After Nearly Two Years Of Searching, TrimTabs Still Can't Figure Out Who Is Buying Stocks

Tyler Durden's picture




 
0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 12/23/2010 - 19:10 | 827141 High Plains Drifter
High Plains Drifter's picture

Yep, Biderman sounded like Tyler Durden today. Either that or he has been reading ZH.

Thu, 12/23/2010 - 19:27 | 827168 cougar_w
cougar_w's picture

You ever notice how you never see those guys in the same room together?

Just say'n

Thu, 12/23/2010 - 19:53 | 827208 Cheesy Bastard
Cheesy Bastard's picture

Biderman doesn't look like Brad Pitt, however.

Thu, 12/23/2010 - 21:30 | 827342 hedgeless_horseman
hedgeless_horseman's picture

I am Jack's overdeveloped sense of holiday cheer.

Merry Christmas, everyone, and Happy New Year!  This past one sure has been interesting. 

Call someone you should have forgiven a long time ago.

Don't drive drunk.

And may the peace of the Lord be always with you!

Thu, 12/23/2010 - 21:35 | 827369 Cheesy Bastard
Cheesy Bastard's picture

And may the peace of the Lord be always with you!

+1

Thu, 12/23/2010 - 22:15 | 827422 jeff montanye
jeff montanye's picture

nice talk.

Fri, 12/24/2010 - 18:26 | 828674 Malcolm Tucker
Malcolm Tucker's picture

Maybe a Fed or Treasury employee would catch the PPT in action and upload a video using...The Patriot APP:

http://fedupmontrealer.blogspot.com/2010/12/patriot-app.html

unbelievable

Thu, 12/23/2010 - 23:24 | 827502 tahoebumsmith
tahoebumsmith's picture

youch..is your head twisting around at warp speed? Kind of harsh even for the roughest of us.

Fri, 12/24/2010 - 00:30 | 827562 iDealMeat
iDealMeat's picture

I junked you with pride..  Although I'm godless and lord-less I still think you should change your name to:

NuterSpade

End your genetical contribution to humanity..

good riddance..

Fri, 12/24/2010 - 00:46 | 827576 Amish Hacker
Amish Hacker's picture

Kindly remember: It's nice to be important, but it's more important to be nice.

Fri, 12/24/2010 - 01:15 | 827600 vxpatel
vxpatel's picture

the peace of the lord is within, as is the kingdom of heaven.

 

I'm just say'in....

Fri, 12/24/2010 - 03:28 | 827713 revenue_anticip...
revenue_anticipation_believer's picture

VELO new to ZH i see...eh, he he ha ha

Fri, 12/24/2010 - 05:03 | 827760 Problem Is
Problem Is's picture

Rude Newbie With a Mouth a Flappin'... <JUNK>
5th Rule is... you have to shut up the first 26 weeks or put something in that pie hole...

Thu, 12/23/2010 - 22:17 | 827425 Aghast in Midlothian
Aghast in Midlothian's picture

And also with you.

Thu, 12/23/2010 - 22:43 | 827453 Katharotes
Katharotes's picture

@hedgeless

amen

Thu, 12/23/2010 - 20:00 | 827222 knukles
knukles's picture

.... in the presence of Marla. 

Aaaaaaaargggggggggaaaaaaaaaaaaaahhhhhh.

No.  NFW.  Maria is Not Marla.  Tell me it ain't so, Joe.

Thu, 12/23/2010 - 20:30 | 827251 El Hosel
El Hosel's picture

  "We can't figure out who is buying"

  Its the "New Deal", selling makes the market go up.

    WTF? He knows who is buying.

Thu, 12/23/2010 - 20:26 | 827253 unwashedmass
unwashedmass's picture

well after this, we're not going to see Chuck again until Christmas 2011.

Thu, 12/23/2010 - 20:30 | 827260 High Plains Drifter
High Plains Drifter's picture

She kept trying to put the old CNBC spin on things, as usual.

Thu, 12/23/2010 - 21:01 | 827310 dark pools of soros
dark pools of soros's picture

she always keeps her eye on where the growth is

Thu, 12/23/2010 - 23:39 | 827521 Cursive
Cursive's picture

she always keeps her eye on where the growth is

Lulz.  Even at 15,000 feet in a compresurized compartment.

Thu, 12/23/2010 - 21:24 | 827348 Thomas
Thomas's picture

Yeah. She simply refuses to respond to his assertions, instead chosing to act very matter-of-fact.

