Author: Mark St.Cyr

Mark is a globally recognized expert in entrepreneurship, motivation, business, sales and financial markets. He writes from a first hand perspective. His insights can be both cutting edge, or just a cutting through the clutter. Either way they come from first hand knowledge, and experience that is classic Mark. Visit www.MarkStCyr.com "Pragmatic Insights For Today's Business World™"

Welcome To The Goldfish Market

It was long assumed that the memory retention of a goldfish was all of about 3 seconds. That conclusion has since been refuted where it is now shown that fish have memories lasting for up to (important qualifier there) five months.

This is an important point of clarification because, if we can now prove scientifically that goldfish have up to five months, we can now use this same research to help quantify the behavior of today’s “market” BTFD’ers (buy the f’n dippers).

The BTFD’ers (today’s goldfish/guppies) seemingly can’t remember past two or three seconds and see every dip as floating “fish food” to be consumed immediately. Those with longer lasting memories of “up to” five months seem to be the mainstream business/financial media, next-in-rotation fund-mangers, Ph.D’d economists and assorted buzzer-kings. And this “up to” qualifier seems to be legitimate settled science. For I ask…

“Does anyone not part of the gill-bearing species remember just how awesome everything was told and sold via the Fed while emphasizing it was to continue way back in the ancient history of about five months ago?”

If you do? Consider yourself as passing today’s aquatic version of a “Turing Test” and take solace as to being free of any further association with the lemming class.

If not? Then your school of thought (see what I did there?) can only be one thing: you believe the Fed. (and all central bankers for that matter) know what they are doing. Maybe, loss of memory can be bliss, no?

To help those with a short memory. It was only back in early October, you know, just about five months ago, when both the Fed along with its Chair voiced how well the economy was doing. It also signaled that everything the Fed was doing, watching, contemplating and more in regards to rate hikes, balance sheet normalization and so forth was running so smoothly that everything was to be assumed as “steady as she goes.”

Then, suddenly – a new term entered the “markets” vernacular that was a bit of a mashup of another from ancient history and all but forgotten. i.e., “Brace for impact – because this suckers going down!”

Within weeks the “markets went from all time highs to bear market status culminating in more newer, revised old terms such as “historic sell off” and more. But alas that too is now consistent with ancient history status if not forgotten entirely. For proof, all one needs to do is peruse the aforementioned media outlets. I mean: who needs an aquarium when you can just leave the TV running on any market/business channel, right?

Today, the Fed and many of its players have taken to this same media and are now making convoluted arguments as to why the economy is both on sound footing, as well as precariously positioned. Why everything the Fed has done has been “the right thing” while at the same time is ready to jettison it all should their latest interpretation for health ends up incorrect subsequently killing the patient in the mean time.

Another is that there are both current and past Fed members giving completly oppsite interpretations of current policy. One says “nothing to see here, just move along please” another says “we need to reverse course and pause” and still others giving the impression that they already have, but know they have done nothing of the kind.

And the “markets” have taken the bait hook-line-and-sinker buying anything and everything is sight. That is, those with the now scientifically proven expanded memory of a fish. Everyone else?

The outflows are showing conclusively that they are not of the marine species and remember all too well how fast an “everything is awesome” pool of fun and money-making can turn into a whirling cesspool of money and profits down the drain.

Allow me to jog the memory of those of the aquatic craniate family with one word: December. Or, is that also been swept into the memory hole of never-to-be-seen-again status of the ancients? Looking at these “markets” of late, it would appear rightly so.

Speaking of “looking.” Let’s do just that, shall we? Sometimes all one needs to jog one’s memory is to be shown a picture. And, since that’s what they call them in Silicon Valley, let’s look at one. You know, “for the memories” as we like to say. To wit:

(Chart Source)

The above is the S&P 500™ as of this writing where the bars/candles represent one hour intervals. As you can clearly discern we were at “never before seen in human history” highs when the Fed announced that the normalization was going on as scheduled and would increase to the now $50 Billion per month light-speed status. The market reaction was near instantaneous.

Then the “markets” bounced or should I say ping-ponged in what I coined as the “manic – depressive” region of 2600 – 2800 as Mr. Powell attempted to clarify his remarks pertaining to Fed policy.

