ALL IN CRAZY
"Trump, who has been the target of two assassination attempts since July, shared his appreciation for a second presidency during his 25-minute speech from West Palm Beach, Florida."
Democrats are the gang that can't shoot straight.
Divine intervention, or divine retribution. Time will tell what prize at the bottom of the Cracker Jack box was just "won" in the Trump Casino. Early results show that Republicans may have a lock on power across the House, Senate and Presidency. Which means MAGA has a mandate on batshit crazy.
Just before the election, Investing.com put out a poll indicating that 78% of their readers believed Trump would win. Which means there is very little "cash on the sidelines" right now if any. What exists was put to work last night in the Globex futures and the rest will hit the market this morning.
As I wrote on Twitter, this is the exact opposite market set-up that occurred in November 2016. Back then when Trump got elected, the futures collapsed but the market was oversold and it rallied for over a year later. This time, the market has been rallying for a year already. The Trump trade only really came into question in August and then only for a few days.
Instead of guessing when or where the futures-driven robo rally will end, I think the interesting action will be taking place in other markets.
Among other dislocations we can expect:
1) Dollar to sky-rocket
2) T-bond market collapse, interest rates sky-rocket
3) EM currency collapse
4) China implosion
5) Fed turns hawkish
On this last point, Fed policy, giddy investors also forget that the Fed was raising interest rates in Trump's first year as president. The Fed's efforts to cut rates in an across the board MAGA mandate will be stymied by MORE gargantuan tax cuts and larger deficits. Among other things, Trump is proposing to eliminate taxes on Social Security benefits which would be great for retirees now, but would likely bankrupt the program for the future. Bear in mind that the program is aready in deficit so every dollar that can't be paid by the program must come from the Federal deficit. Unlike what we are told continually, there is no Social Security "Trust Fund". That is a massive fiction to cover up the plundering of the program to fund tax cuts for the ultra-wealthy. Every dollar that was borrowed by the U.S. government is a worthless IOU backed by the U.S. deficit. I am of course referring to the personal tax cuts, corporate tax cuts, capital gains tax cuts, dividend tax cuts, and estate tax cuts. All of which overwhelmingly benefited the wealthy. Social Security is now in the Cayman Islands and therefore it's an "entitlement" that the working class must pay into for forty years.
Here via the TLT Treasury bond fund we get the first glimpses of Trump-o-nomics as bonds crater and will likely crater further after tomorrow's FOMC meeting.
For now, Regional banks are leading the market and yet still below the 2021 high. Prime beneficiaries of further decriminalization of banking - something that I will predict will end catastrophically for the "system".
The open question is around the continuing rally in AI/Tech stocks as there is now a massive rotation out of growth stocks into small caps and reflation trades.
But for now, the All Time High crash counter has been reset to 0 days from all time high.
In summary, gamblers are convinced these are the LOWs of the coming year when they are more than likely the HIGHs of the coming year.
Divine intervention or divine retribution. Position according to your "beliefs".
