Business

For months we've been warning that soaring auto sales represent nothing more than the latest bubble created courtesy of low interest rates, deteriorating lending standards in the form of stretched maturities and weaker credit profiles, and an insatiable demand for auto securitizations from yield-thirsty pension funds which wall street is happily trying to meet (see here, here and here).

Of course, with subprime auto ABS issuance soaring past 2006 levels last year...

The core thread of next year's relatively downbeat "surprises" from Seabreeze Partners' Doug Kass is that the crowd is wearing Trump-colored glasses and that the single-biggest surprise is how quickly the bloom comes off the Trump flower.

In 2017 Donald Trump no longer will be seen as an invincible politician or a self-proclaimed stock market savior (see Surprise #3). Rather, he will learn, the hard way, the difficulty in governing and what Mario Cuomo meant when he said, "Campaign in poetry, govern in prose."

Dow 20k is "inevitable", it's a "no brainer" according to the business news punditry...

pic.twitter.com/hcY9afHumx

— StockCats (@StockCats) December 27, 2016

Maybe just don't play...?

It is one of Wall Street's most popular, longest-running conventions: the Santa Claus Rally has become its own self-fulfilling prophecy, leading to 11th hour gains at the end of any given calendar year, and lasting just into the new year even in the absence of good (or as per the New Normal, bad) news.

Courtesy of Oppenheimer's Ari Wald, here is a quick reminder of what it is:

Last July, a pillar of so-called "Japan Inc" crashed when Toshiba admitted it had inflated profits by a stunning $1.2 billion for no less than 7 years, with fabricated figures amounting to 30% of the company's "profits" since 2008.