New Normal

Sell In March And Go Away? There's Something About April During Election Years

"We transition from the best 6 month stretch for the S&P since 1950 into the worst 6 month stretch which commences in May. Moreover, while April has been the best month for the Dow over the past 65 years (+2.0%) during Presidential Election Year's April falls from a 1 seed to an 11 seed with an average loss of .9% according to the Stock Trader's Almanac"

Goldman's Take On Yellen's Dovish Deluge: "A Less Confident Take On Rate Normalization"

In recent weeks, Goldman Sachs has gained prominence by being the only bank left standing in its confidence that the Fed's forecast of 2 rate hikes in 2016 is wrong, and instead is sticking with its hawkish prediction of at least 3 rate hikes for 2016. This also explains why Goldman has been pounding the table on long US dollar bets, which incidentally have led to major losses in the past three major central bank announcements, two from Mario Draghi and one from Yellen. why we were curious how Goldman would reconcile the latest "dovish" shocker from Yellen which has unleashed a dramatic buying spree of all risk assets (as of this moments the S&P500 is trading at a 23x LTM GAAP P/E), with Goldman's hawkish bias.

America Hits Rock Bottom: Cities Are Paying Criminals $1000 Per Month "Not To Kill"

It is widely known that as part of the economic debate, the most controversial topic is whether to engage in helicopter money, i.e., hand out freshly printed money directly to the people. What is less known is that when it comes to the most despicable underbelly of US society, cash to the tune of $1000 per month is already being "helicoptered" to some of the most brazen criminals living in the US today with one simple condition: "don't kill people."

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'.