The rules of the game are changing. Those stuck within the old paradigm of mainstream finance face huge threats to their retirement....and quite possibly even their current standard of living.
In the span of 3 pages, a market strategist for a major Wall Street bank first compares rally chasers to cockroaches, and says that he himself is a cockroach, then just a few lines lower contends he is not a cockroach, and finally says he is only human.
QE3 ended 17 months ago and shockingly the S&P 500 is exactly where it was 17 months ago. How many bull markets go flat for 17 months? As John Hussman accurately points out, we are experiencing a topping formation in the third and biggest bubble of the last 16 years. It’s a long way down from here.
Thus Donald Trump and his rebel yell, the great white hope (in distinct contrast to the 2008 great black hope), is simply a reflection of the escalation of Empire’s attempt to control whatever it perceives as a threat.
A company offers interest on gold, and the gold community goes ballistic. Why so visceral a response?
UBS' recent bearish assessment of the junk bond space led to a firestorm of protests from Wall Street asset managers for whom just the selloff in itself had become a catalyst to buy. So, to clear up any confusion, here is Matthew Mish responding to the barrage of angry bulls why the $1 trillion in distressed credit - a third of the entire universe - is not just an energy story, and responding to the five most important and recurring questions
“It does not take a majority to prevail... but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men.”
"Some 92% of those unaccompanied migrants were male last year... there is definitely something strange going on. More than half of the world’s refugees are women. In World War II, when Sweden took refugees from Finland, they were children and 90% were below the age of 10. But now almost all of them are late teenagers – supposedly; we know many are older for a fact... If you have an open door policy and you are incentivizing Afghans to take advantage of the system, can you really blame them?"
"There is massive cognitive dissonance here... the crash has only just begun... The "let's make a deal" market is choosing monetary interventionism but when that door is slammed open, we will see that dreaded black swan monster."
No society wants to admit economic failure or economic sabotage, and this is why the con-game is able to continue in the face of so much concrete truth. Ultimately, the market trends and economic trends will flow into the negative. In the meantime, expect massive market rallies, rallies which will then disintegrate in a matter of days. And, whatever happens, never take what mainstream economists say very seriously. They have failed the public for long enough.
In China, the government reported 4Q GDP growth of 6.8%. However, during the same time period our China CAI (Current Activity Indicator) expanded at an average of just 4.5%, 230 bp slower than the official measure. Earlier this week our December CAI reading suggested China economic growth has decelerated to just 4.2%.
The fabric of the market is showing signs of fracturing, as 9 years of declining policy rates and 6 years of QEs failed to kick-off growth, while, as Fasanara Capital's Francesco Filia notes, further easing has a visibly decreasing marginal effectiveness. It is end-of-cycle-type policymaking and market responsiveness and while some markets and sentiment reflect the concerns of a tail-risk-like collapse, stocks remain dissonant in the medium-term to the ongoing rioting against monetary activism and market manipulation by global Central Banks.
Important pillars of the bull case evaporated throughout 2015. Global price pressures weakened, the global Credit backdrop deteriorated and the global economy decelerated. The huge bets on central bank policies left markets at high risk for abrupt reversals and trade unwinds – 2015 The Year of the Erratic Crowded Trade. Indeed, a global bear market commenced yet most remain bullish. Serious and objective analysts would view this ominously.
Rare is the ‘aware’ individual who engages in little more than window dressing in re-ordering our lives in preparation for the inevitable……that which is not self sustaining will not continue.