Party Like It's 1929
The exact same data points that bulls are calling bullish, I call bearish. We've reached the point at which the bull case and the bear case are the same. Only the end result will be different:
Zerohedge:
FR: It will be a gigantic surprise, no 'almost' about it.
Content from the above Zerohedge paid-members only article can be found for free here:
Investing.com
"Strategists suggest it "would almost be a surprise for melt-up not to continue [in] coming weeks/months." This is because the newly elected Trump administration “sees rising stocks/crypto as tool to boost “animal spirits” & few believe Trump will allow bear market.”
First off, what these pundits seem to forget is that Trump has not taken office yet so this is all merely front-running policy. Another factor that has long been forgotten is that Trump's 2018 tax cut ended the year in a bear market with a low on December 26th, 2018. Six years ago in December, both Trump and Treasury Secretary Mnuchin implored Powell to stop raising interest rates, so Powell recanted and stocks bottomed at -20%.
All good, elder generations are RECORD ALL IN, convinced that the most "surprising" outcome would be a bear market. In this case, using the term "surprise" in the probablistic manner, versus the stain your underwear sense of the word.
But, what is truly egregious is this belief that ginning up Crypto markets is a good way to keep the stock market and by extension the economy both levitated. How is this strategy not even questioned by these moronic pundits? Everyone knows that Crypto is the epicenter of fraud and speculation in markets. Therefore the strategy that Trump ostensibly is seeking to exploit is the artificial manipulation of social mood via Ponzi markets. In other words, we are in totally uncharted territory in which an elected administration is attempting to fool the populace by tempting them into totally worthless Crypto Ponzi schemes. And yet, this strategy has garnered record inflows.
This past week, massively levered Crypto proxy stock Microstrategy which I've been talking about for weeks, went late stage parabolic and then exploded spectacularly, as we see in the chart below. At the lows of this past week, the stock had lost 1/3rd of its value from the all time high on gargantuan volume. Along with Adani imploding this past week, this implosion of Microstrategy is now the SECOND canary in the coalmine for what is coming to Ponzi markets.
High octane small caps are tracing out the same fractal they had in August which ended with shock and awe.
Nasdaq up volume highest since 2021:
All of which gets us to Bitcoin $100k.
I attended a wedding this past weekend between two wealthy families and their betrothed offspring. I heard estimates that the entire weekend cost north of $250,000. It was a modern day Roman bacchanal. And yet no one I spoke to questioned any part in it. It was rampant excess as usual.
At one point I had a conversation with a mid-twenties young buck who informed me that Bitcoin is fast approaching the end of the mining supply, at which point the supply of Bitcoins will be forever fixed and the price will go vertical and never look back. Perhaps. But we all know that despite having a fixed and smaller supply base this entire time, Bitcoin has nevertheless suffered staggering declines. The first major decline took place in 2011 when Bitcoin lost -93% of its value due to the Mt. Gox hacking theft. The second bear market took place in 2013 with the final collapse of Mt. Gox and Bitcoin losing -84% of its value. The third collapse took place in 2018 with another loss of -83%. During the most recent Crypto collapse which took place in 2022, Bitcoin lost -78% from the top.
2011: -93%
2013: -84%
2018: -83%
2022: -78%
What do all of these massive drawdowns have in common? They ALL took place during periods of economic expansion. In other words, the young people who believed they were "HODLING" their Bitcoins through "thick and thin" have never been through thin. We have an entire generation of young Ponzi schemers who have never known a recession in their LIFETIMES.
Now imagine these young Madoff acolytes taking another -90% drawdown in their shit coins while losing their jobs at the same time. Meanwhile they're buried in student loans and facing yet another housing bubble bigger than the last one.
We're going to lose a generation to this criminality-as-usual.
And what will history have to say of the parents of this young Roman bacchanal generation?
What parents?
