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The Summer of Meltdown

This post will begin with a rant and end with the summer of meltdown, so if you are easily triggered you should jump back to the Kardashians.

Normally I avoid politics, but events of the past week have reached the existential plane.

First off, it's not too late for the Democrats to call up Gary Busey to invoke the nuclear option. They are clearly in panic mode. That party has officially lost all erstwhile claim to intellectual superiority as they run their campaign like it's Weekend At Bernie's. Eight years ago Hillary Clinton at the top of her game ran circles around Trump on the facts, but she lost to him regardless. So now Democrats thought they could roll the dice on Elmer Fudd again when Trump already trounced an entire field of primary challengers in the fastest primaries in U.S. history. Not to mention Trump defeating the pathetic Democrat legal attempt to end democracy.

And then the Republicans. How soon they forget that their great Ronald Reagan was functionally senile when he left office. He was a doddering fool not thought to be competent enough to testify to his role in Iran-Contra. The defense claimed he didn't know what was happening the whole time. And everyone believed it, because Reagan's entire presidency had been one big Hollywood production. Eight years of Bedtime for Bonzo. Fast forward and now the GOP is taking a victory lap over the return of Trump. Trump doesn't have a better handle on the facts than Biden, he just lies continuously so he doesn't have to remember anything. In other words, what passes for victory in the post-Reagan GOP is voting for a candidate who makes up bullshit non-stop while ridiculing a candidate who is senile.

In other words, it's already game over, but the peanut gallery at large just hasn't figured it out yet. There are no "winners" in this festival of idiots.

Now, back to the show...


Make no mistake, the Trump rally has been growing in size all of 2024. All of June, hedge funds have been taking profit in Tech stocks and rotating to cyclicals in anticipation of the massively "reflationary" second coming of Trump.

No surprise, this is the biggest rotation since 2017 which drum roll was the first year of Trump's presidency:

"In a month when Nvidia Corp. briefly became the world’s largest company, hedge funds were “aggressively” selling tech stocks"

This month’s net selling in the US tech sector is on track to be the largest on record going back in data since 2017"

Semiconductor and semiconductor equipment stocks were the ones offloaded the most by hedge funds"

So, in the same month when Nvidia split and became far more accessible to retail bagholders, hedge funds sold at a decade high rate. That is known in Wall Street parlance as "distribution".

Here we see via the 2x (futures) levered ETF what I call the "Gamification" of Nvidia. Similar to how Gamestop sucked in a generation of fools and then spit them out in early 2021, except Wall Street's financial Weapon of Mass Destruction (WMD) has been growing inexorably larger in the meantime. Now featuring options on futures on a stock that has been manipulated to a $3t valuation by the unprecedented application of Silicon Valley hype cycle criminality.

What I call the Apex of Idiocy (AI).

On the topic of the financial WMD, Barron's this weekend wrote this article extolling the popularity of 0 dated options:

“You can go completely broke, but there are occasional Lotto-sized payouts”

Whether 0DTE options will destabilize markets—especially if they proliferate to individual stocks—is a point of controversy"

The European Central Bank raised concerns about 0DTE options in May, arguing in a research paper that “in view of the increasingly crowded positions in such trades, their abrupt unwinding…could lead to a disorderly correction.”

Indeed, 0DTE options haven’t been truly stress-tested. The Cboe Volatility Index, or VIX, known as Wall Street’s “fear gauge,” has been muted for years amid a bull market. “These unusually depressed volatility levels are not reflective of the global macro environment”


In other words, what I expect for the balance of 2024 is an AI summer meltdown with unexpected contagion to SEC-approved Crypto Ponzi schemes. Followed closely by a massively crowded Yen carry trade explosion/EM crisis. Renewed U.S. banking implosion, which I wrote at length about in my last blog post. And then I predict that central banks will be totally incapable of reversing the economic fallout from Wall Street WMD explosion, which is what the PBOC is learning right now.

And running in the background will be a political gong show to fully entertain the deeply stoned masses.

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