That is: until in December, when he uttered the word “autopilot.” And the market never looked back.

That is, until both he, as well as as many others, could get to a microphone, camera, or keyboard and state as forcefully as they could the word “pause.” And since then, once again, the “markets” have not only forgotten about the normalization process (QT) but have subsequently gorged on the idea that rate hikes and QT are now a thing of the past, as in nothing more than the equivalent of a bad dream. i.e., “it wasn’t real.” Hint: the genesis of the “nightmare” still lives.

QT is still running on “autopilot.” It has not been altered via any current reporting. And the higher the “markets” continue on their current accent – the more likely that March turns from the illusion of “paused” back into “live.” Again, for it needs to be repeated for those lacking any memory: All while the balance sheet continues in its “autopilot” status.

Should the “markets” not be able to pierce the now obvious demarcation line above 2800 and reverse? By the time the Fed meets in March to say “Hey, see we didn’t hike!” but the balance sheet shows another $100 Billion gone? Let’s just say old memories of “this suckers going down!” might begin to rush back into those now gorging BTFD’er guppies.

And lest we all not forget what usually is the last memory of many a goldfish and guppy. For those that need a hint?

Rhymes with the word: flush.

© 2019 Mark St.Cyr

From Autopilot Paused to Cruise Controlled Hosed

“What we’ve got here is a failure to communicate.”

“The Captain” (Strother Martin), “Cool Hand Luke” (1967, Warner Bros – Seven Arts)

Ever since the end of 2018 going right into today as I type. There has been two words repeated ad nauseam across the entirety of the mainstream business/financial media (MSBFM) to give reason for both why the “markets” are rising, as well as why one should now BTFD (buy the f’n dips) not only horns-over-hooves, but to back up the biggest dump-truck they can acquire and fill it with as many stocks as possible. Rinse, repeat.

Those two words are: “paused” and “capitulate.”

What these words have been stated to mean is: The Fed, along with its Chair, had now explicitly signaled they’ve capitulated and paused both the Balance Sheet Normalization Process (QT) as well as any future rate hikes. i.e., there was now an active “Powell Put.”

The problem with this reasoning should not be lost on anyone.

Not that I’m the best conduit to explain what words mean, but this so-called “smart-crowd” should understand, at their core, the term “active” and “put” in the same sentence means a position on, not one that will be placed in the future. i.e., you only get paid if its placed and at risk of assignment. Everything else is: would’a, could’a, should’a, loser talk.

Again, all the reasoning across the entirety of the MSBFM for this latest rocket-ride up from the depths-of-despair only weeks ago is attributed to one thing and one thing only: capitulation and its subsequent meaning for action.

However, it is precisely here that focus should be paid, and here’s why:

Paused: verb, past tense: Paused; past participle: paused interrupt action or speech briefly. “she paused, at a loss for words” Synonyms: stop, cease, halt, discontinue, break off, take a break, take a breath; temporarily interrupt the operation of…

Capitulate: verb. Cease to resist an opponent or an unwelcome demand; surrender. “the patriots had to capitulate to the enemy forces” synonyms: surrender, give in, yield, admit defeat, concede defeat, give up the struggle, submit, back down, climb down, give way, cave in, succumb, crumble, bow to someone/something…

“What’s the issue?” you may be asking, because that fits nearly verbatim of how the entirety of the so-called “smart crowd” has been defining this current rally. Good question, and here’s why.

Via Wolf Richter’s, Wolfstreet™. “Fed’s QE Unwind… Remains on “Autopilot.”

The Fed shed $32 billion in assets in January, according to the Fed’s balance sheet for the week ended February 6, released this afternoon. This reduced the assets on its balance sheet to $4,026 billion, the lowest since January 2014.

In January, the balance of MBS fell by $15 billion to $1.622 billion, back where it had been in April, 2014.

…with a reduction of $17 billion in Treasury securities:

So the January roll-off continued to proceed on “autopilot,” as outlined in the Fed’s 2017 plan.

Here’s what you truly need to take away from the above: the term “paused” is not applicable with the reality of the facts now forthcoming. And if “paused” is not applicable – then neither is the term “capitulate.” (on a side note, Mr. Richter has done an outstanding chronological reporting of the entire process.)

Can you say, “Uh oh?”

