Clearly many investors are tossing in the towel on stock markets.

Main Street investors haven’t really been involved with global stock markets for a long time unless they’ve just watched their retirement accounts.

Those accounts have grown over the past 7 years as their memories remain just too damn short. The markets have never been a money machine until central banks decided to manipulate prices higher. They did so until their Potemkin fantasy jig was up.

So now Central Banks from China, Japan, Europe, Fed and so forth having their “come- to- Jesus moment” (via the Urban Dictionary: “An epiphany in which one realizes the truth of a matter; a sudden, intuitive perception of or insight into the reality or essential meaning of something; coming clean and admitting failures; realizing the true weight or impact of a negative situation or fact; acknowledgment that one must get back to core values; moment of realization; an aha moment; moment of decision; moment of truth; critical moment; moment of reassessment of priorities; turning point; life-changing moment”).  

As I indicated Tuesday, this market is much different than 2008 which was a bursting of the housing bubble, but now we have a multitude of negative situations whether they be geopolitical risks; emerging markets, China, collapse on energy markets, deflation, weak personal income and savings data, outsized global public and private debt, data Middle East, outright lying by government officials regarding just about everything, earnings manipulation via stock buybacks producing income inequality and so forth. Trust is now broken and that in itself is a big deal.

President Barack Obama’s final State of the Union address came up short of the facts on several topics: (Via FactCheck.org)

1. He embellished his record on jobs, citing “more than 14 million new jobs,” without mentioning that’s only private sector jobs and only since the job losses hit bottom in February 2010.

2. Obama similarly omitted part of his presidency in boasting of nearly 900,000 manufacturing jobs “in the past six years.” Over his entire time in office, manufacturing jobs have gone down by 230,000.

3. And he said he had cut the country’s deficits by “almost three-quarters.” But that’s measured from fiscal 2009, which included some increased spending by Obama.

4. He repeated his now years-long claim of crediting the Affordable Care Act for a slowdown in health care spending, which economists have linked mainly to the economy. In fact, the growth rate jumped in 2014, when the law’s coverage provisions were implemented.

5. Obama claimed, like he did in 2014, that the U.S. has “cut carbon pollution more than any other country on Earth.” That’s true in terms of total tonnage but not in terms of percentage reductions.

6. He said that the U.S. spends “more on our military than the next eight nations combined.” That’s close enough in terms of dollars, but as a share of the nation’s economy, the U.S. is only the fourth highest of the top 15 countries.

I don’t spend any time watching any president’s State of the Union message…it’s just a political show meaning it’s scripted theatrical bullsh*t.       

The stock market cratered on Wednesday as just about every sector collapsed save some metals and government bonds.

Since we’ve been in cash since the close of 2015, and markets have gotten quickly oversold, I’ve been waiting for some rally to relieve this condition so we could short. This isn’t happening but that’s how it goes sometimes.

Market sectors moving higher included: Treasury Bonds (TLT), Investment Grade Corporate Bonds (LQD), Gold (GLD), Silver (SLV), Platinum (PPLT), Palladium (PALL) and Volatility (VIX).

Market sectors moving lower included: Everything else.

Below is the colorful Finviz heat map which displays the selling (red) and rising and inverse sectors (green).

I fully expect TPTB to be paraded around the media to claim all is well and not to worry. Although it seems some on the Fed’s team for example have admitted a policy mistake by raising interest rates.

To my mind the only mistake is keeping rates as low as they’ve been for several years at least.

Let’s see what happens.