Month: February 2019

FWIW Chart

As I’m looking over some charts a repeating pattern has caught my eye which I think is worth mentioning.

I’m using the S&P 500™ futures chart as the example, but it’s pretty much the same thing across not only the other main indexes, but individual stocks as well. To wit:

(Source)

The above depicts the S&P futures via 15 minute candles/bars. As you can clearly see since the December plunge the “markets” have been on a one-way-ticket up supplied by a “phone call” and a presser for verbal capitulatory signaling.

However, that one-way up has been more of a stair climb as opposed to rocket ride when viewed via this prism.

“Does it mean anything?” That’s a good question, for it might and that meaning is this…

The “capitulation” trade may have finally reached the exhaustion phase.

As you can see, these stair steps (or consolidation areas) have been pretty consistent in both time length and just how much of a bounce up happened following each. This seems to be a clear pattern of pure machine buying.

In other words, it’s not (my conjecture) people – just machines gaming each other.

The reason why this observation is important is because, if you listened to the mainstream business/financial media you would be hard pressed to hear anything other than “people are once agin buying this market because, it’s now a bull market backstopped via the ‘Powell Put.'”

The issue with that conclusion is, if that were true, then why has there been more outflows (some $40 Billion) leaving the “markets” during this up move than has come in?

Also: Friday was the one of the lightest trading volume days in recent memory and the volume for this entire rally has been particulary low. That’s not a good indication for “sticking power.”

Let’s just say this type of “sticking power” can suddenly turn into getting stuck – and hard – in the blink of an eye.

“Does this mean it will?” I can hear you asking? And again, good question, but no one knows. It’s just something that requires careful watching for those looking for clues, because all the ingredients for a quick reversal are currently on-the-table and set.

As always, we shall see. But this is one of those moments, once again, that demands one to pay attention.

© 2019 Mark St.Cyr

F.T.W.S.I.J.D.G.I.G.T.

(For those who say I just don’t get it…get this)

As we sit here currently there has been one word responsible for $Trillions in gains within the capital markets globally: capitulation.

Every mainstream financial/business media outlet along with their cadres of next in-rotation-fund-mangers, buzzer bangers and more has stated that both the Fed through the word of its Chair Mr. Powell had indeed capitulated, where everything from future rate increases, as well as the balance sheet roll-offs were now “paused.”

I seem to have been the only one to emphatically state (far more than just once) publicly, that that has not been the case to the screams and howls of the so-called “smart crowd” across said venues.

It’s always the same line: people like myself don’t know what we’re talking about. And as proof? As always “Just look at these markets!” is the go-to rationalization.

The problem? Here you go, via Bloomberg™ this morning. to wit:

 “The Fed has made it clear that this is the primary tool of monetary policy and that hasn’t changed a whit. However, now that the balance sheet is getting more attention and the direction of short-term interest rates is less certain, the Fed is simply reminding people that the balance sheet is still available in circumstances where its primary tool might be insufficient. 

We are nowhere close to that situation today. The balance sheet tool becomes relevant only if the economy falters badly and the Fed needs more ammunition.” 

Bill Dudley, Former Fed. President, N.Y. via Bloomberg

Translation: Nothing, repeat, nothing has changed. The balance sheet has not been paused, may not be paused, and only under extreme circumstances or, like I said prior, it’ll take another crash type event, at the least, just to find out if they did or will, after the fact.

I would suggest you read the entire article, because there’s a lot more contained within that should cause attention to those looking for clues.

The obvious, via my eye, is that this appears to be following the well worn modus operandi of having former or, well connected others to the Fed as to get out in-front and set out trial balloons to see the reaction.

And make no mistake about it: The “market” has just been put on notice that all that “hopium” it’s been gorging on, has been just that – hope, not deeds.

In other words – the “market’s” been warned, now will it listen?

Just remember: with as drunk on 200-proof capitulation as this market is currently? The hangover has the potential to be one mother of a real b#tch.

© 2019 Mark St.Cyr

Footnote: These “FTWSIJDGIGT” articles came into being when many of the topics I had opined on over the years were being openly criticized for “having no clue”. Yet, over the years, these insights came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue-in-cheek as to not use the old “I told you so” analogy. I’m saying this purely for the benefit of those who may be new or, reading here for the first time (and there are a great many of you and thank you too all). I never wanted or, want to seem like I’m doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall – good or bad – and let readers decide the credibility of either side. Occasionally however, there are and have been times they do need to be pointed out, which is why these now have taken on a life of their own (i.e., something of significance per se that may have a direct impact on one’s business etc., etc.) where readers, colleagues, and others have requested their continuance.