Here is what I said following Mr. Powell’s January presser, from my article, “The Question Is: Did He or Didn’t He…?” To wit:

Again, via every media outlet I have perused, both mainstream and specialized, the consensus is that Mr. Powell along with the FOMC capitulated and folded to the “markets” whims making a cheap suit envious.

This may be entirely correct, however, let me ask you this: What did they actually do? Not – what he said they could do.

Again: Did they pause the balance sheet normalization process (QT) or even reduce its size from the now still running on cruise control $50Billion per month?

Hint: No. And that should tell you far more about what you truly need to know rather, than what the Fed is telling you you should hope for.

Remember, that was in reflection for what transpired through December, now you have January’s going into February – and the “markets” won’t know anything further till, at the least, late March. All the while the QT process is proceeding at hyper-speed and on “autopilot.” Again – via hard numbered, verifiable facts.

Again, from the same article:

Since there has been no declaration via the Chair that there has been any alteration to the process. And even reaffirmed that it was still going on as advertised, where the committee itself agreed and voted that it should continue on unabated means, that from now until March, almost $200Billion will be removed (generalization for example math, but you get the point) or allowed to be rolled-off until Wall Street has another glimpse into what happens next.

And “next” just might be another $100Billion (e.g., April) till the next meeting. Think about that, again very carefully.

(Quick explanation on the math and why it’s important: “$200 Billion” refers to when in October/November of 2018 the QT process began reaching the hyper-speed levels of $50 Billion per month i.e., Oct, Nov, Dec, Jan. which is where we are currently. Now you’ll have February and March which equates to another or approximate additional $100 Billion that will more than likely reported after the fact, just like the above. I hope you can see the implications of the difference with what was said, and what has been allowed to continue.)

As I’ve stated (again, ad nauseaum) what I believe we have witnessed since the now famous (or infamous, depending) “Call from Cabo” along with the most recent “capitulation” prognostications from the media and more, has been nothing else than a headline fueled, HFT, algorithmic, parasitical running of stops and short squeezing as to position for: earnings report, end of month, new month window dressing shenanigans, and last, but certainly not least, a Fed meeting that everyone including most shoe-shine boys knew there would be no raising of rates for this meeting.

The above was all contained within one seemingly manna-from-heaven time frame for doing more with less.

“What do I mean by ‘more with less?'” you ask? Great question, again, to wit:

Since December there has been a record amount of outflows that has continued, almost unabated, to where we sit currently.

And here we now are with earnings season about over and those that have reported have been lackluster at best, pathetic at worst. Trade talks that seem to be going nowhere fast, a looming deadline of even higher tariffs if they go nowhere even faster, another possible government shutdown, again, looming.

Oh, and did I mention that the Fed’s balance sheet is still on “autopilot?”

What could possibly go wrong, right?

© 2019 Mark St.Cyr

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

The Question Is: Did He or Didn’t He? The Answer?

As I’m typing this the tenor, tone and outright absolution as to the consensus of both Jerome Powell and the entirety at the Federal Reserve is summed up in one word: capitulation.

Again, via every media outlet I have perused, both mainstream and specialized, the consensus is that Mr. Powell along with the FOMC capitulated and folded to the “markets” whims making a cheap suit envious.

This may be entirely correct, however, let me ask you this: What did they actually do? Not – what he said they could do.

Again: Did they pause the balance sheet normalization process (QT) or even reduce its size from the now still running on cruise control $50Billion per month?

Hint: No. And that should tell you far more about what you truly need to know rather, than what the Fed is telling you you should hope for.

Over the weekend I laid out what I felt were important harbingers as to what may be forthcoming in terms of “market” gyrations and more. In that piece I noted some earnings, trade talk consequences and of course The Fed. As I type this I am still of the same opinion. i.e., “Good luck, you’re gonna need it.” Here’s why…

The word currently is “All is clear! The Fed’s got your back. Buy, buy, buy, then buy some more!!!” The reasoning? Hint: Earnings are great, the Fed capitulated.

I’ll ask again: They are and did?

Apple™ beat a disastrous downgrading of its prior expectations. That’s not a “beat” rally taking place in Apple-the-stock via my interpretations, that’s a sigh of relief rally helped with a few scalded-shorts thrown in for good measure.

