S. Recently, the PBOC has been very actively increasing liquidity and cutting its bank reserve ratios which of course is weakening the Yuan. Meaning, the U.S. is about to tighten monetary policy at the same time as China is easing monetary policy, which is 2015 deja vu. Emerging Market disaster. But as we've already seen twice in the past six years, U.S. investors are firmly in the ignoring risk mode of operation.

Most people don't understand or believe in social mood. They don't acknowledge the extent to which herd thinking guides their own thoughts and actions. They are both beholden to competitive conformity and ignorant of it at the same time. They believe that THEY are fully in charge of their own actions, and it's everyone else who are the blind sheeple. Never before has this widely shared blind spot been more massive and lethal than now. It's clear from this dire set of adverse circumstances that the human mind is only capable of accepting a certain degree of bad news before it enters the mental fetal position which is where this society is hiding right now.

It's clear that the Fed left their foot on the gas too long and now this robo rally in risk assets is out of control. Likewise, they've bailed out corruption so many times that now the record lies are as out of control as this market. 

"FOX Business' Stuart Varney, during his latest "My Take" on "Varney & Co.," argued the markets keep climbing despite "pretty grim" news and argues everyone benefits from the surge in wealth creation"

STUART VARNEY: I've been covering the market since 1975. I've seen crashes and rallies, but I’ve never seen a stock price surge like the one we're in right now. It’s a stunner"

Technically it's true. In a Ponzi scheme, the morons who buy grim news with both hands are the sole reason for the record highs.  

Below are the "record highs" Reg Varney is referring to:

The U.S. Dow, Global Dow, small caps, and cyclicals have yet to confirm the S&P 500's latest all time high. 

Bond yields are at critical support:

Option skew is tracing out a familiar form. Twenty nine out of the top thirty highest skew readings are ALL in 2021 (since 1990), a staggering statistic.

2021 is officially the year in which the smart money secretly made massive bets on a market meltdown while at the same time telling the public this will all end happily ever after. 

As of yesterday's close, semiconductors were up 8 days in a row - the longest streak since the COVID rally began. This pattern is reminiscent of the February high which happened to be a bull trap:

"Peter Boockvar, chief investment officer at Bleakley Advisory group, said prices are rising at “a really out of control pace that is unsustainable and unhealthy.”

For now, it's fun and exciting. 

In summary, blatant market manipulation by central banks,  Wall Street momentum algos, and Reddit chat rooms has concealed the tremendous risks that lie under the surface of this market. Which has led investors to become massively complacent in the face of lethal risk. Just because market manipulation is now fully legal doesn't make it a great idea. 

A lesson this Idiocracy is going to learn the hardest way possible.

The Point Of No Return

All of the growing divergences emanating from the 2008 collapse were massively amplified by the pandemic and its continuous monetary bailout for the ultra wealthy. Fast forward and we can now boast of having a fully virtualized economy with the virtual prosperity to match. Why that's good, is not for me to say. Sadly, due to investors' sole fixation on return ON investment, their unrealized gains are reaching the point of no return OF investment...

Ironically, the confab planned for Jackson Hole Wyoming has been virtualized due to the delta variant. The same Fed that predicted this variant would have no effect on the economy just canceled their own in-person convention, but of course they kept their economic outlook the same. Why? Because they only trust data that's at least three months old. 

Fittingly, we also learned that Jackson Hole Wyoming is the wealthiest enclave in the United States. The only place more ironic to discuss inequality being Davos Switzerland, site of the annual World Economic Forum for the rich and famous. With a massive fiscal cliff in unemployment benefits looming just over a week away, these JHole virtual attendees will discuss how they can solve the problem they intentionally created aka. the fake wealth effect. 

"The wealth effect is a behavioral economic theory suggesting that people spend more as the value of their assets rise. The idea is that consumers feel more financially secure and confident about their wealth when their homes or investment portfolios increase in value. They are made to feel richer, even if their income and fixed costs are the same as before"

Any blind man can see below that monetary policy is no longer working. It's now having a negative effect on the economy as over-leveraged consumers realize their liabilities are going UP in lockstep with the super asset bubble. Those who have any assets at all.  

In other words, the virtualization of prosperity is not as good as it sounds. 

