Stockman: Orange Is The New Black (Swan)
by David Stockman via The Daily Reckoning,
ZeroHedge.com
Jun 19, 2017
Black swans are supposedly unexpected, stealthy and come of a sudden. But not this one — it is bright orange, and in your face day and night.
I refer to the Donald, of course, and the fact that he is truly the Great Disrupter.
He is not only impetuous, mercurial, undisciplined and unpredictable. But for reasons I will elaborate below, totally clueless about how to manage his presidency or cope with the circling long knives of the Deep State which are hell bent on removing him from office.
Accordingly, the single most important thing to know about the present risk environment is that it is extreme and unprecedented. In essence, the ruling elites and their mainstream media megaphones have arrogantly decided that the 2016 election was a correctable error.
And that makes the Donald the ultimate bull in an exceedingly fragile China shop — and an already badly wounded one at that.
So it is no understatement to suggest that the S&P 500 at 2440 is about as fragile as the “market” has ever been. Any pinprick could send it to a bubbly grave. It’s the mighty Orange Swan that will break the casino like never before.
The utter fragility of the latest and greatest Fed bubble could not be better represented than by this astounding fact:
During the last 5,000 trading days (20 years) Wall Street’s “fear gauge,” the VIX, has closed below 10 on just 11 occasions. And 7 of those have been during the last month!
Stated differently, in just the last 0.6% of the trading days since 1997, 65% of the ultra-low VIX readings have occurred. That’s complacency begging to be monkey-hammered.
The always astute Doug Kass said it best in his recent commentary:
Over history, as we have learned, a Minksy Moment develops when investor sentiment becomes complacent after long periods of prosperity and the data is ignored and doesn’t seem to matter anymore, as I wrote in “It’s a ‘Bohemian Rhapsody’ Market: Nothing Really Matters … to Investors.”
To this observer, the summer of 2017 feels similar to the important market highs of the first half of 2000 and the last half of 2007.
The Rest…HERE
