The Economy

Yup. Apparent for the last 2 to 3 weeks that this has been largely retail and FOMO driven.

Bloomberg - Are you a robot?

It got really absurd a few days ago, when you had bankrupt companies surging. On Monday, Chesapeake Energy, Hertz , Whiting Petroleum and Valaris all more than doubled. JC Penney was up more than 96 percent.

Hertz, Chesapeake Energy Leading The 'Bankruptcy Bubble'

This is what the Fed created. Anyone valuing anything on a fundamental basis got short-squeezed out of their positions. Up is down, down is up.

Warren Buffett is an idjit in this an environment, but every actual idiot is a genius.

 

Jim Bianco spot on

Bloomberg - Are you a robot?

 

Throughout Trump's presidency, whenever markets start wavering, he either tweets something with a cryptic promise (he did this when his trade war was causing weakness) or they would send out someone to soothe markets and talk them back up.

In the past it was Larry Kudlow (after he came aboard). During the sell off in March, it was usually Steve Mnuchin.

This morning, like clockwork, Mnuchin dialed into CNBC, and started with what he thought were the code words for the market, including saying that they are going to pump another trillion dollars into the US economy over the next month.

The equity market isn't buying it this time.

The Fed is entirely driving the boat, and has been for years (they were when Mnuchin thought he was talking things back up -- it was all the asset buying the Fed started to do with interest rates pinned at zero), and they managed to reflate the biggest bubble ever with what they have done over the last 2 months (destroying the dollar), this time sucking in retail traders who are using their "stimulus" checks like poker chips. It has gotten beyond absurd, with equity valuations completely disconnected from the fundamentals that would drive them in a free market and making them entirely about how much money the Fed is essentially creating out of thin air and pumping in. Things have gotten to such a ridiculous place, though, and on a technical basis they were so overbought, that the Fed meeting that ended yesterday, and Jay Powell flapping his gums afterward (even though he essentially promised to completely blow up the dollar and take this even farther) seemed like a good excuse for some smarter money to try to cause a little pain for the monkeys who have been piling in.