Heading into this meeting, risk asset markets are celebrating a massive short covering inequality rally attended by chasmic divergences not just in U.S. markets but in global markets as well.

After all, you never know what the Wizards of Oz will say about their money printing plans. 

This weekly chart of Nasdaq highs-lows indicates that market participation is now going in the OPPOSITE direction of the index. In the lower pane I calculated the number of new weekly lows attending an all time high in the index. This is by far the largest number in the life of the dataset (1986).

Also as we see, this week gamblers are pushing the index even higher into the point of no return of investment:

From a cyclical standpoint, the divergences are equally dire. Here we see last week's NYSE new highs going in the opposite direction from the S&P 500:

The Dow has yet to confirm this week's S&P high, and Transports have yet to confirm last week's Dow high.

Which is a major violation of Dow Theory which posits that Industrials and Transports must confirm the rally or it will fail.

On the weekly view, here we see banks are three wave corrective ahead of the Jackson Hole symposium due to massive short covering ahead of the meeting:

Zooming out to the global perspective, we see that Nasdaq Highs-Lows are now tracking Chinese stocks 1:1.

We also see that Chinese stocks (black line) are tracing out a pattern very similar to the pattern in 2015/2016 ahead of the global crash. This time around however, global central banks are already ALL IN monetary dopium so they will be shooting blanks in this global crash.

The impending infrastructure bill which is now stuck in Congress due to the debt limit is putting some bid back in cyclicals this week, however oil is trading like a brick. 

Oil's crash in 2015/2016 seemed like a big deal at the time until last year's meltdown. Here we see inflation expectations are trading 1:1 with crude oil. Which is why inflation pundits are ALWAYS wrong.

In summary, in two weeks pandemic unemployment benefits are ending for 7.5 million people, with payrolls stuck at 2017 levels. 

The pandemic is officially over and everything is back to normal. 

With the virtual economy at their back, gamblers are ALL IN virtual prosperity.

The term tempting fate comes to mind. 

Unfortunately, amid all of these massive divergences, bulls are ignoring the fact that recession stocks are now leading this rally. 

Why that's good, is not for me to say.

Fool Me All The Time, Shame On Me

Blogging in a denialistic society is like pounding sand up one's own ass. The lonely sheeple are on a permanent vacation from reality. They have outsourced all thinking to their trusted psychopaths. Millennials at least have an excuse for not seeing this coming, this will be their first margin call of a lifetime. Very exciting. The rest of this society has made a way of life out of ignoring risk, and central banks have ensured they are highly incentivized to do so...

Mid-week the Fed minutes monkey hammered markets when it was "revealed" the Fed plans to taper their asset purchases starting this year. Deja vu of the retail sales "shocker" earlier in the week, this "news" should have come as no surprise to markets and yet it did. Why? Because there is nothing priced into these markets except for fantasy, delusion, denial, and misallocated capital on a biblical scale.

Even before the Fed actually tapers, this shift in policy means that U.S. monetary policy is now out of synch with the rest of the world. This is putting a strong bid under the U.S. dollar to the detriment of Emerging Markets which were already weak in the first place.

Here we see the Hang Seng has ended this week in a very precarious position, which is highly reminiscent of late August 2015. The combination of ever-increasing restrictions placed on Chinese companies by Chinese authorities and the U.S. restrictions on Chinese companies is shellacking Sino-Asian markets.

And, as we see, the contagion is spreading:

On the tapering news, U.S. bond yields collapsed as inflation expectations fell in anticipation of tighter monetary policy. This decline in T-bond yields is the opposite of what most pundits expected since they assume the Fed is the only one buying Treasury bonds. In other words they STILL don't understand the bond market.

Then there is the issue of the impending fiscal cliff which will further monkey hammer already collapsing consumer sentiment when Federal unemployment benefits end on Labor Day of all occasions.

You can't make this shit up. 

Here we see a death cross of the 50/200 dma on the Thirty Year Yield:

Oil was crushed on the week and oil stocks rolled over into third wave down. A very good indicator of where we stand on this economic delusion. 

While the Nasdaq aka. Microsoft, continues to retain its bid, I noted yesterday that the divergence of stocks BELOW their 50 day moving average with the index ABOVE the 50 day average is at a 20 year high (life of dataset), only eclipsed by the breakout last April. Meaning that record breadth divergence now bookends this entire central bank fabricated rally.

