THE BEST ANALYSIS ON US ECONOMY
Hugo Adan March 20-20
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AAAND NEOLIBERALISM IT’S GONE.
This has been the sharpest market selloff in history...
See Chart:
[We
only have the British withdrawal..WW3 option is a suicide for the US]
This was the worst week since Lehman (and worst 4
weeks since Nov 1929) for The Dow Jones
Industrial Average...(Dow was down 18%
during the Lehman week and 17.35% this week)
See Chart:
Despite The Fed gushing a stunning $307 billion into
the markets - almost double its previous biggest liquidity injection (in March 2009)...
See Chart:
[USD is
been abandoned in the global market..nobody want this expens toilet paper]
Maybe
it was the 'stock' and not the 'flow' after all...
See Chart:
S&P
500 vs
FED balance Sheet
Stocks still have a long way to go .. (compared to actual profits)..
See Chart:
And if you think stocks already fell too much, think
again... Total market cap to GDP is just now retesting the peak of the
housing bubble levels!
See Chart:
Total
Market Cap /GDP
As @TaviCosta notes, "This puts into
perspective... We truly were at absurd valuations."
Chinese markets are mixed since
the Wuhan flu began with tech-heavy super-leveraged ChiNext still green as the
the megacaps get pummeled...
In Europe, "Whatever it takes"
wasn't enough...
Nasdaq remains notably higher since President Trump's inauguration,
S&P is barely higher but The Dow, Transports, and Small Caps are all
underwater now (the latter two crushed)...
See Chart:
Trump’
Inauguration
And US
stocks are testing a serious trend-line...
See Chart:
[ Why
is dangerous? This art didn’t explain.. as previous ones ]
Well..YES,
though partially: S&P 500 broke the post-crisis uptrend dramatically...
With
the Median US Stock down over 50% from its highs...
See Chart:
Value
Line Geometric Composite Index : Median Stock Index
[In short: la Econ de Trump fue un desastre:-50%
, pero ligero comp con OB:-70% ]
BUT: The
US Stock markets have lost almost $30 trillion in the last few weeks...
See Chart:
US
Total Stock Market Cup
AND US
stock market volatility has not been this extreme since Black Monday in 1987
and Black Monday in 1929...
See Chart:
S7P 500
10-DAY Volume
[ Ya estamos peor que en la crisis del 29-35,
agrav por la crisis de salud jamás resuelta: el mito OB solo existe en la mente
de Biden, el war architect of Iraq & his crook child]
Credit markets are utterly collapsing with nothing The fed did this week helping... HY is the worst
since the financial crisis, topping 1000bps for the first time since May 2009...
See Chart:
US XY
Corporate Bond OAS
And HY
has a long way to go if it catches up with fundamentals...
See Chart:
Leverage
vs. HY Credit
And
investment grade credit is getting crushed at a record rate...
See Chart:
US
Investment Grade Corporate BOND-OAS
Para que invertir en Produc? Basta con
speculation in WS to recycle d toilet pap USD .. that is the way the US Economy
works today. And that is why we have QEs & bailouts
Treasury
bond vol has exploded - at its sharpest rate ever...
See Chart:
TYVIX
Lehman vs. Dollar Shortage
Alguien se come el toilet paper.. la
liquidez inyectada no alcanza. We need FDR-gold-C
Bonds
and stocks have completely decoupled, trading down together and breaking the
'normal' correlation regime...
See Chart:
Bonds
& Stocks Correlation
Very
volatile week in bond-land but thanks to today's buying pressure, most of the
curve ended lower in yield (dominate dby the short-end) as stocks collapsed...
See Chart:
On the day, bond yields cratered - 30Y fell a
stunning 37bps, the most since 2008; and 10Y fell 30bps, the most since 2009...
See Chart:
10Y
yields were marginally lower on the week (amid a massive 65bps intra-week
range) and back below 1.00%...
See Chart:
Amid
all this carnage, negative-yielding-debt worldwide has evaporates rapidly as
bonds have been dumped everywhere (sending yields higher)...
See Chart:
The B-dollar
is up a stunning 9 days in a row...as the global dollar shortage creates an
unstoppable bid every day after Europe opens...
See Chart:
Bloomberg Dollar Index
Para qué revaluarlo? se dicen los ‘inversores’ del WS si con este USD
se transfiere la crisis neoliberal a los países dependientes. Real revaluación
seria dotar al USD con base en oro, lo
que 1ro requiere la confiscación del oro existente como lo hizo FDR. Los del
PENTA y NATO creen que para revaluarlo hay que confiscar el oro RU-Chino con el
WW3, ese es un sueño enfermizo: schizoid y self destructive. La schizophrenia
es camino seguro al MAD y los virus que dejaría el
WW3 serían más agresivos que el hoy no pudimos resolver con nuestro incipiente
sistema de salud. Entonces, si queda vida, esta no tendría razón de ser, regresaríamos
a la antropofagia de los trogloditas.
Today
we have the biggest 9-day surge in the dollar (a shocking 8%-plus) ever - more
than when Soros broke the Bank of England...
See Chart
9 days
USD Change
Absolute
carnage in commodities this week as a strong dollar and ugly fundamentals
slammed copper and crude...
See Chart:
Precious Metals were pummeled
this week as USD soared with Platunum worst and gold best...
But oil
was the real headline on the week - utterly devastated and Putin's comments
today spoiled the party from yesterday's best day ever... This was WTI's worst
week since 1991...
See Chart:
Finally,
as a reminder, Santiago Capital explains why The Fed Swap Lines aren't
working... (and in fact are making things worse)...
Just a quick note to remind everyone that dollars flowing via swap
lines are not a gift.
They are loans.
Loans are future demand for dollars.
Demand.
Demand for dollars is off the charts.
So while swap lines provide ST liquidity,
They are loans.
Loans are future demand for dollars.
Demand.
Demand for dollars is off the charts.
So while swap lines provide ST liquidity,
they increase overall demand.
THEY INCREASE DEMAND pic.twitter.com/NTzJOTNbvu
— Santiago Capital (@SantiagoAuFund) March
19, 2020
For a month, global stock
markets refused to take any notice of the virus that was taking hold in China... not our problem... we'll be fine... Fed will rescue us...
v-shaped recovery... and then...
See Chart
“Virus”
story count vs. Global Stocks
And the
prediction market says that the Wuhan flu has done what Schiff and the
Democrats couldn't with three years of bullshit narratives...
See Chart:
And
what happens next?
See Chart:
DOW now
and then
And
this is not good news, not reassuring - as all the chatter of helicopter money
has sent USA sovereign credit risk notably higher...
See Chart:
This is
certainly the best analysis on collapse of neoliberalism in US & the world
….
SOURCE: https://www.zerohedge.com/markets/stocks-suffer-worst-week-lehman-despite-biggest-fed-bailout-ever
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