This sounds like soured graped being flung at the reader class. I swear on a stack of holy Korans, I am in the least bit upset that markets closed higher today.
Having said that, 55% of stocks ended LOWER today. Odds are, if you’re reading this now, you lost money today and have been scratching your balls since noon, wondering where all the gains are being enjoyed.
Also, oil ended down 4%. The market hasn’t really digested the reversal in crude just yet. At $46 per barrel, the entire country of Venezuela is starving. Then again, why should we care?
Moving on.
In summary, the only sector that was noteworthy today were the utilities.
TLT was higher by 0.5% to new highs. The hounds are allocating, heavily, into dividend payers, ahead of a long summer of debauchery.
All three indices are higher, led by the Dow, +92.
The top performers are as follows.
Food Wholesale
Water Utilities
Healthcare
Meat
Diversified Utilities
Internet Service Providers
Cleaning Products
Oh. Well, that doesn’t sound all that interesting, does it? A Market being led by meat isn’t being led at all, if I might say so myself.
The Bubble Basket in Exodus is down 0.6% for the day, so where is the money going? Clearly, more than meat and utility pole makers are going higher today.
Let’s have a look.
As of right now, just 48 stocks out of 4,000+ are higher by 2% or more. So where the fuck are the gains?
Well, well, well, look what we have here. All roads lead back to Goldman. From palace gates to the backwater slums of confederate America, the boys from Goldman Ballsachs have their dirty fingers in everything.
In a research report concocted by KBW and JP Morgan, it says, clearly so, that after England votes to leave the EU–over the next two years of transition earnings would be gravely impacted in a litany of banking houses. Naturally, this is cause for great sounding alarm bells. We should all shame the British people into voting to remain in the catamite loving EU, in order to prevent the wanton starvation and deprivation of the Goldman employee roster.
Estimates for 2017 earnings per share for JPMorgan would drop by 6.7 percent to $5.96 in the event of a Brexit and by 7.9 percent to $16.76 for Goldman Sachs, KBW said.
“We’d expect the banks to experience both revenue and expense headwinds” during a two-year transition period, the analysts said in the note. The analysts wrote that longer term, the impact for the banks would “be a wash.”
One side note speaks to the whole mess and ordeal being ‘a wash’ longer term–one big ole grand misunderstanding. But remember, IN THE SHORT TERM, heinous drawdowns and economic hardship beckon if in fact the people of England vote to leave the EU.
A vote to leave is a vote to starve the partners at Goldman…of gratuitous amounts of hookers and cocaine while on their ‘business trips.’
The simpletons at Morgan Stanley are equating this era of economic Frankenstonian proportions, where $10 trillion in debt resides in negative yielding instruments, to the ho-hum soup kitchen, pre-war days of 1938. This, of course, is to lure the idled and the sloths to read the research report, just like many of you clicked in via Twitter to see whatever the fuck I was talking about.
The truth is, it’s a lot worse than 1938. Back then, we didn’t have assholes in Central Banks commanding rates in such a manner that it literally destroyed capital. We only had assholes in Germany, trying to take over the world (No EU).
Some things never change.
“We think that the current macroeconomic environment has a number of significant similarities with the 1930s, and the experiences then are particularly relevant for today,” they wrote. “The critical similarity between the 1930s and the 2008 cycle is that the financial shock and the relatively high levels of indebtedness changed the risk attitudes of the private sector and triggered them to repair their balance sheets.”
Like then, the end result could be a prolonged weak period and subdued inflation expectations, with a risk that those price expectations are un-anchored. The danger is that central banks move too quickly to raise interest rates or governments cut back on spending, triggering an even deeper slowdown.
“In 1936-37, the premature and sharp pace of tightening of policies led to a double-dip in the U.S. economy, resulting in a relapse into recession and deflation in 1938,” the analysts wrote. “Similarly, in the current cycle, as growth recovered, policy-makers proceeded to tighten fiscal policy, which has contributed to a slowdown in growth in recent quarters.”
“Activating fiscal policy, particularly at a time when the monetary policy stance is still accommodative, could lead to a virtuous cycle where the corporate sector takes up private investment, and sustains job creation and income growth,” they wrote.
The Fed has already taken their foot off the pedal. We’ve raised rates 1 time and the market threw a hissy fit. All other economies of importance have enacted QE schemes to fend off deflation, by creating more deflation. It truly is a sick world. However sick it may be, we’re not hiking rates into an earnings recession, last I checked. Ergo, this Morgan Stanley report is only useful as toilet paper inside of a filthy Wedbush bathroom.
Dreadfully, a British lawmaker was slain today, while campaigning for England to remain in the EU. As a result, both the leave and remain camps have decided, at least temporarily, to suspend their campaigns. However tragic it may be, one person’s life isn’t going to support the sands that are quickly shifting beneath the people who want to keep Britain in the EU. For some odd reason, markets have taken this slight slither of hope and run with it.
The Dow has reversed triple digit losses and is now higher. Both gold and bonds are retracing their steps and look poor. And oil… well oil is still fucked–off by 3%.
The yen is still 1.6% stronger v the dollar and nothing has been resolved, but a brief reprieve from a harmonious unwind of nonsense that will, once and for all, sever the markets ties with the utterly incompetent Federal Reserve.
We’ve got all sorts of zebra, jackals and parrots on the ark. It was built to save mankind, and vicious animals, from the coming storm. By design, it’s impenetrable and impervious to deleterious weather conditions. I’ve been planning for ‘an event’ since December of 2015. This might come as a surprise to many of you, especially those who know that I’ve always had a bullish bias, but I think stocks can drop 30% from present levels, if central banks lose control.
That’s a big if, isn’t it?
Back to the ark.
This is how it looks.
And this is the storm. Right now, it’s more like a morning drizzle without an umbrella.
All eyes should be on the yen-dollar cross and crude. Should crude continue to slide, I guarantee everyone long the market will be fucked, without discrimination.
Raise your hand if you want to buy a negative yielding 30 yr Swiss bond. That sounds like a great deal, to borrow money for 30 years and to get paid for the pleasure.
BREXIT is putting the fear of God into European sovereign bond traders, who are selling periphery bonds and buying German. If England leaves the EU, maybe Greece, Italy, Spain, Ireland and Portugal are next?
“The trajectory of European banks is really worrying,” said Lorne Baring, a fund manager who helps oversee $500 million at B Capital in Geneva. “If banks are a main indicator of the health of a region, it gives you another reason to think ‘what the hell is going on in Europe?”’
As such, this line of thinking is self perpetuating a fear that is spilling into equity markets. Failure to trade as a convoy is equal to not being one. Not being one, means the euro experiment is failing and that Germany is going to invade France again.
What does it all mean? Pretend that I’m an idiot reader, unable to connect the dots. Please inform me why European banks, Unicredit, Credit Suisse, UBS and Deutsche Bank, hitting fresh all time lows is something that I should deem important, especially in the context of us being in a roaring bull market and all.
They’re all down in the order of 3%+ in Europe today.