Forward Guidance: The Spinning Of Illusive Illusions Within The Grander Illusion Of Modern Monetary Theory

Have you heard of the term Modern Monetary Theory (MMT)? If you haven’t, don’t feel bad. It’s not a harbinger to “that moment” when you suddenly realize you’ve crossed the meridian and drifted into what’s known as middle age. You know, like, when you thought it would be better to once again become single and hang out at the local hot-spots on Friday nights, only to realize not only do you feel old and out-of-place, but you actually are. It’s not that bad, but let me just add one word of caution: yet.

MMT is something all the “cool kids” (Think, Paul Krugman et al. types) are now openly discussing. The reasoning is simple: It takes the current con game of monetary policy and turns it up to 11. In other words, adding the word “modern” awards the same results as the term “disrupter” once did. Here’s an example…

Remember how Unicorns generated (and still do) valuation metrics? If you don’t, let me remind you: They make the sh#t up. Plain and simple. And for those that think that’s not accurate, I’ll just ask this: How are all those previous IPO darlings doing in meeting those prior projections? Too soon?

Well MMT makes the above look like child’s play, for when it comes to Unicorns and companies that require cash-burn as fuel that would make a Saturn V rocket envious, MMT encompasses the entirety of monetary policy of not just the U.S., but its aspirations are for the entirety of the globe.

However, let it not be lost on anyone: we are all currently dancing to this “new and crazy beat.” It just hasn’t hit “the charts” as they used to say.

The issue I would like to bring to light, today, is that in reality you are currently living with, and being effected by, the early stages of MMT. And this “music,” if you will, is being made possible by the Federal Reserve.

Currently we are all subjected to some ever-changing version of an illusionary Rube Goldberg inspired construct of monetary policy dictated by the Federal Reserve. Interest rate policy, employment factors and more are mandates explicitly resolved to the Fed’s purview. And when it comes to how it resolves these issues and the tools it will use for such? See any Rube Goldberg or R* example for clues.

Just remember: the “oil” for effectiveness of said tools is the one of the most slickest substances known to monetary theory: Forward Guidance aka jawboning.

Without it – the entire machinery can seize, at any time. And just like things in the real world of physics (think: adding better oil to an already seized motor, it ain’t gonna help) – adding that “oil” after the fact, regardless of the quantity is – too little, too late.

“Forward Guidance” is that “oil” of Federal Reserve policy making. And just like MMT, Unicorn valuations and more. The more they make sh#t up – the slicker the entire presentation for speed and durability.

And last week Mr. Powell did not disappoint, for he poured-it-out and laid-it-on so heavy the “markets” are acting like he was on stage firing up a newly rebuilt 1000+HP crate motor.

However, did anyone actually see said motor? Or even hear it?

I mean there he was on live TV selling-and-telling quite the statistical, technical jargon for information then, without even a flinch, raised his hand, unscrewed the top and began pouring that “oil” for everyone to see and hear, aka capitulation.

But I ask again: did you see or hear the “motor?”

Answer: No. As a matter of fact he even stated, more than once, that the delivery of that “motor” (e.g., pause of the balance sheet normalization process: QT) was maybe, possibly, could be, might be, __________ (fill in the blank be) “paused” at any time, in the future. Focus on – maybe, in the future.

And there my friends is where the proverbial rubber hits-the-road. Nothing has been done. Only words and promises – no substance, no actual display of there, there. i.e., You just gotta believe.

I say again, welcome to MMT: where “belief” is all the there – there is. For that’s all that was delivered at this latest Fed meeting.

Again, I repeat, the QT process is currently still going on, unabated, at the highest set amount (e.g. $50 Billion per month) and there will be no reduction, nor reconfiguring without, at the least, another “market” panic, which is where the real problem now awaits.

MMT is, in its theory and expression, nothing more than an over-glorified central bank inspired overtake of the entire global economy as to reset it into a Marxist/Socialist/Communist inspired construct of central planning delegation, where winner and losers of business and more will picked via the delegation of money printed ex nihlo to where some central authority will see fit.

