Macro - "A Permanently High Plateau"
已更新
Idea for Oil/Macro:
- The bottom line is that the inflation narrative is driven by one commodity - Oil.
- Price is at a 40 year resistance.
- The only thing actually holding up the price of oil is OPEC+ agreeing to cut production (Artificial inflation).
- QE is actually deflationary, all it does is put a floor on markets and suppresses volatility and creates speculative bubbles, the money doesn't directly leave the banking system. All bubbles pop.
- Right now there is price inflation due to supply chain disruptions and commodity prices - but speculative bubbles in commodity prices are already collapsing. They will all follow.
- Global productivity is on a decline, see GDP Growth Rate, World Manufacturing Output.
- The artificial growth you see now is debt driven. See Debt as % of GDP. Appearances over results.
- Unemployment numbers can be suppressed with cheap and unskilled jobs, but take a look at declining quality of jobs.
- Equity prices follow forward inflation expectations. They are falling: fred.stlouisfed.org/series/T5YIFR/
Why would anyone buy a risk asset when inflation is expected to decline? They would just be in appreciating cash.
- The reversal is caused by the global credit impulse. Credit is an actual inflationary force.
- What is happening now in Equities is that banks and companies are simply using margin debt for leveraged stock buybacks, boosting EPS.
- Zombie companies are not allowed to fail, and money losers are flooding the market with shares - raising more money than moneymakers. This is Euphoria.
- However, easy credit is over. Now credit contractions are spilling over to US - see Wells Fargo cutting personal lines of credit.
- Debt will be called, particularly from overseas - see Evergrande.
- PBOC has been draining liquidity in China via RRP, US preparing to do the same via RRP. It is the first step of Tapering and the effects will be felt in the coming weeks.
If you think about it, it does not make sense for the economy to be booming during a global pandemic crisis, despite what the media is blaring. It is debt fueled, and can it handle the next crisis? The pandemic is not even over yet, by a long shot.
If you have an understanding of the internals of markets, correlations and the liquidity flows, you can see macro trends as they develop and predict them.
When oil reverses, the reflation trade will be over.
Same with gold - this can be a distribution pattern (the inflation fears were priced in and distributed already):
Bitcoin - Speculative risk asset already collapsed:
Lumber - Great canary and speculative risk asset collapsed:
It's all the same story for bond yields and currencies:
DXY - Dollar seems to have found a base:
Bond Yields:
AUDJPY:
EURUSD:
CHFAUD - Indicating some fear:
Significant warnings:
- SP500 vs Margin Debt
- SP500 vs Real Earnings Yield
- SP500 vs Real Dividend Yield
- US Quarterly Equity Offerings
- Collapsing Market Breadth
- Transports turning down
- Rydex Bull/Bear ratio
- Market internals not confirming low volume ATHs (bearish divergences)
PC Ratio reaching lows not seen for 10 years:
SKEW reaching ATH while VIX is crushed - Smart money + insiders positioning in accumulation phase:
We might get a few more high inflation prints due to lagging effects, but commodities will crater once retail is completely positioned for inflation.
Speculate that market conditions have changed such that crashes like the COVID crash will be regular occurrence, due to the options market being the real market.
Speculate the reversal Jul. 12-Jul. 14, downtrend through Aug into a capitulation on Sept Quad Witching.
"Stock prices have reached what looks like a permanently high plateau" - Irving Fisher, 1929, days before the market began crashing to total -89.2%.
GLHF
- DPT
- The bottom line is that the inflation narrative is driven by one commodity - Oil.
- Price is at a 40 year resistance.
- The only thing actually holding up the price of oil is OPEC+ agreeing to cut production (Artificial inflation).
- QE is actually deflationary, all it does is put a floor on markets and suppresses volatility and creates speculative bubbles, the money doesn't directly leave the banking system. All bubbles pop.
- Right now there is price inflation due to supply chain disruptions and commodity prices - but speculative bubbles in commodity prices are already collapsing. They will all follow.