Here we see a weekly view of Nasdaq breadth which is at the lowest levels since March 2020:

In summary, the risks and divergences coalescing at the end of this summer far exceed those we witnessed one year ago when the market tanked in late August/early September.

Next week is the Fed's annual symposium in Jackson Hole Wyoming. A chance for the Wizards of Oz to communicate their money printing plans for the future.

Ironically, the topic of this year's annual symposium is how to address the income inequality that is the intended outcome of monetary policy. We know one thing, there will be no "solutions" offered at this year's symposium, which means it will be left to markets to "fix" inequality.

The same way that financial stability was "fixed" in August 2008:

The hard way.

"It’s a risk that many investors appear to be overlooking ahead of the annual conference for central bankers

“Markets abhor equality to the extent that it stands in the way of rapid earnings and dividend growth”

Bread And Circuses To The End

"Bin Laden wanted to lure the United States into Afghanistan, which was already being called the graveyard of empires. The usual object of terror is to draw one’s opponent into repressive blunders, and bin Laden caught America at a vulnerable and unfortunate moment in its history"

Wright, Lawrence. The Looming Tower 

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

This society has not even the slightest clue about world history,  and more importantly they don't want to learn. Their entire existence is now predicated upon denial and amnesia. There is no audience for truth. The world is burning, so what else to do but focus on spectacle. 

Twenty years in Afghanistan was not enough we are told. No doubt this pullout was a gong show - eerily reminiscent of the fall of Saigon in 1975. There is always going to be panic at the end when the empire is leaving. We are to believe that Biden was going to solve the riddle left by Bush, Obama/Biden? and Trump i.e. how to get a Stone Age Islamic patriarchy to embrace McDonald's, DisneyWorld and The Kardashians. No mean feat. America's longest blunder by far - twice as long as Vietnam the blunder it was ostensibly meant to erase. 

Similarly in markets, forty years of deflation later and the greatest concern today is inflation. There has been no sign of inflation since 1980, nevertheless that is the number one fear. None of these fools realize that under the current global paradigm inflation is no longer possible. There is far too much debt and and the slightest rise in interest rates would implode the super credit bubble - a process that may already be underway. The next bailout will be for governments only. I predict no public appetite for a private sector bailout this time around. Which is going to leave far more bankrupt and margined out bagholders than existed in 2008. These sheeple are up shit creek already but they don't know it because they are dazzled by their asset supernova. I recently showed that social mood has collapsed vis-a-vis consumer confidence and yet somehow today's retail sales miss "surprised" markets. This is the first time in market history when the market is lagging even the most stale of data. Any blind man could see that consumer sentiment has collapsed, but not an economist. Case in point, perma bull Ed Yardeni says we are on the verge of the holy grail of Supply Side Voodoo Economics - a jobless economy. 

Sheer nirvana. 

Now, we only need to figure out how get robots to go shopping.

Meanwhile, at the cusp of jobless nirvana we just learned that the only faster market double off a bottom was 1933 when markets imploded soon after. 

"It took the market 354 trading days to get there, marking the fastest bull market doubling off a bottom, according to a CNBC analysis of data from S&P Dow Jones Indices going back to WWII. On average, it takes bull markets more than 1,000 trading days to reach that milestone, the analysis showed"

As I mentioned in my last post, markets are going cold turkey on BOTH fiscal and monetary stimulus at the same time in September. In other words, the only "valid" reason to buy these insanely overvalued markets is going away in under a month. Which means the dilemma facing gamblers today is whether markets will crash BEFORE or AFTER stimulus removal. Either way, not long to find out. 

In the meantime, Wall Street will continue to dump junk IPOs into this market until the market breaks and the inevitable global margin call arrives. Every time a new IPO is issued, money managers must sell an existing (usually) Tech stock to make room in their portfolios. Which is a big reason why Nasdaq breadth is imploding:

Another reason is because Emerging Markets and China in particular are now going bidless:

In summary, the biggest rally since 1933 sports the largest breadth divergence in forty years - driven by a Wall Street pump and dump that is now bet against by the same guy who predicted  the subprime meltdown.

What's not to like?

Fool me all the time, shame on me

What we learn from history is that hubristic morons don't learn from history.