Hint: Does a $165 rally get Mr. Buffet back to break even? Think about that very carefully before you accept all the current hype.

Facebook™ beat!

Again, why wouldn’t they? It’s the 4th Quarter which means the holiday season. What needs to be seen is how all those ads paid off for retail over the holiday shopping season, for we do not actually know via any reports because of the government shut down, meaning: will those ads continue into the next Qtr?

To reiterate, once again, Facebook is basically one of the two remaining (Google™ the other) last-man-standing when it comes to hope-and-spray mindless advertising. 1st Quarter will be far more telling.

Remember, at the beginning of that Qtr. the consensus was “everything is great!” Then it wasn’t – but ad buys into a holiday season are already decided, as well as many already inked at that point.

Think about what everyone (as in media, as well as the Fed itself) was stating about the health and wealth of the economy as early as September of last year. Remember the narrative of the economy back then? It was doing so well that even the Fed decided it was so good terms like “more hikes” and “autopilot” were of little concern.

Then they said them – and it all came off the rails causing them to backtrack so fast and so furious it seems worthy of its own sequel titlling resembling its movie counterpart .

Then we have all this taking place within the same week of both a month end, as well as a new month for portfolio rebalancing and exposure. The “fun and games” of window dressing (as I stated prior) would probably go to 11. And so far, that seems the case. Again, all conjecture on my part, but I seem to be the only one stating what I believe is the obvious – not the trite and tripe I hear across the mainstream business/financial outlets currently.

Now to the Fed: Did they capitulate? Well, it depends on what your definition of is, is? Or, said differently, they did – sorta.

If one watched Mr. Powell’s presser I would like to ask you this very pertinent question: Is the balance sheet paused, or has the monthly $50Billion roll-off been reduced? By any amount?

Answer: No. Period, full stop. And that’s where you need to be paying attention. i.e., not what he said, but what they’ve done.

As I’ve stated ad nauseam at every post meeting since the “autopilot” debacle there is, and will continue to be, $50Billion less per month for Wall Street to play with. Again: every – single – month.

Since there has been no declaration via the Chair that there has been any alteration to the process. And even reaffirmed that it was still going on as advertised, where the committee itself agreed and voted that it should continue on unabated means, that from now until March, almost $200Billion will be removed (generalization for example math, but you get the point) or allowed to be rolled-off until Wall Street has another glimpse into what happens next.

And “next” just might be another $100Billion (e.g., April) till the next meeting. Think about that, again very carefully.

Mr. Powell did give the impression that both he and the Fed would capitulate, or “pause,” or whatever should circumstances call for it.

However, Wall Street is a front-running surety type of entity – not a could, should, might, ____________(fill in the blank.) You don’t get rich on Wall Street, as they say “guessing.” Think Mr. Buffet guesses? If you do, I have some very nice oceanfront property in KY you can have for a steal – trust me.

The conditions and factors that the Fed introduced which caused the volatility in the first place are still there – and – are increasing (or rolling- off if you will) to the tune of $50Billion per month still.

The 2018 year-end debacle happened when the “markets” got their first glimpse of what that actually meant (e.g., $50Billion going “poof”.) It now has to deal with the same assumptions till at the least March, 20th.

Should the “markets” remain at these levels alone (i.e., scream sideways for an even longer duration) the Fed may be so inclined to stay the course on QT, but also may decide with such “stabilization” it warrants another rate hike. And if that happens? Hint: assuming another $50 or $100Billion removed and its consequences all rolled into the prospects or possibility of another hike. Think about it.

So, the question still remains: Did he or, didn’t he?

Answer, in words: absolutely. In deeds? Absolutely not.

I contend if the balance sheet normalization process mattered at all (which I have been one of the few resolute in the opinion of: it’s all that has ever mattered) then once this week ends and all the ancillary happenings that has helped fuel much of what I’ll still refer to as “window dressing based shenanigans” to continue – everything that scared the “markets” originally back in October returns with a vengeance, as in…

QT continues on, in “autopilot” until it has what may be called another car sequel comparison. Hint: see Tesla™ autopilot for clues.

As always, we’ll see.

