Impeached By Implosion

The Trump circle jerk reached a fevered pitch this week, as 89% of Banana Republicans now approve of this unprecedented corruption. They are voting with their wallets as record capital is now leveraged to Trump Casino...

Since Trump's own den of thieves won't remove him from office, it falls on his MMT Financial Weapon of Mass Destruction to do the heavy lifting. Detonation sequence has been initiated. There is now a ubiquitous belief within the Republican Party that non-stop lying has no cost associated with it. We are about to test that hypothesis:

The stakes have never been higher, as Trump has cleaved this country like never before. You either believe this guy is the saviour or the Anti-Christ, there is no middle ground. The fact that this Super Clown is a showcase for ALL that is wrong with America, shows how far down the Road to Perdition the GOP has sprinted behind their beloved pussy grabber.

"The fact that the 10 most polarized years have all occurred in the past 16 years -- affecting both Democratic and Republican presidents -- underscores how politically polarized the nation has become"


89% of Republicans approve of this criminal.

Who can they blame when this all explodes, but the dunce looking back at them in the mirror. What GW Bush couldn't Mission Accomplish, this known fraud will finish. 

In other words, my prediction for 2020 is on track. Panic and rioting the next stop. 

Trump's impeachment circus was only half the usual spectacle this week. Ponzified billionaires in Davos were tripping over themselves extolling the Trump super bubble and the last chance to get in before meltdown. Hedge fund titan Ray Dalio who famously derided cash two years ago at Davos right before VixPlosion 1.0, said the exact same thing all over again this week, "cash is trash". 

Of course, the "Black swan" event of the week was the burgeoning Coronavirus in China. Now spreading worldwide. Emerging Markets and in particular Chinese stocks led the way down. All of which comes at a bad time for markets, as the Chinese Lunar New Year begins this week. The worst performing stocks cross-listed in U.S. markets, will now be bidless. 

Over in the UK, Boris Johnson signed the articles of Brexit and declared a fantastic moment for disintegration. Judging by his dishevelment it couldn't have come a minute too soon.

Getting back to Trump Casino, gamblers were finally reminded this week that one-way markets go down sometimes. The headline on Friday morning indicated the longest overbought stretch in almost FIVE DECADES:

"FOREX.com looked at how many times the S&P 500 has closed below its 10-day moving average over the past 70 days, a time frame used because it entails the time since the Federal Reserve started expanding the bond holdings on its balance sheet.

The result is that the index has had just five such closings over the period, the lowest going back to 1972, or some 48 years"

Which is where this gets interesting, because the Fed balance sheet had a major drawdown this week. Picture record extreme positioning, 48-year overbought condition, Fed balance sheet withdrawal, and stock buyback blackout all at the same time. Because that's what we are seeing now. Speculators are piled into a casino with no exit:

All of which means that the level of risk right now is ludicrous, however because the party of fraud must propagate non-stop delusion, the masses remain wholly ignorant.

Banks got pounded this week, as the reflation trade rolled over hard.

Bond yields imploded...

Big Pharma rolling over

Global Dow has gone nowhere since the last VixPlosion:

A moonshot in Intel saved Tech from implosion, however semiconductors rolled over this week:

My supposition is that the epic short-covering that attends the end of the cycle, is now over. The great "value rotation" won't survive lower bond yields and recession.

The fact that Utilities led this week should not be taken as a positive sign. It's the final rotation.

The Fed sponsored two risk on rallies in the past year. First via their interest rate "pivot" in early 2019, which ran out of steam in the second quarter, and the second rally began with their Trump repo bailout. We can clearly see the two rallies via banks. The bond market never believed any of it.

Something about tax cuts for the rich is not reflationary, which we learned the hard way in late 2018. Something about monetized tax cuts for the rich that is also not reflationary.

A lesson that will be learned right now. 

"Alarm bells are sounding in volatility markets amid a set-up that traders warn has some resemblance to the period preceding the February 2018 risk rout"

“This January VIX settlement is looking similar to January 2018 in that the new front month VIX spread between February and March is going to dramatically shrink the level of contango"

Bueller?

In summary, you can be ignorant or you can be arrogant. But you can't be both, on a biblical scale.

Davos 2020: Record Global Fraud

The masses have been led to believe that everything is going fine economically, sadly nothing could be further from the  inconvenient truth. Trump has weaponized financial markets against the masses, in order to fabricate the illusion of synthetic prosperity. In the process creating the biggest and most explosive bubble in human history...

I am sure that today's "elite" gathered at Davos are more than happy to switch the conversation to climate inaction, in order to avoid discussing inaction on economic inequality, which is solely to their benefit: 

Global corporations are the source of ALL global deflation. 