Thu, 12/23/2010 - 21:42 | 827377 Bay of Pigs
Bay of Pigs's picture

Why not just say she's as dumb as a bag of hammers?

Thu, 12/23/2010 - 22:34 | 827448 fellatio is not...
fellatio is not fattening's picture

As usual anytime he said something provocative she just made some sucking sound and said "uh yah yah" she needs to lose that damn retainer "suck suck um yah yah"  why doesn't she ask "Charles, do you truly believe the gov't the Fed is buying stocks?" but nope, uh yah yah

Thu, 12/23/2010 - 22:42 | 827451 Cheesy Bastard
Cheesy Bastard's picture

Your name is "Fellatio is not fattening".  I have been called a ""cunning linguist".  Yes, it rolls right off the tongue.  "Cunning linguist".  I usually get junked by those who don't get "cunning linguist".  I can understand that people get frustrated if they don't get it.  Yeah, I know, too bad I am taken....

Thu, 12/23/2010 - 22:58 | 827463 VeloSpade
VeloSpade's picture

So if I understand correctly, you like eating cunt?

Thu, 12/23/2010 - 23:13 | 827471 Cheesy Bastard
Cheesy Bastard's picture

Which answer would make you respect me more in the morning, yes or no?  (7 replies to go, sweetie,  unless you lift the restraining order...)

edit:  Ok, it's Christmas, so if you insist, I will kiss you under the cameltoe...

Fri, 12/24/2010 - 12:58 | 828059 Fidel Sarcastro
Fidel Sarcastro's picture

"edit:  Ok, it's Christmas, so if you insist, I will kiss you under the cameltoe..."

LMFAO


Fri, 12/24/2010 - 06:08 | 827770 Ted K
Ted K's picture

The truth hurts friend.  Remember this is the skank who asked Congressman Anthony Weiner (roughly age 49) why wasn't he on Medicare???  And the interview with her mouth wide open for Thain's tool (by tool, of course I mean Thain's propaganda) as he told her his bank was on solid ground and very solvent. "REALLY!!!"


Thu, 12/23/2010 - 22:46 | 827454 mr66
mr66's picture

I'm staying out and waiting for the reset

Thu, 12/23/2010 - 19:14 | 827146 King_of_simpletons
King_of_simpletons's picture

Skynet. Pure and simple, just coz the odometer is running doesn't mean the wheels are turning too.

Thu, 12/23/2010 - 21:21 | 827344 New_Meat
New_Meat's picture

... er ... Stuxnet

Thu, 12/23/2010 - 19:14 | 827148 bogey4
bogey4's picture

I must have been out the day the government admitted to "rigging the market."

Thu, 12/23/2010 - 20:10 | 827229 knukles
knukles's picture

Yeah.  Where'd that shit come from?  The Bernank, Timmah, none of them's said so outright.  Charlie says so and Maria agrees, so like everybody do get it, Lordie, Lordie, and if MSNutbagM say so.....  But, ain't been no "Official" Fed or Treasury announcement about an "Official" equity account, let alone an "Official" gold or even, and less likely, an "Official" silver account.
(JP's silver is probably "Unofficial" parallelling the "official" gold programs, as it would explain the DoJ, scrambling offshore, etc.)

Thu, 12/23/2010 - 21:02 | 827309 Red Neck Repugnicant
Red Neck Repugnicant's picture

Question for anyone...

Please explain something to me:

How does QE2 inflate the stock market, and do you have any proof to support your claim?

In November, when QE2 was implemented, there were over $1 Trillion in excess reserves just sitting at the Federal Reserve by member banks. Some of this is real cash, some is just digits on a screen.   

With the commencement of QE2, the Fed has transferred $75 billion ($75B/month for 8 months) from savings accounts to checking accounts of the member banks. This is NOT money printing - it is simply a digital accounting gimmick on a ledger, where digits are moved from the savings side (bonds) to the checking side (digital cash) of a ledger. 

Bonds are nearly identical to cash, except for the interest they yield.  Cash sits in a checking account and earns X% interest, while bonds sit in savings accounts and earn X(plus a little more)% interest.  Those banks are in no different position financially (with exception of minimal interest differences) to invest money into the stock market than they were before QE2.  Had the banks wanted to exchange their bonds for cash, and invest that cash into the market, they could have instantaneously.  In this example, cash and bonds are identical.

