Thursday, July 30, 2015

The Fed Is Ready For Blast-Off

The current quarter GDP "growth" rate is 2.3% while the current Federal deficit is -3.1%, so net of borrowings, real GDP is -.8%. Meaning that after a full six years of this "recovery" charade, the grandchildren are still footing the bill for this fucking illusion. All of which means that according to Idiocratic logic, the Fed is finally ready to put a match to this shit show...


1 year Treasury yields (forward interest rate expectations)


U.S. Deflation Expectations:



Emerging market stocks (black) with energy stocks (red)


Weekly money flow, U.S. stocks
(Compares weekly open prices versus weekly close prices)


Spirits of the Animal: Monkey hammered
IPOs peaked in April


NYSE Highs - Lows


U.S. internet stocks with U.S. short-term interest rates






Arrogance, ignorance, and a strong dollar. Lethal.



Once In a Blue Moon: From Manic to Panic

Elliot Third Waves at multiple degrees of trend, are extremely rare and devastating. They speak to a Social Mood that has gotten way ahead of itself.

They occur only once in a blue moon.

Which happens to be tomorrow.

I don't make this shit up.

Dow:



The S&Ps waves can best be seen via the internals (% of stocks above 200 day moving average) which are trending lower:



"Someone" was impatient and didn't want to wait to see how this shit show ends...
Up volume / Total volume:
Volume is increasing on down days and decreasing on up days (aka. short-covering), as the market gets weaker and weaker...




Shit wants to break



Wednesday, July 29, 2015

"Beam me up Scotty, there's no Intelligent life on this planet"

What we are witnessing in every direction is moral and intellectual bankruptcy on an historically unfathomable scale. 7.3 billion people have entrusted their lives to total fucking baboons.

Proven morons who are attempting to solve a problem they created, by applying yet more of the same asinine policies that created the problem in the first place. Intellectual dunces who should know full well that monetary and fiscal policy can't "fix" a secular trade deficit. Like sawing off your leg and covering it with a band-aid. The entire history of human experience passed down to arrogant mental midgets.

The Soylent Idiocracy is swan diving into pavement, stoned on junk food and junk culture. Unaware that their trusted psychopaths are out of tricks.

Why is this taking so long?

It's not. It's ending in every fucking direction, attended by rampant denialism. The old age home doesn't want to see it coming.

And they won't. They'll be a stain on the fucking pavement.



When The Music's Over

The third and last round of musical chairs in 15 years is now ending. When the music stops, the remaining good jobs will be gone. Hedge accordingly...

The Fed gazed into their magic 8 ball today and couldn't locate the economy. They'll try again next month, as they've been doing for the past six years - human history's largest circle jerk. In the meantime, they will provide free financing for stock buybacks and jobs automation projects. 


As usual, the stock market was euphoric at news of the still-missing economy, Dow up 120. Skynet used the occasion to force all shorts to cover in the most beaten down real-economic sectors: energy, transports, resources etc. While the casino stocks (Biotech, momentum etc.) lagged. 


Thanks to the Fed's short-covering rally, all sectors are now CYNK'd to the downside.


Casino and 'Conomy now pointing down:


EM Credit and EM Currencies


Oil and oil stocks


Commodities and Global GDP



Global Stock markets:



Shanghai and U.S. Dow:



Small Cap stocks with NYSE Composite Internals:



Dow back tests the 200 day...
Prechter is ~CYNK'd with this Dow count (STU: July 29, 2015):
"...it may be a series of first and second waves lower that will morph into an larger impulse wave lower"...
(but overall still clusterfucked)...



Fortunately Skynet gave us some clues as to what comes next, because those two bottom gaps are below the 200 DMA, which is where this shit show gets interesting...



Tuesday, July 28, 2015

Globalization: Das Kapitalism Self-Destructing

Due to Walmart addiction and unsustainable ponzi profits, the dunces atop this clusterfuck have yet to acknowledge the root cause of the problem. Karl Marx argued that capitalism is not inherently stable - and Globalization proved him right. It didn't have to be this way, but it is. The Kapitalists killed the goose that laid the golden egg - the Middle Class. 

I reach this conclusion not via Marx himself but via economist Joseph Schumpeter and his book "Capitalism, Socialism and Democracy" which begins with an excoriating yet sadly unconvincing review of Marxism. By Schumpeter's own interpretation of Marxism (and refuted by himself, Schumpeter), what we are witnessing today is exactly what Marx had predicted:

"Is it not the most natural thing in the world to conclude that crises or depressions are due to the fact that the exploited masses cannot buy what that ever-expanding apparatus of production turns out or stands ready to turn out, and that for this and also other reasons which we need not repeat the rate of profits drops to bankruptcy level?"

[Schumpeter, Joseph. Capitalism, Socialism, and Democracy] 

Indeed. (Did I mention that he was unconvincing?)