Every time corporations swap out a high wage worker for a low wage worker they create underemployment, which is deflationary. Underemployment is the biggest economic crisis of our age, but it's never discussed. Today's politicians and economists eager to show progress where there is none, constantly tout the lowest-ever unemployment rate, which conveniently only includes people who are actively seeking work. Underemployment includes those who are working part-time because they can't get full time work, those who have been laid off and forced to take a low wage job, and those who graduate but can't get a job in their chosen field - educated baristas. The underemployment problem has been rampant since 2008. And totally ignored, by everyone. 


Labor share of the economy:

Unfortunately, there are no shortage of low wage workers on this planet. Which is why on a global basis, there has never been anything approaching "full employment". Which is also why wages have collapsed in recent decades and will remain collapsed until this problem stops being ignored. Corporations can easily arbitrage one worker against another, one country against another. They do it every day. 

Central banks can't create these record low interest rates in a vacuum. Those who would blame central banks for this crisis, ignore the underlying cause of deflation, which is underemployment. They ignore the root cause, for political reasons, and of course ideological reasons. They can't bring themselves to blame the private sector for this epic disaster. Uncontrolled greed, the root cause. The number of people who benefit from this model has steadily decreased, and now they can all fit into a small town in Switzerland. where they can pretend to be fixing problems. When in fact they are the sole beneficiary of NOT fixing the problems. 

Central banks have followed corporate deflation lower, essentially monetizing poverty. This poverty capital has now been over-invested in every industry on the planet. A ticking time bomb, that when it explodes, will reveal the true cost of 2008. Cheap poverty capital has created more debt and has automated more jobs. It's not the solution, it's the problem. It's a deflationary death spiral. While the quantity of jobs has never been higher, the quality of jobs has never been lower.

Corporations have systematically strip-mined wages, pensions, and now healthcare to continuously increase profit. What appears to work "great" at the individual company level, is a total disaster economically, on an aggregate basis. Companies are cannibalizing their own customer base through underemployment. 

The elimination of pensions has placed all expectations of retirement on an historically overvalued stock market. Which is why this society has invented so many fraudulent gimmicks to keep stock prices artificially inflated. First off by engaging in record debt-financed stock buybacks to reduce share count and give the illusion of growth. Secondly of course via central bank liquidity programs. Sadly, none of these short-term gimmicks will work longer-term. This is all just an epic fraud. The current mega bubble masks the underlying collapse in sustainable aggregate profits. Which peaked in 2014 on an aggregate basis.

All of this fraud has culminated in the Trump Super Bubble - the largest combined fiscal and monetary financial weapon of mass destruction in human history. Bought with both hands by brain-washed masses, in the prospect of early retirement, which is forthcoming far sooner than expected.

Trump has now weaponized financial markets against the masses. Human history's biggest asset bubble has artificially inflated his approval rating. In this mega financial bubble, Trump is listened to and cheered, no matter what. Human history's biggest Jedi Mind Trick:

In summary, as interest rates fall in lockstep with underemployment, the stock market is now levitating at the expense of the economy. Accelerating its melt-up as the economy marches steadily towards recession, as predicted:

"The worse the reality of the economy becomes, the more we take on the reflexive belief in further and dramatic monetary expansion and the more attractive the stock market looks"


When this final bubble bursts "unexpectedly", policy-makers and the herd at large will have to make an inevitable choice, to choose the economy over stocks. At that point real "valuations" will converge with economic reality. Which means that even "cyclically-adjusted" earnings projections today, are not anywhere near the realm of reality.

This is not the end of another cycle, this is the end of a fraudulent way of life.

Just remember one thing, "No one saw it coming".

FOMC: Fear Of Missing Crash

Gamblers are super lubricated for what comes next. Because now EVERYONE knows that printed money is the secret to effortless wealth...

First, some perspective:

Emerging Markets are imploding deja vu of VixPlosion 1.0: 

The leading (5g) semiconductor stocks are rolling over...

Biotech is imploding, on the right shoulder of the two year market top.

Social mood is done.

Recession stocks are leading

Oil is getting shellacked:

Speculators are ALL IN

Goldman is bullish

Volatility specs are leveraged up:

"A breed of systematic trader acutely sensitive to volatility is charging into U.S. stocks at the kind of pace last seen before “volmageddon” rocked Wall Street almost two years ago."

“If any unpredictable but tiny shock causes a correction in the upward momentum of a U.S. stock price index like the S&P 500, systematic trend-followers are likely to rush into exiting from their current bullish trades simultaneously,”


"It was a tiny yet unpredictable Black Swan event"

New extreme level in crash ratio:

All systems go

A Party To Fraud

Today's grasshoppers are reveling in the zeitgeist of mass insanity. Seeking strength in numbers. What happens when you get to the end of the road and you have nothing left to believe in - No truth and no reality? Fear, that's what happens. Today's "value voters" are about to find out, some things should never be sold...

