America: Gestapo Styled Voting

Argue the message, not the messenger.

MOAR

There are so many ways to rip Gartman to shreds with this clip. I almost feel like a werewolf biting away at his shirt sleeves. He’s talking bull markets and silver-gold ratios–something that hasn’t been relevant since the Victorian Ages.

‘Gentlemen don’t trade oats or silver,’ says D. Gartman. You’ve got to be fucking kidding me, mate.

Moreover, Gartman declares he’s too old to trade silver and can only play this on the long side of gold. After all, we’re in a long term bull market in the metals and he’s long of them, in bullshit terms, until something deleterious falls upon his foot and shatters it in twelve places.

Note how Gartman holds his hands up in that funny manner. He may very well be a demon. By the way, I absolutely love the fake books in the background. Nothing says ‘I’m smart as shit’ as a background filled with fake books. Riveting stuff.

Reverse Cramer, Rich Ross from some meaningless firm, is out with a significant note of caution this evening, particularly those playing in the tar pits of oil. He points to a trend in the market that has failed before, namely running up stocks in brainless fashion up until earnings–only to fail miserably after said earnings disappointed. There is a notable risk inherent in the chasing up of oil stocks.

He did cite the XLE as a prime example of doom portending.

I happen to agree with this Rich ‘Boss’ Ross fellow.

In this clip, Cramer dismisses the ‘protest’ candidacy of B. Sanders, likening it to a joke compared to the business friendly Hillary campaign. Moreover, he doesn’t think Sanders stands a chance, especially since the superdelegates will hand Hillary the win, in what Cramer calls a ‘coronation’, as opposed to the advertised ‘nomination.’

Taking a contrarian viewpoint to what has been hitherto a castigation of earnings expectations for the first quarter of 2016, James Cramer cites a marked improvement in the Chinese indices, as well as the dry fucking bulk index, as evidence that doom might not be the prescribed analysis needed heading into earnings.

He sees upside, when everyone else is expecting black flags and carcasses strewn out across the investment landscape.

I’ve gotten over these elections. I’ve come to grips with the indelible facts, for the millionth time during my life, that my opinion means nothing, as well as my vote. All that I can do to allay the brutishness of it all is to express scorn and deride the mockery that we call democracy. These trolls keep citing so called laws that were put in place, which negate common sense and decency. Last I checked, the democratic process should count the votes of all men, as a right, not just a select few ham and eggers who are bought and sold by the establishment elite.

These elections are a great success for one reason only: it is laying bare the corruptness and illegitimacy of a system that praises itself as being fair and equitable. I believe the Sanders-Trump candidacies, if anything, have awoken the masses to these grave injustices.

This is the very worst case scenario for feverish bulls, but the best for me. At the open of trade, I led a faction of top hatted gentlemen into another tranche of short XLE, close to $63.

For the second time in as many days, the market was robbed and beaten for an otherwise genteel 150 point advance.

Oil stocks reversed under the weight of their own hubris.

The ark, gentlemen. It floats.

Any questions?

Median returns for both sectors are higher by 7%–based on a mere 1.1% return in the physical metal. Wholly and without question, these moves are of the nonsensical varietal.

Markets are flagging here, giving up a 150 point gain, reminiscent to what occurred on Friday. This is, without question, a very ominous development for the morale of this market. The buyers of this late stage rally are of the cheapest cloth. Their loyalties lie only with their account balances.

Offer them a hard tape, and subsequent losses, and watch them flee the field of battle, en masse, paving the way for a Kool-Aid guy breaking through to the downside.

The rally in gold is more likely due to these mercenarial traders, floundering to find new opportunities, rather than a solid fundamental reason backed by strong asset reallocation.

A storm is coming.

Everything is skewed to the downside, according to David Kostin–War Chief of U.S. Equity Strategy, Goldman Sachs.

These are the three principle reasons for you to fear the coming ice’d-berg.

1. Energy and banks
“Our analysts have highlighted a laundry list of headwinds including energy counter-party risk, a slowdown in capital markets activity, and a bruising quarter for asset managers,” Kostin & Co. said. “We believe financials earnings per share [EPS}could fall by as much as 25 percent.”

2. Negative guidance
“Since 2006, roughly 20 percent of firms have provided ‘next-quarter’ guidance during earnings season and 73 percent of firms typically guided below consensus,” Goldman found. “Following the depths of the global financial crisis, guidance has grown increasingly negative, and has been worse-than-average since 2012.”

3.Corporate buybacks
Kostin believes the gravy train of equity buybacks is ending: “a meaningful reduction in what is currently the only source of net demand for U.S. shares.”

In summary, the outlook for over 30% of the market is bleak and very dark, and also very dire. With regard to the financials, they’re diving–headlong–into cement pools, with earnings expected to be reduced by 25%. Moreover, this isn’t going to be a one-off event and companies are expected to guide lower, in droves, for next quarter. Lastly, corporate buybacks have run its course. They’ve been maintained at a pace that is unsustainable. The succor the markets have enjoyed with this seemingly endless support of prices has all but come to an end.

BEHOLD the earnings season to come. David Kostin believes you will enjoy it, immensely, similar to a horror movie or something much, much worse–a lifetime of Presidential campaign speeches.

A new aristocracy is forming in the marketplace, as the new born investors in distressed commodities express themselves through higher prices.

These new men of industry are above all stations in society. Their milieux is one of extreme wealth and substance. Stocks like CHK and BBG are in their portfolios from the lows. They feel oil will double from here and their new Greenwich mansions will be completed by next fall, should everything go according to plan.

“Isn’t it wonderful?”, asked the wife of one of these illustrious investors.

I cannot begin to describe how wrong this rally in commodity related stocks is. I do not pretend to hold all of the answers to life and I’ve had my fair share of failures throughout the years. But this will not be one of them.

This perversion of reality, this melt up in commodity related stocks, will end. When it does, it will end very badly indeed.

In the meantime, the market is running higher again, save biotechs. I don’t expect the rug to be pulled just yet. I do expect said rug to be completely gone, however, come May.

Enjoy the rally while it lasts.

The ECB and the EU are gargantuan failures unraveling in real time. To think that the conservative Bundesbank gents are forced to cede power and control to some Italian lunatic, who thinks it’s ‘very interesting’ to send free money to people directly, as a method of enacting central bank policy, is fucking hilarious.

Germany is besides itself with rage, whilst eating oversized pretzels and swigging down excess quantities of swill, as Draghi makes a mockery of their Austrian school of economics.

A storm of protest erupted in thrifty Germany after Draghi last month described the idea of “helicopter money” – sending money directly to citizens – as a “very interesting” – if unexamined – concept.

Late last week, top ECB officials, including the ECB’s chief economist and its vice president, backpedalled, saying the idea was not on the table. But the damage had already been done.
“The ECB’s policy was already unpopular in Germany and the idea of helicopter money was the straw that broke the camel’s back,” said Joerg Kraemer, an economist with Commerzbank in Frankfurt. “People feel that ideas like this are dangerous.”

German analysts see the idea as an excessive ramping up of a loose money policy that is already fuelling rising property prices in their country, and also because it would undermine the euro by printing money and giving it away for free.

It marked a new low in the often fraught relations between the euro zone’s biggest country and the central bank’s Italian chief, who has recently bemoaned what he described as the “nein zu allem” (“no to everything”) approach – a swipe at Germany.

The ECB is scheduled to meet later this month. I would pay to be a fly on the wall to see the expressions on the German faces when Draghi reveals his Italian ‘bad bank’ fund scheme.