At this point, though, I guess we might ask what difference does it make, really? The rickety shack euphemistically called a capital market is doomed to buckle under the weight of debt revulsion whose probability increases with every utterance from Confetti's mouth and wallet.
We can be certain those in Congress on Team Fraud's payroll will have something to say to Confetti per rising rates while conveniently omitting, of course, any suggestion the Fed's insistence on choking down as much garbage as humanly possible has anything to do with this. However, the biggest federal budget surplus in history just recorded could prove enough to silence the most murderous austerity disciple among the bunch, so what can Confetti say about rising rates? It won't be, "We're all screwed!" Yet that's exactly what he should communicate.
Well, it is next week's worry. Who knows, with Confetti's assurance his helicopter will fly straight through to January, rates could be driven down below 2% by the time he appears before Congress. Yet what of the rotation out of bonds and into stocks trade? Will the insolvent crowd abandon this fantastic pretense and rather expose its dreadful addiction to a trillion dollar a year subsidy? That's what they did today, and shamelessly at that.
Now, the bankrupt pigs do have a bit of a quandary here. It's as plain as day the market's bounce is catering to thinly capitalized suckers. The more those who are viciously exploiting a broken price discovery mechanism continue pushing the envelope, the less new money comes in. This longstanding trend now meets a moment of increasing volatility whose effect is likely to trigger a long tail event. Shorts can be squeezed only so much before risk of some unforeseen consequence becomes elevated. It won't be a melt up. Not one with any staying power anyway. So, for the moment any continuation of price discovery fraud run through Chicago likely will have only limited positive impact. Truth is garbage at the bottom of the capital structure rather appears more than just a tad overdone here. Let's call it decidedly overbought.
Panicked manipulation that largely has driven the market higher off June bottom likewise has seen disproportionate participation among advancing issues, particularly in comparison to the market's advance going into May peak. Sure looks like suckers helping the bankrupt if you ask me. Yet is capital in such short supply that, a sugarcoating of call options is out of the question? The put/call ratio continues marching to a different tune and remains entirely out of step with the market's advance. Evidently the insolvent crowd recognizes a certain vexing limit to their present, panicked manipulation, otherwise the put/call ratio likely would show some sign the market's advance has staying power. Nothing of the sort is revealed yet! Odds remain elevated something of a bloodbath is in the making.
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