The GOP has thrown it ALL away on Trump. All that's left is a circle jerk of rampant stupidity, which will forever define this era. The "system" based upon using people up, had to use EVERYONE just to pretend it wasn't broken.

This impeachment was the last chance to save the Party. However, epic greed and asinine hubris prevented them from considering that option. Now, they've bolted the Party to an out-of-control megalomaniac...

This impeachment farce is now running entirely along party lines. Which is making a mockery of a Constitutional process. No witnesses, hence no real trial. History will say it was a Third World Kangaroo court. Nevertheless, it has had the fatal effect of directing all attention away from the real world and putting the spotlight on Circus Trump. 

Few if any Republicans seem to understand what is now at stake. From a markets perspective, stocks are ginned up beyond all control to create fake pre-election hype. Secondly from a system perspective, now the entire U.S. capitalist system is leveraged to explosion, as never before in history. And third, arguably most importantly from an ideological perspective - all conservative principles have been wholesale abandoned to keep a known con man in power.

I used to be a hardcore libertarian, before I recognized that right wing principles were being weaponized against the U.S. workforce. After that, I wanted no part in the ongoing liquidation of the middle class to fatten offshore bank accounts. I certainly didn't want my own stated principles to be abused for evil intent. 

That gambit got the GOP as far as 2008 and global financial collapse.  

Now, the party has gone all the way and abandoned ALL of its former principles, merely to keep a known con man in power. They never knew when to stop begging for power. Now, all democratic principles have been abandoned. All fiscal principles abandoned. And all monetary principles now in the hands of a bankruptcy expert. In other words, in order to win a battle they lost the war. They squandered their credibility and ideals in every direction. All just to make bailout queens richer, at the expense of the middle class.  

To say that history will not be kind is a ludicrous understatement. Today's fools in the Senate have not even the slightest sense of history or perspective on how this will look in retrospect. Today's masses are reveling in the zeitgeist of mass insanity.

The Republican Senate in 1974 made a shrewd calculation that paid off - to impeach Nixon and excise the cancer from the GOP. This current band of idiots just bolted themselves to a known con man. 

For eternity.

The abandonment of principles however, is where it will really hurt the Libertarian movement. Now those ideals have been hijacked by con men and weaponized against the populace. When this all explodes, those "freedom" values will be associated with rampant criminality. Which points to the root cause of ALL problems: Selling credibility to the highest bidder. Those who truly value freedom should never have worshipped the false idol of self-interest at ALL costs. Some amount of moderation should have been in order for a festival of greed that history will regard as being nothing more than an epic Roman Orgy.

The Most Explosive Load Of Bullshit In History

“We are just in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination” - Paul Tudor Jones


Any questions?

Yesterday at Davos, billionaire Paul Tudor Jones credited the Fed for creating a Y2K-style asset bubble. Today, Trump blamed the Fed for keeping his big, fat, ugly bubble from reaching its full potential.

Who is right? Dumb or Dumbfuck? What they both have in common is getting everyone into human history's biggest asset bubble. Before it explodes...

Excuse me? How can this be true? I am told the exact opposite on Zerohedge. 

Every second article on Zerohedge blames the Federal Reserve for this asset melt-up. And yet their Casino-Bankupter-in-Chief totally disagrees. The alt-writers on Zerohedge know that when this bubble explodes, Trump will get a substantial amount of the credit for hijacking Fed policy. Therefore they must engage in active fact suppression. After all, Zerohedge themselves already admitted that Trump's trade war policy was intended to manipulate the Fed. The alt-writers on Zerohedge are getting out ahead of the inevitable rioting. Fair enough. No one wants to think that they themselves voted for the biggest Ponzi schemer in human history. Nevertheless, I would imagine it would help their active disinformation campaign somewhat if Trump himself wasn't constantly taking FULL credit for this asset bubble, while constantly blaming the Fed for keeping it "under control". In other words, Trump is 100% right - with himself at the helm of the Fed, the markets would have definitely exploded by now.

The key role that ad-sponsored disinformation plays in this overall con job, can't be overlooked. History will say that Trump's lies were weaponized against the masses, for fun and profit. 