© 2019 Mark St.Cyr

Dear Jerome: Good Luck This Week, You’re Gonna Need It

As we sit here and await the new week of “market” machinations still basking in the afterglow of what can only be called a resumption of BTFD (buy the f’n dip) euphoria. It appears the old expression in regards to the Federal Reserve and the “punch bowl” has morphed from being the so-called “adults” in the room and taking it away when prudent, to one similar to a parent trying to ween their kid off of a smart-phone. i.e., The sooner they (children) start screaming (the louder the better) – the sooner they’ll get it back.

It appears that a 20% sell off scream was all it takes today, for get it back they did.

Well, sorta, is probably more like it, which is where the real ramifications now await. i.e., followthrough on promises made.

Make no mistake “sorta” will not cut it to either the “markets” or that hypothetical child. Mr. Powell, along with others of the Fed, insinuated via the customary Fed-speak that they would return the so-called “punch bowl.” i.e., halt or “pause” the balance sheet normalization schedule (QT) along with halt or “pause” any further rate hikes.

Think of it as the equivalent of that aforementioned “child” being returned their $1000+ phone. The “markets,” much like that child, are not expecting nor will they be satisfied with any sort of implied – maybe. They are expecting delivery of said promise, in hand – Wednesday.

If the Fed thinks it can talk its way out of not producing (via verifiable deed and explicit wording) and promising another “maybe” as some sort of parental “we’ll see” insinuation for the next meeting? I’ll only say one thing…

Good luck with that, you’re gonna need it.

To a child, as well as these markets, any form of insinuations or alluding to returning something they want means the same. e.g. you promised, now give it back!

The adult can sit there till the stars burn out trying to explain how they really never did “promise.” But as anyone who’s ever dealt with a demanding child – maybe means promised or, you’ll pay the price one way or another.

However, this is far from the only issue that will be surrounding those still basking in the afterglow. Because when it comes to the potential hangover awaiting this latest three week excursion of BTFD exuberance – the potential for any headaches turning into clinical, fetal-position inducing migraines are significant.

Let’s just remember where we are and how we got (back) here for a moment as to re-emphasize the reasoning for caution.

Three weeks ago the “markets” were plummeting and if not for the Treasury Secretary openly implying that the PPT (plunge protection team) was being asked to suit-up and be ready-to-engage they may be well lower. This then prompted (I would use the word demanded, but that’s just me) not only the Fed Chair but also others within the Eccles Building to get in front of anything with a camera, microphone or keyboard and jawbone as much “pause” as plausible.

So far it has worked. Well, then again, sorta. Let’s look at a few of what they call in Silicon Valley “pictures” to put things in a bit more perspective, shall we? To wit:

I posted the above chart back on Jan. 17th and indicated that the “anywhere in here” was an area worth watching for further clues. It seems my hunch was correct. Although we have bounced above it we have also bounced back squarely within it over several days. Here’s an updated version. Again, to wit:

(Source)

The reasoning why the above are significant is via their technical implications, for if we fall back through and below that notated “anywhere…” level, then there is a higher possibility we resume the prior selling of December with a quick test into the “then here” levels, retesting the lows of only a few weeks ago.

The real issue for both the “markets” and the Fed will be if that low holds. If not? Everything as far as further calamitous upheavals of panic and more are squarely back on the table.

Make no mistake about it, regardless of what the so-called “smart-crowd” across the mainstream financial/business media insinuates. Should we get back into that area (as in Dec. lows) everything, and by that I mean just that – everything – is back squarely on the table.

Speaking of “table.” Let’s look at what other potential menu items are due to be served-up this week that have the potential for giving the “markets” an acute case of indigestion.

  • A Chinese trade delegation arrives Monday for supposed “talks.”
  • Caterpillar™ reports earnings. A significant global-health bellwether.
  • Apple™ reports Tuesday. Need I say more?
  • Then, throughout the week you’ll have others such as Facebook™, Amazon™, Boeing™ and of course everyone’s “I gotsta know” favorite, Tesla™.
  • Thursday is the end of the month so the normal gyrations apply, as well as the same for Friday, for that’s the beginning of the new month for February. Or said differently – look for normal month-end and month-start hyper positioning activity to go to 11.
  • Friday we are also to get the latest jobs report. We may also (conjecture but noteworthy) since the government shutdown has been put “on pause” we could have a slew of prior unreleased reports suddenly being released, unannounced. Again, conjecture but noteworthy should it happen.
  • Since the government will now be open – the now open and newly appointed House with its various “impeach at any cost” committees will be free to resume, will they make up for lost time and interject their views into the “markets?” Hint: Bank CEO’s, congressional panels.

