New Normal

Don't Blame It All On Donald Trump

In this “election” season, many remain shocked that a leading candidate for the presidency is a demagogue with a visible authoritarian side and what looks like an autocratic bent. All such labels are pinned on Donald Trump, but the new American system that’s been emerging from its chrysalis in these years already has just those tendencies. So don’t blame it all on Donald Trump. He should be far less of a shock to this country than he continues to be. After all, a Trumpian world-in-formation has paved the way for him.

Something Just Snapped In The VIX ETF Complex

As TVIX, the double-levered long VIX ETF unleashed in Nov 2010, decays to record low prices, an unusual (and almost unprecedented) event has occurred. Just as we saw in Gold ETFs, and Oil ETFs, TVIX Shares Outstanding have exploded by a stunning 225% in the last 4 weeks with the largest inflows (bearish bets) on record in the last week. The entire VIX complex is perturbed as the huge bearish TVIX flows contrast with the complacency of the steepest term structure since Nov 2014 (post Bullard-Bounce) and net speculative positioning at its shortest VIX (most bullish) in 2016.

Healthcare Is About To Surpass Housing As The Biggest Source Of American "Growth"

What was most troubling in yesterday's GDP report is that the second highest spending category making up the GDP calculation, Healthcare at $1.9 trillion, has been soaring in recent years, more than offsetting the housing weakness, and as the chart below shows, the US economy is within 2-3 quarters of the moment when outlays on healthcare (and Obamacare) will surpass spending on Housing.

The Slow, Inevitable Collapse Of The Two-Party System

Regardless of how Trump and Sanders fare in their respective conventions, they could still operate a serious race for the White House. Get used to Sanders, Clinton, Trump & Cruz. You may see all 4 of them, come November...

"There Is No Word To Describe This" - The Energy Forward P/E Multipe Is Now Off The Charts

As of this moment, the forward P/E of the Energy sector is no longer "an absolutely ridiculous and mindblowing 23x".... it is, in fact, more than double that at 58.7x, which also happens to be more than four times higher than the 15 year average. There is no longer a word to describe the lunacy where the forward P/E multiple was literally "off the chart" until the Y-axis was doubled.

Central Banks - The New Nukes?

You know something is strange when "the riskiest" country in the world is the nation whose central bank everyone is relying on to 'save the world' and "the safest" stock market in the world is from a nation whose neighbor is actively test-firing nuclear missiles? It appears activist central banks - following Draghi's "kitchen sink" - have become the new normal's 'nukes'.

"Everything's Interconnected"

Everything happening today is in some ways interconnected: popularity of ‘non-establishment’ political candidates; ineffectiveness of central bank policy in lifting inflation; economic pessimism; weak capital spending (from handcuffed capitalism); and angst due to perceptions of inequality. Let us explain...

Global Central Banks Continue Longest Gold-Buying-Spree Since Vietnam War

While "greed was good" in the '80s, it appears "gold is good" in the new normal. As much as the barbarous relic is despised by all the mainstream money-peddlers in public (aside from those who have left the familia like Alan Greenspan), it seems to be loved in private. Central banks have been net buyers of gold for eight straight years, according to IMF estimates, the longest streak since the first troops were deployed in The Vietnam War.

Art Berman Sees Oil Heading To $16, Will Lead To "Banking Bloodbath"

As Nate Hagens noted, "people think that the economy runs on money but it runs on energy," and as Art Berman details in the following interview how the current oil price collapse represents devaluation from over-investment in unconventional oil - and most commodities - because of cheap capital, and is simply a classic bubble. "Continued oil prices of $30 per barrel or less are the only reasonable path to higher growth and a balanced oil market," Berman contends, adding that he expects $16.50/bbl - "I think we're gonna get there." Berman concludes ominously, we're not going 'back' to anything - "Normal is over, and there is no new normal yet."