Or said differently: an utter and complete con job to gain control of all mechanics of enterprise, where the self anointed and appointed cons will be free to do as they see fit, free from of any legal, moral or ethical ramifications. (Hint: see EU, ECB for further clues.)

And free market capitalism will be taken out back behind the MMT edifice – and shot.

You just can’t make this stuff up, well, unless you’re an MMT devotee. Then? The monetary world is your oyster, that is, as long as you keep it on ice. Because once it gets to stand in the light of day for awhile? Need I say more?

So now here we are as I suggested earlier, literally dancing within the early overtones of what MMT promises to bring forth via the current iteration of Forward Guidance tones emanating from both the Fed and its Chair.

Promises have been made, but so far, none have been delivered. Forward Guidance, MMT and Unicorn valuations all promise – but delivering is quite another. The only thing they deliver is a vehicle for one to believe in – you can’t drive it, for its illusive and illusionary.

I’ve demonstrated this before in what I call the “Silicon Valley Business Model.” It goes something like this…

“We’ll gladly pay you two hamburger tomorrow, for one today. As long as you promise to never ask us to make good on it.”

MMT, Forward Guidance, Wall Street, its all much the same: Promise, promise, promise, baffel’em with bullsh#t, promise some more, baffel’em with ever-the-more stats and jargon, promise even more, then remind them you have a Ph.D, are an economist and/or Senior Fellow at some obscure think tank. And if you can list any and all professorial affiliations.

Oh yes, and do try to get on one of the mainstream business/financial cable shows. For they’ll have no clue what you’re talking about and won’t even try to ask any deep questions, so you’ll be free to drivel-on with incoherent messages till at least the next Wisdom Tree™ ETF commercial needs to air.

It’s all one giant confidence game. All of it.

The only thing holding all of together at this moment is that the “markets” are believing what Mr. Powell promised. Which is where lies the rub to all of this.

Anathema to Forward Guidance, MMT et al. is the simple truth of where facts are made to intersect with fiction, as in: those proverbial “oysters” are now currently sitting in the sun.

The fact of the matter is, that if QT was the catalyst (something I have been adamant about) for the volatility that transpired, then the promise of halting, pausing, putting bows and having rainbows shoot out of its backside (albeit may look and sound quite interesting) is absolutely meaningless.

If it hasn’t (and Mr. Powell stated just that) been paused, or altered as in put-on-ice. That means its cause and effects are still ongoing, as well as intensifying, meaning: only the illusion of a “volatility pause” is in effect. The actual circumstances for it, in the first place, are still running, unabated, and at “light-speed.”

To reiterate, if the balance sheet was the actual catalyst, with all the now “Oh my god! It’s the balance sheet!!!” hysteria coming from the mainstream business/financial media, along with the entirety of Wall Street, and the Fed’s own admission to address it, now, publicly. It’s kind of hard to say it wasn’t, no?

So if it was, and the Fed has yet to alter it, then………….?

“Bueller?”

(And for those of you that get the above reference and don’t need to click on it? “Friday’s” gone, sorry, but someone needed to say it, for your own good.)

© 2019 Mark St.Cyr

Addendum To: 10 Years Ago Today…

It never fails, as soon as I make a statement about either this site or where my articles have either been, or the numbers I reference, I get an almost immediate “C’mon…” type of statement or questioning of my assertions.

I completely understand when it comes from people I don’t know, but when it comes from people I do know? It kind of gets a bit old, for it’s not like I haven’t made this case and proved or backed up my claims before. Or, in actuality done it: every – single – time.

So for those whom may be new to this site, or to my work, I offer up the following as evidence that I’m not just making crap up as so many others do.

I get it, there are far too many out there making claims that are absolutely horse crap. And because of it people like myself have to bare both the brunt, as well as the scrutiny. I get ticked off about it, but I can understand, as well as appreciate the reasoning.

Here are just three current screen shots of just three news sites that have carried one of my articles simultaneously and the verifiable traffic that is used and dictated as a standard across all of the media, using said source that is respected for its compiling of said data. To wit:

(Source)

Again, using just the above three, which I have had (more than once) one of my articles appearing on each, simultaneously, you get above the “100’s of millions” audience metric. Again, this is the same metric used across the entire media landscape by everyone. Repeat, everyone.

