Trump Casino 2020: Rigged To Explode

No surprise, Trump is trying to buy another election using useful idiots' money...

Markets have already decided that Trump is going to get re-elected. Which means there is no margin of impeachment:

"A concentration of billionaires who descended this week on Davos, Switzerland for The World Economic Forum’s 50th annual meeting are harboring a “dirty little secret” about the U.S. presidential election in November, says the Hoover Institution’s Niall Ferguson.


“The dirty little secret of Davos 2020 is they all need him to get re-elected”


It's obviously not really a "secret" that the super-rich love Trump. His base still actually believe that he is a man of the people, but anyone with an IQ over five doesn't believe that crap. He is the Fifth Avenue poser loved by billionaires and useful idiots alike. Only in Hollywood. 

Here is where it gets interesting. I mean really interesting:

We have ubiquitous indications of record positioning and record valuations almost ten months ahead of the election. If the election were held tomorrow, these optimistic sentiment factors would be a huge benefit to Trump. However, there has been no instance in world history where a bubble of this magnitude has remained elevated for anywhere near that amount of time.

Which is to say that markets are in no way prepared to deal with any form of reality. They are priced for Trump.

Here is Trump's approval rating via Rasmussen:

What we see is that his approval fluctuates with the market, however upside correlation is weakening. Meaning there is all downside no upside, both for over-priced markets and Trump's re-election prospects. Which are now one and the same. 

As we saw one year ago, Trump's approval rating tanked with the market:

What could go wrong with voters betting with record leveraged capital on re-election ten months hence?

For one thing, Healthcare and Biotech stocks have surged in the past three months since Elizabeth Warren fell back in the polls. Here we see that Biotech evinces the exact same three wave pattern as indicated by the Global Dow, banks, small caps, retail, autos etc.

In other words, Trump's re-election prospects are tracking social mood. And vice versa:

What people are saying about Elizabeth Warren is that she peaked too early in the polls. A year early to be exact. I suggest that's not true at all.

I suggest that Donny peaked too soon in the Dow. And when it rolls over and crashes like a Boeing 737-Max, so will his chances of getting re-elected. And then all of the super-rich will realize that they made the wrong bet. And there is not going to be another bailout.

Now let's put one and one together:

The dirty little secret of Davos 2020 is that the super-rich all need Trump to get re-elected.

But what they REALLY need are more useful idiots:

Because it's not as if their own cash is going to keep the Dow at this level:

The Last Days Of Arrogance, Greed, And Buffoonery

Somehow Trump, who has been a well known con artist and failed businessman his entire life, has convinced half the country that he is the solution to the nation's problems. When in fact he personifies everything that is wrong with America right now. His ill-fated reign will be viewed as nothing more than arrogance, greed, and buffoonery on a biblical scale. With a biblical ending to match...

What is happening at Boeing is symptomatic of what is taking place across corporate America: Greed, greed, and more fucking greed. Leading to inevitable implosion:

"The combination of arrogance, ignorance, and greed should and will haunt Boeing for eternity"

The Boeing 737 was originally designed in 1966. Until 2019 it was the highest selling commercial aircraft in history. Due to the 737 Max debacle, however, it has now been surpassed in orders by the Airbus A320. It's an old design that has been modified over and over again for decades. It's Boeing's cash cow and therefore they never wanted to replace it with a newer fully redesigned version which would require a full scale recertification by the FAA. So they just kept modifying the original design and pretending it was the same plane. The company was given a long leash to self-regulate themselves and they abused the privilege for maximum profit and minimum safety.

As of today, the plane is officially out of production for the first time in over five decades. No one has any clue when it will come back into production, because it's now an inherently flawed design.

"In one email exchange in April 2017, an unnamed employee wrote: "This airplane is designed by clowns who in turn are supervised by monkeys."

These messages refer to Boeing employees telling lies, covering up problems and treating regulators with contempt."

In February 2018, a Boeing worker asked a colleague: "Would you put your family on a Max simulator-trained aircraft? I wouldn't."

"No," came the reply."

Up until today, the damage to Boeing's stock price has been surprisingly minimal. However, today that changed.

The largest weighted stock in the Dow is now rolling over hard, taking down the World's best known stock index.

The Boeing supply chain has been decimated:

This company builds the fuselage:

Extreme greed just cost 2,800 families their income:

Trump suggested that Boeing rename the plane to solve the image problem. That way no one would know they are on a deadly aircraft designed by clowns.

"First, I would FIX this aircraft. Then, I would rename it to SuperPlane, and add some cupholders"

While we're on the topic of clowns, we found out last week that Trump informed his generals that he would never be going to war with them. And they all replied:  "We know".

“I wouldn’t go to war with you people,” the book quotes Trump as saying to the military officials. “You’re a bunch of dopes and babies.”

Getting back to the final implosion of Clowntopia:

Last year NorthmanTrader conjectured that when Boeing implodes due to arrogance, ignorance, greed, and buffoonery, so will the Dow.

Now we'll find out.