Here's a real world example that mirrors what is happening to those checking/savings accounts at the Fed:

Imagine you have $1 million dollars in cash sitting at a bank, and you currently have no use for it. Now imagine that you convert your house into a HELOC, thereby converting your home into $100,000 of available credit.  Your wealth has not increased - only your personal accounting ledger has changed. And now you have $1.1M in cash/credit that you aren't using.   

Having said this, please explain how QE2 inflates the stock market, or please explain how my summary is wrong. The market has been moving up for 1 year 9 months.  Why is the last 30 days any different, and how did QE2 affect the last 30 days of market activity?

Thu, 12/23/2010 - 21:16 | 827330 Cheesy Bastard
Cheesy Bastard's picture

I admit this is a simplistic example, but it gets to the crux of your question.  Qe (whatever) leaves the banks flush with cash.  Money borrowed at zero interest can be invested short term (with even a small yield) in equities.  Instant profits, no risk.  They trade to each other, back and forth.  They can't lend because no one wants to borrow, and even if there were, there are no standards left for lending.  Risk.

If I could prove it, it wouldn't work anymore.  I can't prove gravity exists, either. 

Thu, 12/23/2010 - 21:46 | 827378 Red Neck Repugnicant
Red Neck Repugnicant's picture

Money borrowed at zero interest can be invested short term (with even a small yield) in equities.  Instant profits, no risk.

 

If the banks wanted to implement that strategy, they could have before QE2 - QE2 has no influence on that strategy. Their bonds could have been exchanged for cash instantaneously in the open market. At any point prior to QE2, those banks could have taken their bonds, exchanged them for cash in the open market, and used that cash to buy equities for the short term, as you say.

Qe (whatever) leaves the banks flush with cash.

Before QE2, banks were already flush with cash.  There were over $1 trillion in reserves at the Fed in November. 


Thu, 12/23/2010 - 22:11 | 827417 Cheesy Bastard
Cheesy Bastard's picture

If the banks wanted to implement that strategy, they could have before QE2

Yep.  It was called "tarp" way back then.

Before QE2, banks were already flush with cash

Nope.  Flushed with debt.  Different

Thu, 12/23/2010 - 22:17 | 827427 packman
packman's picture

At any point prior to QE2, those banks could have taken their bonds, exchanged them for cash in the open market, and used that cash to buy equities for the short term, as you say.

I'm a pure layman so this is conjecture - but don't those bonds apply towards banks' capital reserve ratios?  And equities can't be used as such can they?  Thus in order to do such an exchanged (bonds->cash->equities) they would have to call a ton of loans (i.e. pull money out of the economy) in order to maintain their reserve ratios, would they not?

Bottom line is that even Ben has stated that QE2 is essentially printing money.  Why in the world would he say so if it wasn't true?  If anything he would make statements to the opposite effect.

 

 

Fri, 12/24/2010 - 10:41 | 827901 Red Neck Repugnicant
Red Neck Repugnicant's picture

@packman

You are spreading wrong information, which is understandable because nearly everyone in the comments section here is making up facts.  Bernanke NEVER said that QE2 was "essentially money printing."

Everyone is making wild conjectures based on wrong information.

Bernanke's exact words were:

“What the purchases do… is… if you think of the Fed’s balance sheet, when we buy securities, on the asset side of the balance sheet, we get the Treasury securities, or in the previous episode, mortgage-backed securities. On the liability side of the balance sheet, to balance that, we create reserves in the banking system. Now, what these reserves are is essentially deposits that commercial banks hold with the Fed, so sometimes you hear the Fed is printing money, that’s not happening, the amount of cash in circulation is not changing. What’s happening is that banks are holding more and more reserves with the Fed.Now the question is what happens the economy starts to grow quickly and it’s time to pull back the monetary policy accommodation. There are several tools that we have”

Fri, 12/24/2010 - 12:41 | 828031 The LD
The LD's picture

 

From March 2009:

 

"You've been printing money?" Pelley asked.

"Well, effectively," Bernanke said.

 

So how is it that QE1 effectively printing money, and QE2 is not? You are being disingenuous. 

Fri, 12/24/2010 - 14:16 | 828176 Red Neck Repugnicant
Red Neck Repugnicant's picture

It is really important that you (and others on this forum) understand something:

So far, both QE1 and QE2 are (for the most part) key strokes on a keyboard - not the work of the printing press.  I truly don't think you guys understand the mechanics of quantitative easing and how this money is "created" and accounted for. 

