Sunday, January 31, 2016

Stupor Bowl 2016

The Unicorn-believing Bulls will need the financial equivalent of The Catch just to avoid being skunked.
When I use the phrase Stupor Bowl, I refer not to the upcoming Super Bowl or the crazy mid-winter bicycle free-for-all in Minneapolis, but to the economic game of watching the Bear's Recession Offense crush the Unicorn-believing Bulls.
Let's follow the score here in the opening minutes of the Recession 2016 contest:
1. Sales have only one way to go: down. Touchdown Bears.
2. Profits have only one way to go: down. Touchdown Bears.
3. Stock buybacks have only one way to go: down. Touchdown Bears.
4. Global "growth" has only one way to go: down. Touchdown Bears.
5. Risk premiums have only one way to go: up. Touchdown Bears.
6. The efficacy of central bank "easing" only one way to go: down. Touchdown Bears.
This is getting stupefyingly repetitive, and the game has barely started: the Bears have racked up 42 points while the Unicorn-believing Bulls are scoreless.
The Unicorn-believing Bulls are going to need not just one Immaculate Reception, but a half-dozen miracle scores just to stay in the game. But the Bears have barely dented their playbook:
7. Government deficits have only one way to go: up.
8. The growth rate of private-sector debt has only one way to go: down.
9. The number of nations with crashing currencies has only one way to go: up.
10. The number of nations defaulting on sovereign debt has only one way to go: up.
11. The number of IPOs that quickly fall below their initial price has only one way to go: up--way up.
12. The number of margin calls to be issued to overleveraged "investors" has only one way to go: up--way up.
13. The number of junk bonds that will default has only one way to go: up--way up.
14. The number of Greater Fools willing to pay outlandishly absurd prices for homes in hot markets is plummeting; as a result, the market value of real estate globally has only one way to go: down--way down.
The Bears can fumble a few plays and still score another 42 points with ease.
The Unicorn-believing Bulls will need the financial equivalent of The Catch just to avoid being skunked:
But even that won't change the outcome--a recession that will leave all the Unicorn believers, Keynesian Cargo Cultists and the rest of the delusional mob of Bulls stupefied by their crushing defeat.
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