Things are broken all around, but they are also patched up so fast and so big that we are led to believe there is a kind of normality settling in.
Mind you, people are even starting to book their 2021 summer holiday as if it is a necessity right now.
Yet, I feel that we are just in the eye of the cyclone, a place which feels sheltered from recent devastation, but a place which only exists for a few moments. A few more days, weeks or months. Still, when we get out of the eye, we hit devastation again. It cannot be avoided, can it?
Ahhh, this is so annoying!!! Yes, two weeks ago I wrote that it's time to get 100% positive, and get the uplift as the Fed is pumping the financial assets in the US, with worldwide repercussions. Yes, it's party time again, a party like this one we got at the turn of the Millenium. Party! Party! Everybody is joining, and as a company got even valued $2 trillion last week, why would you stay on the side? Party! Party! 100% positive!
You do not need to trade to take an interest in this. Let me tell you that this battle for avoiding the upcoming recession will have repercussions into your daily lives for the next decade. If the Central Banks and powerful Kings-aka-Governments win, there will be asset inflation for years to come making the rich richer and the middle class will have the priviledge of having job security in exchange of not being able to afford the cost of living (mostly the cost of buying a home). If they loose... there will be asset deflation for at least a couple of years making everybody poorer, except the 0.01% few. In any case, the game is rigged, but in any case... you are in the game, so everyday, you have to play your hand.
This past week was everything about invalidation of risky events. No deal Brexit? Invalidated... Italians having to go back to the polling stations and elect a new far right government? Well, invalidated too... Chinese trade war? Invalidated, at least for now... SPX going down the hole. Yes you guessed it. Another one which got invalidated!
One one side, you have the powerful Central Bankers who print money like there is no future consequence. In 8 years at the head of the European Central Bank, Mario Draghi never ever raised interest rates, having for consequence the abnormal 30 years german bond paying negative 0.11%. Yes, you have to pay the German state to lend them money over 30 years. Or the negative mortgage in Denmark as we saw recently. On another side, you have the powerful Kings of their competing empires...