It was widely assumed that QE1 would lead to money printing (and perhaps it has, to some small degree, but not what you guys assume), as Bernanke thought banks would ask to "cash in" their new digital/binary "cash" balances held at the Fed. Bernanke hoped that banks would take the trillion or so dollars, and begin to diffuse it through the economy in whatever manner they felt would increase returns, such as loaning money to businesses and consumers.  No doubt about it, he was hoping this would increase the velocity of money and breathe some life into the economy.   

Here's the problem:  Banks did NOT ask to "cash in" their digital/binary balances.  Surprisingly, the banks are just letting the reserves accumulate, rather than asking for tangible cash to lend.  For the most part, the digital/binary cash from QE1 still remains nothing more than a digit on a screen, a balance on a ledger. That is why QE1 did nothing for the economy, and did not lead to money printing as Bernanke had thought. Money is NOT being diffused through the economy as loans or investments. For all practical conversations, it's just a digit on a screen.

Under normal times, reserves held by the Fed are typically around $10 - $15 billion, or so.  As of November, reserves are around $1 TRILLION.  That "money" just exists as a digit on a screen - not moving, not doing a damn thing except earning .25% interest. 

QE2 is doing nothing for the banks, except adding to those excess reserves that the banks don't need right now. The function of QE2 is to allow our Treasury to borrow money for free (interest earned by treasuries held by the Fed are rebated back to the Treasury at year end), and to pick up the lost demand for our bonds, now that China seems more focused on buying hard assets rather than our debt.  There is NO money being added to circulation in QE2; the money that the Treasury gets for its bonds was already paid by the banks before the Fed enters into the picture.  

The threat to inflation will occur when banks begin to "cash in" these trillion dollars worth of accounts at the Fed.  As soon as the economy turns, the banks will ask for "real cash" to loan into the economy, and those digital/binary accounts will be turned into real paper currency.  As cash is printed and velocity increases, there will be more cash in the system to chase goods and services.  But Bernanke can adjust that - in 15 minutes, if he wishes.  He can simply raise rates and raise reserve requirements which will shut the spigot.  

As a side note, it is amazingly funny how the 23 Republicans wait until QE1 is done to pen their open letter criticizing the Fed.  Once the banks have gotten all the money they need (and more), THEN the Republicans start firing off angry letters into the newspapers - hilarious and pathetic.  How convenient that they start conversations about inflation, AFTER the banks got all the money they need and have a trillion in reserves they can't use.  Apparently, inflation is only a concern if the banks can't benefit from it.  Once banks can't benefit, they pull out their magical puppet strings, attach them to their favorite Republican talking head, put them on soapboxes and turn on the microphones - the Kabuki theatre is now open for business.    

lol

 

 

Sat, 12/25/2010 - 02:28 | 829333 Chuck Bone
Chuck Bone's picture

E2 is doing nothing for the banks, except adding to those excess reserves that the banks don't need right now. The function of QE2 is to allow our Treasury to borrow money for free (interest earned by treasuries held by the Fed are rebated back to the Treasury at year end), and to pick up the lost demand for our bonds, now that China seems more focused on buying hard assets rather than our debt.

That is a benefit of course.  Not only is the Federal Reserve able to temporarily bail out a completely debt-ridden and unfunded liability filled state by buying its bonds when people are finally realizing that maybe this whole system of tons of sovereign credit just isn't sustainable. Your analysis however neglects to take into account just how absolutely and utterly insolvent the large banking institutions are. Their balance sheets are a complete mess, just behemoths full of extremely complex derivatives and toxic residential debt (which by the way still hasn't finished adjusting further into the toilet--we still have a large amount of option ARMs that have yet to reset) which they can only deal with by propping up the asset side of their balance sheet through these excess reserves and hiding the true losses by changing the accounting rules.

Then there is the fact that the ONE group which runs the Fed (which is the entity that is really supposed to be keeping these BANKrupt institutions in line!) is the same group that works for these banks! So of course they are going to claim that the worst thing in the world is for the price of this debt to clear, that everything is fine and they didn't all just collective take on tons of risk and now they are doing everything they can to cover their asses. A normal market would PUNISH this behavior, a non-complicit state would go after these fuckers for the sheer fraud, but instead everyone in charge wins. Politicians get elected, and the bankers stay rich and keep getting bonuses while the leverage increasingly is transferred to the state.

Then of course there is the fraud that led to the creation of all this debt in the first place, through both easy lending courtesy of the monetary policy from this same institution and nobody asking questions about just how they were packing all these notes into trusts and selling it while knowing full well it was full of garbage but just doing a half assed statistical analysis and lying to ratings agencies and investors, hiding the sheer garbage within.