The above is only a handful of what is on-deck for this coming week. And smack-dab in the middle of it we have what may be the most important Fed meeting (Tuesday and Wednesday) of the entire year as far as the “markets” are concerned.

To say there may be a bit of pressure on the Fed this time around may just be worthy of the term understatement as ever there was.

However, there is also a flip-side to all this, and it is this:

As much as there is the potential for calamity there is also the same potential for more – far more – BTFD exuberance and euphoria should any of the above listed turn into favorable outcomes.

As one can see on the above chart I notated with the “anywhere…” box, the “markets” are currently sitting above, and in actuality, gapped higher to those up-and-out levels on several occasions where they remain as of this writing. Meaning: The hope is for Mr. Powell to return the necessary “punch bowl” to help fuel its progression onward and upward.

Remember: the “markets” (much like that child I cited prior) are of the assumption their “punch bowl” is to be returned on Wednesday.

Should Mr. Powell take to the stage in the Wednesday presser and deliver something of the equivalent to antacid and aspirin Fed-speak, as opposed to a punchbowl filled with some hair-of-the-dog type equivalent. This market is going to show just how childlike it can be when said “child” suddenly finds out they’ve been duped by mom or dad and their $1000+ smartphone isn’t forth coming.

As I said in the beginning, if that happens?

Good luck with that, you’re gonna need it.

© 2019 Mark St.Cyr

Looks Like We’re Back To The “Dirty Harry” Market Once Again

It’s been an amazing turn of events when one looks over the past few weeks in regards to the “markets.” On Christmas Eve the entirety of Wall Street had suddenly come to conclusion that, “All was lost!” Now, only weeks later, all that doom and gloom has been replaced with, “Happy days are here again!” It’s been a case study for mass psychosis if ever I’ve seen one.

The reason for the title above is that I’ve used it more than once (and it’s been shown correct just as many times) to describe where we might be in relation to what is being told-and-sold across most of the mainstream business/financial media. In other words, riverboat gambling and its consequences has now become the modus operandi for financial commentary and investing prowess.

If you are one of the few that has remained doubtful that the capital markets have become nothing more than a “casino?” You now know why that expression was used to express such. i.e., 2018 “in the black” was supposed to be a “sure thing.” Hint: it wasn’t.

To the bewilderment of patrons, along with their croupier of choice, they watched in horror as their winning “ball” rolled out of the “black” only to land in the “Red.”

The only thing adding more insult to the injury was this happened just when it appeared the spin was all but over and the celebratory rounds of libations (aka bonuses) ordered – only to then stand and watch as all their “chips” were suddenly swept off the table. i.e., and out of one’s 401K balance.

So now it’s the same cohort of casino “Market wizards” shouting out to anyone left that will listen (and that still has any remaining funds) that it’s time to get back in there and BTFD (buy the f’n dip)!

Well, then, there’s only one remaining question one needs to ask, “Do you feel lucky?”

If you were one that answered that question last time I asked it back in July of 2018 with a resounding “Yes!” Then you did quite well, until – October. (on a side note, I thought it was going to be a Yuan induced roiling, but the Chinese politburo seems to have thrown anything-and-everything at making sure that is the one area that doesn’t show weakness. And the reasoning behind that conclusion I’ve stated many times prior. Hint: SDR, IMF’s “Special Drawing Rights” and all it implies geopolitically)

But after that? Then, not only did you lose your winnings back to July, but you lost all of 2018 all the way back to March of 2017. e.g., 3 months of wins wiped clean followed with an additional 16+months of prior winnings, again, wiped clean as in – wiped from one’s account balance. All in less than 60 trading days.

Again, for this point can not be made too many times: all after it was assured by the croupiers across “bubble-vision” that 2018 in-the-black was a “sure thing.”

Still think the term “casino” isn’t fitting?

So now here we are just three week into the new year from what was deemed by many as a “near death experience,” this same group is now touting that 2018 was a “one off,” and that the “Powell Put” is now known and will be respected. i.e., The Fed’s got your back – again. BTFD – again!