I’ll also reiterate: this is stating only three, for there are, and have been, far more others carrying the same article at the same time. So the above figures go even higher, sometimes, much, much higher depending. But I digress.

In other words: if it’s a good enough metric and source that the largest media sites in the world use to reference their audience, this includes such outlets as your “papers of record” like the NYT™, WSJ™, FT™,WP™ and more – then that should be good enough for everyone else. If not, there’s nothing more I can say, nor need to, for the numbers speak clearly and plainly for themselves.

© 2019 Mark St.Cyr

10 Years Ago Today…

On February 1, 2009 I decided to start an official blog. I had been dabbling with putting out various forms of commentary when it came to business and the capital markets. But a decade ago, today, I launched aka “Shipped.”

I had no idea of where or how far this little-blog-that-could would go. In most respects , at first, it was all about trying to explain the nonsense that was transpiring in the financial markets during and after the original financial crisis of 2008/09 to myself. A place where I would record what I was observing and trying to make sense of, with additional commentary or insight via my prior business acumen. And if others found it useful – that was great.

And some did.

Then, in and around 2010/11 I decided I would try my hand at getting more into what some call “the writing field.” This was a particular challenge for someone like myself, for as I’ve stated ad nauseam: I have a hard time spelling cat without spell checker. And when it comes to grammar and punctuation? Again, as I’ve said repeatedly – if the self-anointed Grammar Gestapo and Punctuation Police had their way, let’s just say, scenes from the Spanish Inquisition begin coming to mind. Oh, and yes, I am “The Comma King.”

However, with all of those impediments clearly visible and an immediate point for ridicule from those making up most of the “writing field.” I shipped, and shipped, and shipped again, then shipped some more, and more, and more. You get the idea.

I shipped (aka wrote) when no one was looking, I shipped when no one visited my blog for days, weeks and sometimes months on end. The more no one visited, the more I shipped. The exact opposite of what most do, which is precisely why you see most blogs die within a year or so. Yes, blogs or sites that are being populated by what are known as professional writers with perfect syntax, punctuation, spelling and grammar. The web is littered with them.

Yet, I persisted.

Then in late 2011 Seth Godin put a call out on his blog looking for authors to submit articles for a new adventure he was starting for a web based business magazine called UpMarket.

I thought to myself “You don’t have a prayer, his readers and followers are mostly professional authors themselves! His site is read by millions, can you imagine how many submissions alone they’ll be? And you can barely spell cat, never-mind dog, you’re nuts to even consider it. Let it go.”

But something kept nagging at me saying, “Do it!” And I did.

I’m a big fan of Seth and even bigger fan of his mantra “pick yourself.” So I did just that and sent my submission in – and got picked.

Over the course of the following year I would find my articles right there, many times alongside Seth’s. For someone who is not in any way, manner, shape or form with anything that is typically thought of when using the term “writer.” It was a big deal to me and still is. And one I’m very grateful for to this day. I still look-back to that point as a significant touchstone/milestone moment.

Then the magazine and platform supporting it was subsequently sold and renamed. And with that I moved on. Or should I say moved back to where it all started. e.g., my blog, alone, again, posting into the ether.

Once again, the more no one showed – the more I wrote.

I did everything in the opposite fashion all the so-called “guru’s” of the web were telling/selling. i.e., I didn’t allow comments, I didn’t post (or spam) my ideas or cometary in other websites comment sections, I didn’t allow ads on my blog, I didn’t allow for the selling of email, I didn’t buy any email lists, I didn’t (and never have) spammed, and on and on. And the most anathema stance to the entire “writing” genre that I did to the screams, howls and outright laughter of those same guru’s was – I did not use social media. Yes, I allowed sharing buttons (which I discontinued a while ago come to think of it) if one so wanted, but as far as me having an account? No.

Everyone I had ever talked to back then said the blog would be gone in a year, if not sooner. That was nearly 10 years ago – and here we are.