It's just a story group of people who by actively managing the economy by not allowing their malinvestment and risk-taking and FRAUD to go unpunished just benefit while the rest of us see everything we must buy increase increase in price, and wait for the excess reserve moneybomb to finally hit the economy. Meanwhile the masses are placated by handouts, financed by the increasingly leveraged state. 

It's a simply unsustainable system, and it will end poorly. It's like yo have a hole in your boat and you continually keep bailing it out at a slower rate than the water is coming in, rather than plugging the hole. Ben likes to pretend that when the inflation hits he'll be the one raising the rates, but time and time again the invisible hand proves it's really in charge because interests rates will rise and that's when you know the shit has hit the fan.

Sat, 12/25/2010 - 21:45 | 830096 chopper read
chopper read's picture

A normal market would PUNISH this behavior, a non-complicit state would go after these fuckers for the sheer fraud, but instead everyone in charge wins. Politicians get elected, and the bankers stay rich and keep getting bonuses while the leverage increasingly is transferred to the state.

 


It's just a story group of people who by actively managing the economy by not allowing their malinvestment and risk-taking and FRAUD to go unpunished just benefit while the rest of us see everything we must buy increase increase in price, and wait for the excess reserve moneybomb to finally hit the economy. Meanwhile the masses are placated by handouts, financed by the increasingly leveraged state.

 

It's a simply unsustainable system, and it will end poorly. It's like yo have a hole in your boat and you continually keep bailing it out at a slower rate than the water is coming in, rather than plugging the hole. Ben likes to pretend that when the inflation hits he'll be the one raising the rates, but time and time again the invisible hand proves it's really in charge because interests rates will rise and that's when you know the shit has hit the fan.


well put, Chuck Bone.  well put, indeed.  

Fri, 12/24/2010 - 16:11 | 828398 traderjoe
traderjoe's picture

RNR, I'll take a stab at responding to your query, which I felt was a legitimate comment, but the original might get junked into oblivion...

I do believe QE2 increases the 'money supply', but clearly it depends upon how you define that term. 

Let's start from a zero state: Fed balance sheet with zero assets, banks own $100 billion in UST's. In QE2, the Fed purchases the $100 billion in UST's from the banks with new Federal Reserve Notes. So, the Fed balance sheet now has $100 billion in UST's as assets (and a liability of $100 billion for FRN's). The bank's balance sheets are $100 billion in cash, instead of UST's. 

So, the broadly defined money supply, the Fed's assets plus the bank's assets has gone up by the $100 billion. You are partially right in the sense that if the Fed never re-deployed that additional $100 billion (stored in UST's), less-broad measures of the money supply would be unchanged. 

However, if the banks chose not to replace the sold UST's with new UST's, this redeployed capital can flow into stocks, commodities, etc. It may have been impossible for banks, CB's etc. to unload (and the Treasury to sell) 'excess' UST's without the Fed purchasing them. 

So, yes, I believe the all-encompassing 'money supply' has increased. And the QE flows to the bank are not being used to re-purchase UST's. Finally, I think the Fed and the main PD's are gaming the market higher in ways that are not immediately apparent at this time. 


Thu, 12/23/2010 - 23:45 | 827528 Cursive
Cursive's picture

@CheesyBastard

I can't prove gravity exists, either. 

I'll take that bet.  We could test it on a couple of bankers in a lower Manhatten high rise.

Thu, 12/23/2010 - 23:59 | 827547 Cheesy Bastard
Cheesy Bastard's picture

+qe3. Keep testing the theory all day and all night.  Excellent.

Thu, 12/23/2010 - 21:19 | 827340 MichaelNY
MichaelNY's picture

That fake money's gotta buy something...both to earn its keep and to earn its keepers a keep.  Whaddya suppose it's gonne buy?  BRICs and bricks, and equities, and bonds too.

Thu, 12/23/2010 - 21:32 | 827366 Red Neck Repugnicant
Red Neck Repugnicant's picture

No.  It doesn't need to buy anything.  It can just sit there earning interest, as it was before.  

First, it sat there earning very little interest as a bond.  Now, it sits there earning slightly less interest as binary cash.

Assume you have $1,000,000 cash in a briefcase, and don't use it.  Now you cash a bond for $75,000 and put that cash in your briefcase.  Do you have to use it?  No.  Now you have $1,075,000 cash in a briefcase that you aren't using.  

 

 

Do NOT follow this link or you will be banned from the site!