Well, maybe they do, and then again, maybe they don’t. For the answer to that question is still confusing at best and down right alchemic at worst. i.e., everyone is saying it’s now possible – but yet there is still no proof, only words of fancy incantations. Hint: “we could or would ‘pause'” is something very different than “we paused.”

Said differently: “Looks and feels like gold” doesn’t make it such, hence the alchemic reference.

But that’s not the way this most recent “market” upswing is being portrayed. It’s now being marketed as “Everyone’s a winner – just pick your lottery ticket ETF of choice, sit back, and watch the winnings roll in in 2019.” i.e., “buy, Buy, BUY!”

Again, may be, and maybe not. So in the immortal words of Harry Callahan you now, once again, need to ask, “Do I feel lucky?” Because that’s what you’re asking in reality. For if you still think the so-called “smart crowd” has any idea? Hint: they, along with the Fed itself stated ad nauseam that both interest rate hikes, along with the balance sheet normalization process, was all “known knowns” beginning in January 2018. And the “balance sheet” process would be basically unnoticeable. i.e., running in background.

Then all those “known knowns” suddenly blindsided them – all of them – in October as they were all busy tabulating their winnings for end of year. Need I say more?

As we sit here today there are a few other “known knowns” that have the potential to unleash a myriad of unknowns across all sectors of business and politics that very few can imagine, never-mind contemplate their severity.

The Federal Reserve meets for its January conclave. At this moment no interest rate adjustment (such as hike) is seen forthcoming. However, that is not what the “markets” are truly concerned about.

The only thing (and by that I mean, just that) the “markets” want confirmation of is that the Balance Sheet Normalization Process (QT) has either been already paused or, is being paused via an actual date or amount. Period.

The Fed (and all its various players) have been out, one after another, touting a rake hike pause is basically “in the cards.” When it comes to the question surrounding QT they have all been superficially sympathetic, with most responses revolving around one form of “of course we could, possibly, might, maybe, _______(fill in the blank)”

But there has been no, “We shall, we have or, we did” as of yet. I am of the opinion that’s the only form of verbiage the “market” is going to accept as proof they actually did something. All other forms of word counting will be inconsequential.

The other of the “known knowns” into unknown territory is that of the political, both here in the U.S., as well as abroad in places such as France, Italy, U.K., China and more.

Here in the U.S. the President made what by many was seen as, at the least, a reasonable start for further negotiations. The opposing party sent their refusal or, no before the proposal had even been fully heard.

No matter what side of the political aisle one sits, one thing is unquestionable: One side has made it abundantly clear they have no intention of negotiating, regardless of what is being reported. The act of sending a reply of no – before the address was even finished – tells you all one needs to know. It’s not called political skullduggery for nothing.

So now we await the fall-out. What happens now that the “markets” have to accept that a shutdown in the U.S. may indeed be closer to the beginning rather, then the end? Add to that what happens as European countries squabble over not only throwing away the idea of an E.U., but rather the idea of their entire home political members as well?

Then, of course, there’s China. What happens to their entire politburo model should the effects of the current stalemate in tariffs not end soon?

So far Hong Kong home prices are floundering, factories are announcing major lay-offs. The PBoC has had to inject massive amounts of liquidity into its financial system just stabilize already growing nervousness.

Then, suddenly, the Chinese politburo announced the other day that it would actively inject money (e.g., buy) into its own stock market and purchase shares of companies as a way to both stabilize and boost investor confidence. A once absolute “never would” assertion. (Makes one wonder why now if everything is/was so great, hmmm? But I digress.)

In the U.S. the “markets” are closed for an observed holiday (e.g., MLK Day) Yet, the Asia, along with European markets will be open and we may get a quick look at what everyone thinks of all this recent U.S. news and how it may, or may not, effect their markets.

We also could basically see no movement except for what I call a “screaming sideways” rendition of bouncing, or pinging higher and lower in-and-around this area, until the Fed renders its verdict of deliberations at the end of month.

Regardless, until then, anyone contemplating if this is another “great opportunity” to once again “BTFD,” there’s really one one way to answer. Again…

“Do I feel lucky?”

© 2019 Mark St.Cyr