{"id":50987,"date":"2020-02-06T09:25:49","date_gmt":"2020-02-06T14:25:49","guid":{"rendered":"https:\/\/olduvai.ca\/?p=50987"},"modified":"2020-02-06T09:25:52","modified_gmt":"2020-02-06T14:25:52","slug":"state-of-denial","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=50987","title":{"rendered":"State of Denial"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/northmantrader.com\/2020\/02\/06\/state-of-denial\/\">State of Denial<\/a><\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright\"><a href=\"https:\/\/i2.wp.com\/northmantrader.com\/wp-content\/uploads\/2020\/02\/denial.png?ssl=1\"><img decoding=\"async\" src=\"https:\/\/i2.wp.com\/northmantrader.com\/wp-content\/uploads\/2020\/02\/denial.png?resize=171%2C93&amp;ssl=1\" alt=\"\" class=\"wp-image-76039\"\/><\/a><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Once again investors are made to believe that nothing matters. Only 2 trading days after Friday\u2019s sell off $NDX made new all time history highs. Only 3 days after Friday\u2019s sell-off $SPX made a new all time closing high. Only 4 days after Friday\u2019s sell off $DJIA, $SPX and $NDX make new all time human history highs in premarket. Fours day, four up gaps, all unfilled at the time of this writing. The market of the overnight gap ups.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Why? Because the economic impact of the coronavirus is over or contained? Of course not, it\u2019s far from any of that. Shutdowns persist, warnings of individual companies are mounting i.e.&nbsp;<a href=\"https:\/\/www.cnbc.com\/2020\/02\/05\/reuters-america-update-1-tesla-tumbles-as-coronavirus-weighs-on-shanghai-factory.html\"><strong>$TSLA<\/strong><\/a>, tumbling a day after the&nbsp;<a href=\"https:\/\/northmantrader.com\/2020\/02\/04\/buy-panic-tsla\/\"><strong>technical warning issued<\/strong><\/a>, &nbsp;global economic growth estimates are coming down and with them invariably take downs in earnings estimates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What do markets do? Make new all time highs, back on the multiple expansion game from 2019 when no slowdown in earnings mattered as the liquidity injections from our central bank overlords overrode everything.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This week the PBOC injected liquidity, the Fed kept&nbsp;<strong>f<a href=\"https:\/\/apps.newyorkfed.org\/markets\/autorates\/tomo-results-display?SHOWMORE=TRUE&amp;startDate=01\/01\/2000&amp;enddate=01\/01\/2000\">lushing repo liquidity into the system<\/a><\/strong>, and of course a continued buying of treasure bills.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And so markets continue on their path of never pricing in any bad news and continue to disconnect farther and farther from the underlying size of the global economy no matter the ongoing data:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/i2.wp.com\/northmantrader.com\/wp-content\/uploads\/2020\/02\/germany.jpg?ssl=1\"><img decoding=\"async\" src=\"https:\/\/i2.wp.com\/northmantrader.com\/wp-content\/uploads\/2020\/02\/germany.jpg?resize=520%2C292&amp;ssl=1\" alt=\"\" class=\"wp-image-76020\"\/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Baltic Dry Index:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/i2.wp.com\/northmantrader.com\/wp-content\/uploads\/2020\/02\/Baltic-Dry-Index.png?ssl=1\"><img decoding=\"async\" src=\"https:\/\/i2.wp.com\/northmantrader.com\/wp-content\/uploads\/2020\/02\/Baltic-Dry-Index.png?resize=639%2C281&amp;ssl=1\" alt=\"\" class=\"wp-image-76056\"\/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">But there are no bubbles central bankers tell us. Don\u2019t insult our intelligence I say. Especially since they perfectly well know that policies and words are closely followed by markets and are market impacting:<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/twitter.com\/ecb\"><img decoding=\"async\" src=\"https:\/\/pbs.twimg.com\/profile_images\/1059460111419301889\/Hfx6vaPS_normal.jpg\" alt=\"\"\/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/twitter.com\/ecb\"><strong><\/strong><strong>\u2714<\/strong><\/a><a href=\"https:\/\/twitter.com\/ecb\/status\/1225335455706730496\"><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lagarde: Traditionally, as central bankers we have been more comfortable speaking to experts and markets than to the general public. Markets closely follow what we do and what we say, and surveys and studies find that we are well understood by them.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>State of Denial Once again investors are made to believe that nothing matters. Only 2 trading days after Friday\u2019s sell off $NDX made new all time history highs. Only 3 days after Friday\u2019s sell-off $SPX made a new all time closing high. Only 4 days after Friday\u2019s sell off $DJIA, $SPX and $NDX make new [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1330,303,7542,2914,6934,23808],"class_list":["post-50987","post","type-post","status-publish","format-standard","hentry","category-economics","tag-denial","tag-fed","tag-northman-trader","tag-pboc","tag-repo-market","tag-sven-henrich"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50987"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50987\/revisions"}],"predecessor-version":[{"id":50988,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50987\/revisions\/50988"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}