So how has all that “anathema” to the so-called “guru-set” done for me? Here’s just a sample, for the list truly is too long for this article alone. To wit:

  • As of today I have typed (aka shipped) over 1,500,000 words on this site. That is the equivalent of approximately 60 contemporary business books, all written and published (all in the site’s archives) within 10 years time.
  • I have written and formally published a book (A Fist Full of Mark’ers) that has been downloaded and read in over 60 countries. (I have since removed it or, as they say in the business, is now “out of print”)
  • My articles have appeared either alongside, same page, same source with such distinguished luminaries as David Stockman, Nassim Taleb, Seth Godin, James Kunstler, Thomas Sowell and many, many others.
  • My articles have been either featured, referenced, or directly quoted across the globe and on some of the most widely visited news sources not to mention 1000’s of other blogs.
  • I have been quoted and referenced directly in many news articles across the mainstream business/financial media when opposing viewpoints were articulated, or juxtaposed to some of the largest figures in finance and markets such as Warren Buffett and others.
  • Depending on the article and media sources that may carry my thoughts and/or viewpoints, at any time, one of my articles reaches an audience from 1 to 1 million, 10’s of millions, with gust upwards into the 100’s of millions. If you use The Drudge Report™ you can use 1 Billion. Again, still, and at any time.
  • I am now a globally recognized expert/authority on both the capital markets and the macro/micro financial business landscape. Which, by the way, is a true requisite for using the term “thought leader.”
  • My site (aka blog) is still routinely visited by 160+ countries with an average of 10 differing per day. i.e., at any time there is someone reading my work somewhere, around the globe.
  • I have been both at the center, or the impetus, of some of the largest media stories. (It sounds over the top, I know, but I’ve backed that claim up with real verifiable data. Even I’ve been astonished.)
  • I have documented many times (as well as demonstrated through speaking) my strategy of not using social media has been more effective and reached more people on that media than most – and I don’t even have an account.
  • Did I mention I can barely spell cat without spell checker?

I could go on, but you get the picture. It’s been quite the journey, and to all of you that have been here in one form or another both from the beginning as well as recent, I would like to express my deepest gratitude.

So now we embark on another ten and I would like to finish this with what I finished with on that first day, which is a quote from one of my favorite songs and bands. Pink Floyd, “Wish You Were Here.” Again, to wit:

“Did they get you to trade your heroes for ghosts? Hot ashes for Trees? Hot air for a cool breeze?

Cold comfort for change? Did you exchange a walk on part in the war, for a lead role in a cage?”

Hope you decide to join in – for it’s been quite the ride over the last decade.

For we’re just getting started, again!

© 2019 Mark St.Cyr

Addendum:

It never fails, as soon as I make a statement about either this site or where my articles have either been, or the numbers I reference, I get an almost immediate “C’mon…” type of statement or questioning of my assertions.

I completely understand when it comes from people I don’t know, but when it comes from people I do know? It kind of gets a bit old, for it’s not like I haven’t made this case and proved or backed up my claims before. Or, in actuality done it: every – single – time.

So for those whom may be new to this site, or to my work, I offer up the following as evidence that I’m not just making crap up as so many others do.

I get it, there are far too many out there making claims that are absolutely horse crap. And because of it people like myself have to bare both the brunt, as well as the scrutiny. I get ticked off about it, but I can understand, as well as appreciate the reasoning.

Here are just three current screen shots of just three news sites that have carried one of my articles simultaneously and the verifiable traffic that is used and dictated as a standard across all of the media, using said source that is respected for its compiling of said data. To wit:

This image has an empty alt attribute; its file name is Screen-Shot-2019-02-01-at-11.35.56-AM-1024x831.png
(Source)
This image has an empty alt attribute; its file name is Screen-Shot-2019-02-01-at-11.36.26-AM-1024x765.png
This image has an empty alt attribute; its file name is Screen-Shot-2019-02-01-at-11.36.56-AM-1024x839.png

Again, using just the above three, which I have had (more than once) one of my articles appearing on each, simultaneously, you get above the “100’s of millions” audience metric. Again, this is the same metric used across the entire media landscape by everyone. Repeat, everyone.

I’ll also reiterate: this is stating only three, for there are, and have been, far more others carrying the same article at the same time. So the above figures go even higher, sometimes, much, much higher depending. But I digress.

In other words: if it’s a good enough metric and source that the largest media sites in the world use to reference their audience, this includes such outlets as your “papers of record” like the NYT™, WSJ™, FT™, WP™ and more – then that should be good enough for everyone else. If not, there’s nothing more I can say, nor need to, for the numbers speak clearly and plainly for themselves.

© 2019 Mark St.Cyr