Market Loses its Hopium-Induced High, Falls Four Weeks Straight

The Great Recession

Stocks posted their fourth straight weekly loss across all three headline indices this week, but more important than that they proved convincingly on Friday that the market is as fully intoxicated as I claimed in my recent article, “Hopium Floats.”

The path of indices through the day looked like a side-on view of the flight of my lunatic crow (sole heckler) just before he hits a wall at the end of his day and slides down it to the ground: 

The head-spinning delirium exhibited by stocks on Friday opened with stocks down because of overnight harsh rhetoric from China. Chinese officials uncharitably accused Trump of “playing little games” and stated, “If the U.S. doesn’t make concessions in key issues, there is little point for China to resume talks…. China’s stance has become more hard-line and it’s in no rush for a deal because the U.S. approach is extremely repellent and China has no illusions about U.S. sincerity.”

The Communist People’s Party Daily ran an editorial overnight, titled “No Power Can Stop The Chinese People From Achieving Their Dream,” which stated, “the trade war will not cripple China, it will only strengthen us as we endure it,” and “if anyone thinks the Chinese side is just bluffing, that will be the most significant misjudgment since the Korean War.” Some of this anger was churned up by the US Commerce Department’s move to blacklist Huawei from being able to buy any parts from the US. This, the Chinese said, was an act that does not show good faith in the negotiations. So, why bother?

Read the rest here: The Great Recession

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