According to Marx, the concentration of wealth (capital) commodifies labour, deflates wages, generates a colossal output gap, all of which leads to economic depression. Capitalists first feed on the labour pool but then feed on each other, causing profits to collapse, leading to corporate bankruptcy.

All of which leads to political revolution.

The first part is done, the second part with respect to profit collapse is solely a matter of Ponzi debt collapse. And the third part regarding revolution is TBD. 


Unfortunately, 35 years of FULL RETARD trade deficits have created the exact conditions that make collapse wholly unavoidable. Econ 101 (and 3rd grade math) asserts that no country can run secular trade deficits without incurring inexorable debt.

The world Marx is describing is Globalization - 

The output gap, commodification of labour, mass real unemployment, imported poverty, and now secular non-stop asinine abuse of "Keynesian" Monetary and Fiscal policy as a means to paper over the damage wrought by all of the above. 

All of which has led to 0% interest rates and the abject failure of Monetary policy as predicted by the liquidity trap. Culminating in today's CasinoNomics by which Central Banks lure fucktards into the stock market to enjoy their moment of pre-bankruptcy wealth, while billionaire government stooges shower foodstamps on the monetized masses. 

None of which is an affirmation of Marxist economic policy in the positive. However, it serves to highlight the extent to which today's Ponzi Schemers are in denial as to the magnitude of the monster they've created much less face the root cause of the problem. They are ALL still fixated on over-using Monetary and Fiscal policy which are no longer working in any direction - abject morons wondering why 35 years of non-stop antibiotics, have inexplicably stopped working. 


So until these Lost Boys come to terms with the monster they've created, the vector will be down.


Unlike Marx, I don't believe that it had to be this way. But it surely is. 

In historical terms, all economic systems are measured in terms of how well they protected children from abject poverty and otherwise prevented societal meltdown. 


In that regard, this current ponzi scheme has been a colossal fucking failure, the full extent of which has yet to be realized.  






Free-Basing Bullshit. Straight Into The Abyss

"If we could only fix China, everything would be great"

S&P 500
w/52 week range of average stock



Globalization CYNK'd Visualized
Shanghai, Comp, European Composite (Stoxx), U.S. Russell, Canadian Dow, Hang Seng, Nikkei


CasinoConomy




RISK OFF in the CASINO
High Beta Momentum is getting monkey hammered



Junk bonds: Getting Fracked by the energy sector



Shanghai Composite with the Dow



Value Line Geometric (U.S.)



The Dow




Sunday, July 26, 2015

2008 Is Resuming Right Where It Left Off

i.e. In 2008:
The biggest divergence in history...
The S&P reached a new all time high while the % of stocks above the 200 day moving average was trending steadily lower
(Meaning that Financials, Tech, and Healthcare are all massively overbought/overowned)


July to July View:




What do Chinese internet stocks and the Japanese Yen have in common?

Terminal Idiocracy: Swan Diving Into Pavement

Arrogance plus Greed and Stupidity. Are Terminally Fatal.

Six years of non-stop bullshit at 0% visualized:




The week before last, the Fed's pet rock, said that retiring at age 25 is more popular than ever, and "it will continue"...
Labor participation rate by age group: 




Then this past week, the Fed inadvertently leaked that the official "Unemployment rate" - which is the biggest openly accepted lie in human history - is their key metric for interest rate policy. It only goes down when people give up looking for work, so when UnEmployment reaches zero, interest rates will be "normalized" at 5%, amid non-stop rioting. 

This week we also learned that "good news" weekly jobless claims reached the lowest level since 1973:
"The bullish jobs picture, together with a firming housing market brings the Federal Reserve a step closer to hike interest rates this year."

Barron's dared to question the lamestream happy time with a 3rd grade question:
"If the labor-force participation rate is at a generational low, and one has to be in the labor force to file for jobless benefits, could that statistic be distorted to the downside?"

Match meet dynamite:

Interest rates going higher, deflation going lower:
U.S. one year interest rate expectations versus U.S. forward deflation expectations:
Holy fuck, we're doomed...



Thirty Year Treasury Yields



Strong dollar is imploding Emerging Markets
EM Currency Fund




Prepare for Idiocratic "lift-off"




On The Turning Away

The "Fuck You Jack, I'm Ok" historical experiment is ending. It turns out that human beings were not meant to be disposable corporate widgets after all. The only thing that isn't ending, is the obligatory fantasy that this isn't ending...

July 23, 2015 Paul Craig Roberts:
The Eroding Character of the American People
"Little, if anything, remains of the “American character."

"American people have lost, in addition to their own sense of truth and falsity, any sense of mercy and justice for other peoples"

Little remains of the American character, having been fully monetized. Character is gone because corporations had no use for it. Character is not conducive to maximization of quarterly profit, as the first and last priority. Some companies say they have other goals, such as "don't be evil", but as soon as they miss a quarter, those go straight out the fucking window. In comes the CFO from Morgan Stanley, making $70 million/year to "right size" everyone.     

