January 5: Daily Contrarian Reads

10 Very Crowded Trades Accounted For 35% of the S&P 500’s 2017 Gain

Tech soared by 38% in 2017. As the largest component of the market (24%), the sector contributed nearly 40% of the overall index gain. FAAMG, five of the six largest stocks in the index, collectively accounted for 25% of the S&P 500 index return in 2017.

This Time Is Different—Markets Are No Longer A Mechanism for Price Discovery

…… It’s not different because people really got it right this time (in ways they missed every other time) about some new technology that’s going to Change The World! Electric cars, cryptocurrency, AI and automation, these may all be fabulous things, and they may well prove to be game-changers for productivity and returns on capital down the line, but if you think any of those things explain current valuations, you’re nuts. You’re also wrong. It’s different because financial markets are no longer a mechanism for price discovery and the pricing of risk of capital allocation decisions.

The NYT Rides To Mueller’s Rescue

As James Comey’s FBI and Special Counsel Robert Mueller have, for 18 months, failed to prove Donald Trump’s “collusion” with the Kremlin, what was it, in mid-2016, that justified starting this investigation?

Chart Warnings—Huge Accident Just Ahead

People can make up their own minds about them, but rest assured all these charts are data driven and they highlight a key concern of mine from 2017 and one that’s now become even further amplified into 2018: These markets are technically completely extended, uncorrected and at high risk of an ‘accident’.

Bitcoin Fever to Burn Out in “Spectacular Crash,” David Stockman Warns

David Stockman, President Ronald Reagan’s former director of the Office of Management and a relentless Wall Street bear, is warning investors that the cryptocurrency boom will end disastrously. “It’s basically a class of really stupid speculators who have convinced themselves that trees grow to the sky,” he told CNBC’s “Futures Now” last week. “It will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson.”

Still MIA—-Evidence Of Russian Meddling In 2016 Election

A changing-places moment brought about by Russia-gate is that liberals who are usually more skeptical of U.S. intelligence agencies, especially their evidence-free claims, now question the patriotism of Americans who insist that the intelligence community supply proof to support the dangerous claims about Russian ‘hacking” of Democratic emails especially when some veteran U.S. government experts say the data would be easily available if the Russians indeed were guilty.

Bricks-And-Mortar Meltdown Reaches Movie Theaters

The number of actual tickets sold in US movie theaters in 2017 fell 3.6% year-over-year to 1.25 billion tickets, according to The Numbers. That’s down 21% from “Peak Ticket Sales” in 2002, when box offices sold 1.58 billion tickets. In fact, the number of tickets sold in 2017 was the lowest since 1995.

Imperial Washington Is Running The Same Script Against Iran As It Did On Libya And Syria

With what would be perfect comedic timing if it weren’t so frightening, Iran erupted in protests which have been ongoing for the last four days, and the western empire is suddenly expressing deep, bipartisan concern about the human rights of those protesters. So we all know what this song and dance is code for. Any evil can be justified in the name of “human rights”…..This is all coming off the back of the nonstop CIA/CNN narrative being advanced that Iran is a top perpetrator of state-sponsored terrorism, which is just plain false.

Forecast 2018 — What Could Possibly Go Wrong?

If you take your cues from Consensus Trance Central — the cable news networks, The New York Times, WashPost, and HuffPo — Trump is all that ails this foundering empire. Well, Trump and Russia, since the Golden Golem of Greatness is in league with Vladimir Putin to loot the world, or something like that.

Will 2018 Be The Year That Interest Rate Hikes Crush Auto Sales?

We’ve long argued that elevated auto sales in the U.S. are nothing more than yet another debt bubble resulting from perpetually low interest rates and a gradual loosening of underwriting standards, primarily coming in the form of longer loan maturities.  Now, as Bloomberg points out today, more and more wall street analysts are suddenly starting to question whether 2018 might be the year that interest rate hikes from the Fed finally crush auto sales.