Reach For Implosion

We are witnessing an epic reach for yield, at the end of the cycle. This can't come as more of a shock. Despite a decade fighting deflation, deflation is somehow STILL the least expected outcome. Trust in central banks is complete. This will be CATACLYSMIC...

You can't make this shit up:

Two years ago at Davos, hedge fund titan Ray Dalio said that anyone holding cash would feel stupid. Within days of that comment, the market crashed into Vixplosion 1.0, making Ray Dalio look stupid. Now, two years later amid identical FOMO and 10x risk, he says the exact same thing:

"The billionaire founder of the hedge fund Bridgewater Associates said...that investors should be buying this market, rather than seeking safety in cash"

A monthly fund-manager survey conducted by Bank of America found that managers were holding on to their lowest proportion of cash since 2013"

If the guy running the world's largest hedge fund can be this consistently clueless, what chance does today's home gamer have? None.

Dalio advises a global diversified portfolio. Unfortunately, central banks have driven global correlations across ALL risk asset classes to 100%. Therefore diversification will do NOTHING in this environment. The only safe haven IS cash - the one thing Dalio advises not holding. 

The Chinese Coronavirus is already pounding Emerging Markets:

For those who want more proof this is the end of the cycle, here we see the BDI continuing its 2008 magnitude crash:

Palladium is going late cycle parabolic. This is the metal used in cars for catalytic converters, to lower exhaust emissions:

Small caps are still not confirming this rally:

The two most shorted stocks in the market are Tesla and Apple:

What the article gets wrong is that (over) valuation based upon price/sales ratio and market cap / GDP, is higher today than it was two years ago. Also, sentiment is even more extreme today (see below).

But the REAL difference from two years ago, is that Tech concentration is far higher today than it was two years ago, solely due to earnings multiple expansion:

"Nowhere is this more evident than with Apple, a stock that’s doubled in the past year with virtually no observable change in its financial performance."

In summary, those STILL trusting proven morons are going to feel pretty stupid

"As founder of the world's largest hedge fund, what I advise is everyone hold less cash"

By the way, Dalio's fund, Bridgewater, are BIG gold lovers. 

So plan accordingly, as Wall Street ignores the most deflationary environment in WORLD history:

Inflation is a consensus trade on Wall Street. Gold net speculative (long) is at record highs (lower pane):

By way of comparison to Y2K, here is another hedge fund fool smoking crack. Back in 1999 the U.S. was running a budget surplus not a trillion dollar deficit. The Fed balance sheet was unchanged. AND the Fed Funds rate was 6.5% versus 1.5%. The only thing that's the same is the Tech bubble.

The only thing legendary about today's mega investors is their decade of monetary bailouts.

Here comes (asset) deflation on a scale no one has ever imagined before. The exact opposite of what EVERYONE expects...

Davos 2020: A World Run By Proven Idiots

History will say this was a society of cowards living in the fetal position and taking every drug known to man to escape the inconvenient truth. It didn't work...

Not for lack of trying mind you

The downside of electing trusted morons to office is that there is no leadership when the vacation from responsibility unexpectedly explodes in your face:

So far, my prediction for 2020 is 100% on track. First the blow-off top, which is now approaching the right shoulder peak to complete the two year topping process.

Here we see the Global Dow, which includes all major markets, including the U.S. Still below the highs from two years ago. A three wave retracement, predicting third wave panic collapse.

Which is the next step in my 2020 prediction. Panic collapse. Then rioting. I predict Trump will be in jail within a year from now. Handed his orange jumpsuit by his own party.

To be fair, I thought their last circus clown would implode the party. 2008 came close. Fear was extant. However, Fed Chairman Ben Bernanke looked to Japan for money printing inspiration. It took the better part of a decade to get Republicans onboard with simulated prosperity. Over the course of eight years, they never bought into the Obama recovery.

That was Trump's job to get them fully onboard with fraud. They haven't figured out that using misallocated capital to vote for alt-reality, doesn't work.

Look up to the Global Dow above, look down. Any questions?

Apparently it takes a con man to fool a con man. Recall, Trump was elected based upon the "deaths of despair" campaign strategy. He actively capitalized upon the blue collar despair that was a direct result of the Bush housing bubble and Global Financial Crisis. Ironically, the leader of the same party that caused the crisis was able to capitalize on the anger resulting from the crisis. A skill Trump learned from the WWE.

How to capitalize on vast ignorance.

It was all a fraud of course, but that's beside the point. It worked. The fox was back in the hen house. Goldman Sachs is back in at Treasury as if 2008 never even happened. Let's recap going back to the last decade: Wall Street creates the subprime market to give cheap money to insolvent homeowners. Next they make massive bets against the housing market using massively leveraged derivatives, the over-leveraged housing market crashes, then the derivatives market crashes, Goldman Sachs at Treasury bails themselves out. Now, Goldman Sachs is back at Treasury overseeing the plundering of the Treasury. In 2019 they collapsed the repo market with record debt issuance to fund offshore bank accounts via the Trump tax cut. The resulting Fed bailout just further inflated the already big, fat, ugly Trump super bubble, featuring the largest and fastest Fed balance sheet expansion since 2009. Full monetization of the Trump deficit.