Americans may have been among the first to be systematically denatured by Corporations, but by no means the last. The same inhumanity virus that afflicts this country has spread globally, inflicting untold inhumanity on a daily basis, in the name of "economic growth", "progress", and "the end of poverty". All of which is merely code word for obscene levels of corporate profit. 

What a sick fucking joke. Globalization which was sold as an end to poverty, did the exact opposite - spreading it globally. All while self-indulgent morons were too busy binge shopping to realize they were being monetized, like their Walmart slaves at the bottom. De-humanized corporate batteries, having fulfilled their purpose.

After 2008, the people at the top of this clusterfuck failed to give a shit that the model completely stopped working. The BRIC superstars of globalization (Brazil, Russia, India, China) turned into Bricks literally overnight as the myth of indefinite growth blew away like pixie dust when the Ponzi scheme collapsed. So this post-2008 model is even more brutal, more extreme, less humane. It's unencumbered by any fake pretense of "progress". Shock doctrine on radical steroids...

"Fuck 'em. They're just slaves now, that's a real shame. As long as they keep making the cheap shit at Walmart, it's all good"

CNBC: July 9, 2015




And the Idiocracy still hasn't figured out the root cause of the problem, because they 100% sold out to it. Life without cheap junk, is unthinkable.

"Which revenueless Biotech IPOs should I buy while our Third World sweatshop is collapsing?"
Shanghai Composite (red) with Dow



Globalization is 100% CYNK'd to the downside



The people at the top of this clusterfuck are totally clueless about what's coming.

Too busy bounding gleefully into the same dumpster they created for everyone else. 




The Problem With Reality Skepticism

Is that there's never anyone around to tell the truth when it's most needed.




Those comfort-seekers who think that they're successfully hiding from reality behind their Faux News, arrogance, ideology, greed, delusion, Weekly Standard, wishful thinking, buffoonery and all of the above...

Are always going to receive a highly unexpected visit.

It's only ever a matter of time.

The longer it takes, the more lethal the message.




Every Time This Happens, Etraders Get Wiped Out

WSJ: July 17, 2015
Google's one-day $65 billion market cap gain is one for the ages

The first time a mega-cap got rocket launched to a one-day ludicrous momentary gain (Y2K), I got wiped out.

Fortunately I can't be conned by the same psychopaths over and over and over again...

Y2K: 
"But Google’s market cap gain is still eclipsed by Cisco Systems Inc. On Monday, April 17, 2000, the stock jumped 17% after tumbling 24% the week before. "


2008:
After that, the next largest gain was:
"the $55.7 billion that Exxon Mobil Corp. gained on Oct. 13, 2008, when the stock bounced 17% after skidding a combined 19% the prior two sessions."



2015:
Google: $65 billion




In other words, it's extremely rare for a single stock to gain market cap greater than 411 out of 500 S&P companies, in a single day - sending the Nasdaq to a 3-std deviation .1% "Black Swan" fake overthrow...




Shanghai Surprise: Another Bubble Bursts

This week the casino got monkey hammered. While the last holdouts went parabolic...

FANG:
Wall Street's latest acronym is Facebook, Amazon, Netflix and Google. The whole world is falling apart, but the good news is that Amazon finally made a microscopic profit by selling cheap shit over the internet. Their trailing profit margin is -.2%. I'm not making this shit up. And you know you're running out of fumes when Netflix is considered a core holding...

Before we get to FANG, the real news was Apple getting shellacked on a weak earnings report...

I will go out on a limb and say that this is a top 6 months in the making...


Presenting FANG: The four horsemen of the 2015 Tech-Apocalypse...

Friday, July 24, 2015

Dumpster Diving With The Idiocracy. For Fun and Profit.

Only one currency always gains in value

You can't buy it. You can't sell it.

You can't borrow it. You can't save it. 


At the end it levels all castles in the sky.


All men are not created equal, they just die equally humbled.


Amid tears in rain.

What the corporate Idiocracy values, has no value. Half a trillion in annual advertising, not for nothing. 

They throw away everything, mostly themselves.


They can't see the bubble, because they are the fucking bubble. First and foremost what is now disintegrating. Used up for 'special' dividends. 



"One asinine idea led to the next more ludicrous one, until they ran out of time. Swan diving straight into the dumpster of history"



Third Wave Liquidation Phase

EWI Short-term Update: July 22, 2015:
"[Bottom Line] Stocks remain in the final throes of a fifth wave rally. When the structure of the advance is complete, a bear market will begin."

I will go out on a limb and say that a "bear market" has already begun...
S&P with average stock


My wave count doesn't allow for a new high. The top was in May with two subsequent retracements. The Dow first reached this level over 8 months ago, and is now negative on the year. When acceleration is at hand, it's best not to get too fancy with the voodoo...

Dow:


Even the Biotech Casino took a hit this week
Everything else got mauled



NYSE Highs-Lows:



New lows


As expected, this next leg down is led by Oil stocks and Emerging Markets, which are in full liquidation mode


Emerging Market Credit