Thursday, March 30, 2017

Everyone Gets What They Deserve

"Then the robber barons lent out all of their money...because they forgot, not everyone's a billionaire..."

Markets are democratic to the extent that when people ignore reality, they pay the full price...

The dominant delusion since Trump got elected is that the eight year business cycle which started under Obama has now been magically extended for another four to eight years under Trump. Leave aside that the current bull market is already the second longest in U.S. history, exceeded only by the 1987-Y2K rally.

Because dammit, all reality aside, this generation is owed another eight years...

Some perspective is in order. Despite three interest rate increases, the U.S. Fed Funds rate is still lower than it was at any point during the Bush Housing bubble. Which means that instead of 1.5 years of over-borrowing at 1%, we've now had eight years of over-borrowing at below 1%:

"Subprime auto-loan default rates match those seen just before the 2007-2009 recession."

Concerns were elevated in part by the latest reading for the National Automobile Dealers Association used-vehicle price index, down 8% year over year through February

Credit-rating firms and market participants have been scrambling to explain subprime default rates for recent vintages (loans made in 2015, 2016) that have now reached levels consistent with those originated just before the 2007-09 recession 

Subprime is now twice as big as it was in 2007:

To recap, bank stocks are collapsing because the bond market (yield curve) doesn't believe the Fed's bullshit. However, the Fed is too busy tanking the economy to listen:

Subprime and banks, two things that collapse great together...

This will end at any minute in any time zone...

You know, like last time...

"It's working so well, we're going to extend it"

Wednesday, March 29, 2017

South Park Savoir Faire

I believe in God, but I don't believe in anything else. I especially don't trust the hairless monkey. Somehow they know everything while knowing nothing at the exact same time. Incredible. 

Bank stock risk exposure topped, dropped and now hit a new weekly high...

Doesn't seem like a great idea:

Due to over-exposure to banks, the Dow went from multi-decade overbought to now down 9 days in the past ten...

In other words, this will be the fastest and hardest drop. 


Waiting For The Mega Crash

When all of the liars learn the hard way that exploitation is not a "business"...

Just waiting for the last three Nasdaq Mega Caps to rollover:

The QQQ / Dow crash barometer

Nasdaq 100 with % of Nasdaq above 50 dma (dashed black line):


Mega cap tech new highs today:




Nasdaq Composite with VIX

Money (Out) Flow


U.S. Oil ETF
Speculators are abandoning oil. Maybe they don't want OPEC to extend the glut-enhancing agreement another six months...

New record high in inventories this week...
"At 534.0 million barrels, U.S. crude oil inventories are at the upper limit of the average range for this time of year"

Well, as long as no one is lying, this will all be fine...

The Lie Of The Hurricane

EconoDunces have a stellar unbroken streak of never seeing the end of the cycle ahead of time. Why start now?

Risk markets took their first leg down at disparate intervals. Now they are sinkronizing to fall as all one market...

Today's Ponzi-based Free Trade alchemy which I call Hegemonics, is human history's largest estate sale. After 2008, the only way the consumption oriented lifestyle could be "saved" was by leveraging it 10x. As of right now EconoDunces are mistaking gamblers throwing their money away at the casino for a "recovery". They are weighing "soft" sentiment data over hard data. In other words, there's so much horse shit in here, there has to be a pony somewhere...

“Confidence is good"

“Despite the strong gain in confidence among small businesses there has been a slowing in loans over the past several months. The story of post-election small business optimism leading to greater investment is not (yet) playing out in the data.”

Hard Data:

Slowdown in GDP
Widening of the budget deficit 
Renewed collapse in Oil, Gasoline, Commodities, Precious Metals
Curve flattening
Collapse in retail stocks
Collapse in Transport stocks
Declining loan growth

Soft Data:

Stock prices, Consumer sentiment

The bond market isn't buying it:
Here we see that despite three rate hikes in the past 14 months, long-term rates are where they were over a year ago...

30 year yield (black). One year yield (red):

Amazon new all time high today

Now that Sears is officially "a going concern", here is Amazon with Walmart

Tuesday, March 28, 2017

"Looking Good, Billy Ray"

Contrary to popular belief, B.S. is not a Black Swan event...

The cascading waterfall of non-stop bullshit:

My time flies when they're blowing smoke up your ass non-stop...

"Paging Harry Houdini"

The two largest sectors of the market, Financials and Tech aka. locus of Mega Crash:

Large cap Tech with banks

One more leg down and no one will be laughing at bullshit anymore...

The Big Short 2.0: Betting Against Trump

Circus Clownius' latest Imperial Decree offers the last chance to get out of the Trump Trade before it collapses on top of everyone who believes in him:

After Friday's debacle, the blood is in the water. It's clear from today's short-covering rally that this era's late cycle Big Short is to bet against all things Trump...

Fresh off his shellacking last week at the hands of his own party, Trump is at it again today, this time at EPA headquarters rolling back Obama's Climate Change policies.

Trump signed the order in a ceremony at the headquarters of the Environmental Protection Agency (EPA). He was flanked by coal miners — whom EPA Administrator Scott Pruitt joked “might never have been to the EPA before” — as well as cabinet officials and Vice President Mike Pence, who celebrated the executive order as a repudiation of the Obama administration's climate agenda.

"I cannot tell you how many jobs the executive order is going to create but I can tell you that it provides confidence in this administration’s commitment to the coal industry," Kentucky Coal Association president Tyler White told Reuters.

I'll go with not too many, for everything, Alex...

Westmoreland coal
Today's gain: .75%

Frackers up ~2% on the latest Imperial Announcement from Circus Clownius...

Natural Gas, ready for another leg down...

"And all that he touched turned to a pile of shit"

e.g. Financials:

Dollar short-covering...

Kiss goodbye:

Construction/Infra stocks:

Today's rally visible by microscope...

U.S. Oil ETF

Yesterday I said that gamblers were hiding in the Nasdaq. Well, as long as Apple doesn't roll over, this will all be fine...

The next leg down for banks will be painful. We know that much...