Where it gets interesting is the army of idiots at Davos each one tripping over themselves to keep this asset bubble bubbling. Yesterday, billionaire Ray Dalio warned everyone to stay out of cash. Also yesterday, billionaire Paul Tudor Jones - the guy quoted above warning about the asset bubble - advised everyone to front-run collapse:


“We are just again in this craziest monetary and fiscal mix in history. It’s so explosive. It defies imagination,”

Asked if investors should sell now to avoid a blow-up like the one that took place in March of 2000, Jones said, “Not really. The train has got a long, long way to go if you think about it.”


The crazy train has a long way to go, despite being as overbought as it was in 2018 and Y2K.

Three years later, spot the difference in Trump's view of responsible Fed policy:

"By keeping interest rates at this low level, the Fed is being political. We're in a big, fat, ugly bubble and we better be awfully careful"
- Candidate Trump, 2016


"By responsibly normalizing interest rates to provide insurance for the next downturn, the Fed has held back my stock market"
- Incumbent Trump, 2020

In summary, as of today's close, it's not too late to self-implode on the Trump crazy train.

Just remember, "No one saw it coming"

Bueller?

An Inconvenient Implosion

Climate activists inform us that today's climate inactions are far too little. Expert climate deniers tell us these non-actions are far too much. The inconvenient truth is that these inactions are too little too late...

Therefore the "better" solution is to curl up into the fetal position and propagate denialistic disinformation until the MAGA Kingdom explodes spectacularly. By way of proving the amazing carbon-collapsing power of ignoring all problems until they can no longer be ignored. 

This society specializes in talking about problems non-stop in order to avoid fixing them. Bullshit is now America's number one industry. A specialty that has inflated human history's largest denial bubble. Sponsored by human history's lowest interest rates which are compliments of assiduously ignored global poverty deflation. What else?

This poverty capital has been over-invested in every industry on the planet, but no industry has misused more imploded demand capital than the oil industry itself. Of all industries, the Energy industry is by far the worst performing industry under Trump. And the least solvent.

And why have they performed the worst? Serial incompetence is one reason. And addiction to unfounded bullshit is another. However, the biggest reason is because that industry has been most in denial about the return of demand in a deflationary environment. In other words, while deploying record amounts of cheap capital, not once did they ask themselves why is capital so cheap?

The Energy industry is on the leading edge of self-destructive denial. A harbinger of what happens to those who ignore the inconvenient truth while demonstrating vast expertise in uninformed investment.

And who spread all of this climate disinformation, could it be the same buffoons who lied themselves into insolvency TWICE in five years?

Now extend that analogy to this entire society and Trump's continual assertion that this is "the greatest economy ever". An assertion that today is scarcely challenged by today's lamestream media. Unquestioned by academics. Gladly propagated by business leaders. And of course believed unquestioningly by sheeple at large. 

It doesn't occur to even one of them that if the economy is doing so well, why is capital STILL so cheap this far into the cycle. When EVERY other time in U.S. history rates were rising.


It's of course because we are in a "mid-cycle adjustment", on our way to happily ever after...

Waiting For Tech Super Implosion

The only stocks making new highs in Trumptopia are the ones Trump hates the most...

The MAGA fantasy bubble is leveraged to the dumb money index bubble. The dumb money bubble is leveraged to the Y2K 2.0 Tech Super Bubble. The Tech Super Bubble is leveraged to end of cycle short covering.

In other words, the entire world of denial is now massively leveraged to Tesla. By FAR the best performing large cap stock in Trumptopia, is the largest manufacturer of electric cars. You can't make this shit up...

Semiconductors are in parabolic blow-off top mode:

The two most shorted stocks are Apple and Tesla, both of which go up every single day. Whoever is shorting these stocks is overdue for psychiatric evaluation. Nevertheless, I find it hard to believe that hedge funds are shorting anything given that the concept of "risk management" is a relic of a pre-Central Bank bygone era.

Here we see the most overowned hedge fund names are in vertical mode, as overbought as they were two years ago:

Momentum Factor also two year overbought. This entire delusion being solely about momentum. How fast useful idiots can shovel money into Trump Casino. 

Before it explodes.

The Tech sector is exhibiting the same overbought pattern it did earlier in 2019 when it topped. This time the distance back to support at the 200 dma is much further:

That's the good news.

The bad news is that reflation is rolling over hard:

As is oil and Energy stocks:

Ironically, the MAGA ETF - consisting of the most corrupt industries in the United States, failed to confirm the all time high:

Politically Responsible Investing®

"The innovative strategy behind the MAGA ETF that allows you to invest in companies that align with your Republican political beliefs. The MAGA Index is made up of 150 companies from the S&P 500 Index whose employees and political action committees (PACs) are highly supportive of Republican candidates"

This is a minor preview of how this farce ends...

As I said recently, comparisons to Y2K are entirely specious.

Whereas that bubble explosion did not immediately impact the economy. This bubble IS the economy...