- Global productivity is on a decline, see GDP Growth Rate, World Manufacturing Output.
- The artificial growth you see now is debt driven. See Debt as % of GDP. Appearances over results.
- Unemployment numbers can be suppressed with cheap and unskilled jobs, but take a look at declining quality of jobs.
- Equity prices follow forward inflation expectations. They are falling: fred.stlouisfed.org/series/T5YIFR/
Why would anyone buy a risk asset when inflation is expected to decline? They would just be in appreciating cash.
- The reversal is caused by the global credit impulse. Credit is an actual inflationary force.
- What is happening now in Equities is that banks and companies are simply using margin debt for leveraged stock buybacks, boosting EPS.
- Zombie companies are not allowed to fail, and money losers are flooding the market with shares - raising more money than moneymakers. This is Euphoria.
- However, easy credit is over. Now credit contractions are spilling over to US - see Wells Fargo cutting personal lines of credit.
- Debt will be called, particularly from overseas - see Evergrande.
- PBOC has been draining liquidity in China via RRP, US preparing to do the same via RRP. It is the first step of Tapering and the effects will be felt in the coming weeks.
If you think about it, it does not make sense for the economy to be booming during a global pandemic crisis, despite what the media is blaring. It is debt fueled, and can it handle the next crisis? The pandemic is not even over yet, by a long shot.
If you have an understanding of the internals of markets, correlations and the liquidity flows, you can see macro trends as they develop and predict them.
When oil reverses, the reflation trade will be over.
Same with gold - this can be a distribution pattern (the inflation fears were priced in and distributed already):
Bitcoin - Speculative risk asset already collapsed:
Lumber - Great canary and speculative risk asset collapsed:
It's all the same story for bond yields and currencies:
DXY - Dollar seems to have found a base:
Bond Yields:
AUDJPY:
EURUSD:
CHFAUD - Indicating some fear:
Significant warnings:
- SP500 vs Margin Debt
- SP500 vs Real Earnings Yield
- SP500 vs Real Dividend Yield
- US Quarterly Equity Offerings
- Collapsing Market Breadth
- Transports turning down
- Rydex Bull/Bear ratio
- Market internals not confirming low volume ATHs (bearish divergences)
PC Ratio reaching lows not seen for 10 years:
SKEW reaching ATH while VIX is crushed - Smart money + insiders positioning in accumulation phase:
We might get a few more high inflation prints due to lagging effects, but commodities will crater once retail is completely positioned for inflation.
Speculate that market conditions have changed such that crashes like the COVID crash will be regular occurrence, due to the options market being the real market.
Speculate the reversal Jul. 12-Jul. 14, downtrend through Aug into a capitulation on Sept Quad Witching.
"Stock prices have reached what looks like a permanently high plateau" - Irving Fisher, 1929, days before the market began crashing to total -89.2%.
GLHF
- DPT
交易开始
Interest rates hike doesn't really matter for US. They shouldn't and won't raise rates. In fact they will be negative.It is the tapering of asset purchases that matter and will be the catalyst.
交易开始
Macro overview - Inflation is indeed transitory:
交易开始
Credit (Junk + Leverage) rolling over: 交易开始
Alternatively to the dollar - Euro is on the precipice - it leads risk assets:交易开始
Now they let the masses know about credit cycle: reuters.com/breakingviews/chancellor-us-credit-cycle-close-overheating-2021-07-30/交易开始
It does look like a Middle East conflict is imminent.The question is, is it a Yom Kippur War, US-Afghanistan War, or US-Iraq War?
Yom Kippur War (coincided with Energy crisis):
US-Afghanistan (coincided with tech bubble):
US-Iraq:
交易开始
As yields and currencies foretold months ago, IEA and OPEC+ now see oil flipping from a deficit to a surplus in 2022.We are at a macro turn, and I foresee crude with a bust in 2022, testing lows of the channel
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