When he fired Janet Yellen and replaced her with Jerome Powell, Trump was the first president in U.S. history to intentionally politicize the Federal Reserve. In 2019 and now in 2020, Jerome Powell is FULLY financing Trump's deficit.

So far, so bad. The Nasdaq is now the most overbought it's been since the DotCom bubble (based upon RSI).

The crash ratio has reached a new cycle extreme:

Zerohedge just recapped the repo market saga, using Faux News patented fact suppression techniques. In taking on bailout king Neel Kashkari - John Paulson's right hand man throughout the 2008 bailout extravaganza - Zerohedge assiduously forgot to mention that Trump's deficit is what precipitated the repo crisis, when they data mined the BIS analysis on this topic. Here is the part they left out:

"After the debt ceiling was suspended in early August 2019, the US Treasury quickly set out to rebuild its dwindling cash balances, draining more than $120 billion of reserves in the 30 days between 14 August and 17 September alone, and half of this amount in the last week of that period"

When did the repo crisis strike? September 16th.

Fact suppression is now a standard formula used in every aspect of this imploding old age home. One could say that it's a profit making formula intended to continue the status quo as long as possible. It spreads ignorance far and wide, and otherwise soothes the nerves of the aged masses. It's a subscription model.

We have somehow cultivated an entire generation of climate deniers who believe that they are now "scientists". Super dunces who believe that they are more intelligent than the trained experts on the matter. There will never be 100% consensus on ANY subject. You can find denialists on every topic known to man, including whether or not the Earth is round. 

Be that as it may, turning one's back on critical facts and data is a most dangerous game to play. To supplant wisdom with vast ignorance and arrogance, speaks to a society no longer having the courage to face reality. A bloated Idiocracy addicted to consumption. Eating itself to death. It can only end one way - with extraordinary shock and awe, due to the steady accumulation of leveraged stupidity.

Here we see the oil and gas industry sitting out the super Tech bubble and giving lie to Trump's fraudulent recovery:

We will all go down in history as either being for this epic con job or against it. Or, for those truly out of the loop, taken down by the most facile and corrupt known con man in U.S. history.

Choose accordingly.

The first step on the road to recovery is for today's ubiquitous all-knowing idiots to acknowledge they're totally clueless, and always have been. That will be a painful realization. No question about it.

"They waited eight years to get excited about the recovery, elected a well known con man at the end of the cycle, de-regulated corruption, and then final exploded with extreme dislocation. Not one of them saw it coming. It was human history's biggest circle jerk"

There Is No Alternative To Crash

The problem with believing in Disney markets is that no one tells you when the ride is ending. Market pundits are tripping all over themselves to raise their Ponzi estimates for 2020. As their price projections for the year get surpassed in the first three weeks...

The U.S. is the only market on the planet making new highs in dollar terms, which is why the U.S. is the only game in town. But don't worry, because there is "Method in the melt-up":

"Barron’s predicted in 2017 that the index would hit 30,000, though we were too conservative in the timing: We targeted the year 2025"

In other words, the Dow is hitting the Barron's long-term price target five years ahead of schedule, nevertheless, the "melt-up" is just getting started. I didn't read the rest of the article because I don't subscribe to bullshit anymore. I cancelled all of my subscriptions to bovine excrement.

Below we see the Dow versus the rest of the world. We've seen this movie before. The last time the rest of the world (ROW) failed to confirm a new U.S. high, was of course in October 2018 when the U.S. peaked sans ROW, and then imploded -20%. The time before that as shown with the blue line, was in 2015.

It appears that the "TINA" (There is no alternative) to U.S. trade, only lasts so long before it implodes spectacularly:

Here is some more interesting "advice"

"Another way to think about, the ferocity by which stocks have climbed in the first three weeks of this year, S&P 500 gains have already exceeded the 2020 estimates for nearly half the 18 analysts surveyed by MarketWatch."

Meanwhile, a measure of how intensely the market has been bought is showing the highest reading since January of 2018"

But what could go wrong when volatility speculators are positioned far more aggressively than they were the last time volatility exploded?

Here is the good news for bulls:

“Ignore value at your peril”

The most overvalued market in U.S. history and this moron is saying ignore "value" at your peril. You can't make this shit up. There is no value. 

“When value underperforms to the extent we’re seeing now, there historically has been a sharp reversal.”

The last time this strategy experienced such extremely poor results, value put in three great years of performance, from 2000-2002“

As we see below, the S&P 500 dropped -50% from 2000-2002.

However, the real smoking of crack was reserved for Forbes magazine this week:

What it all points to is a corrupt industry that has sold its soul to central bank managed Disney markets. They don't get paid if gamblers sit in cash, so now they have come to a consensus of corrupt dunces that the bubble can only get larger.

It appears that Wall Street is giving one type of advice to their clients and another type of advice to themselves.

After all, for every seller there must be a buyer:

History will say it was 100% corruption at the end.

Should be an interesting week in Trump Casino.