Charles Biderman On How The Fed Continues To Rig The Market And Why There Will Be A QE 3...And 4

Tyler Durden's picture

The last time Charles Biderman appeared on CNBC, he was carted onstage (and promptly off) in the late hours before Christmas Eve, when it was virtually assured nobody would hear the self-evident truths out of his mouth such as this one: "individuals have been selling, companies are net selling, insider
selling and new offerings are swamping any buyback and any cash M&A
activity since QE 2 was announced. Pension funds and hedge funds don't
really have that much cash to invest. So what nobody's asking is what
happens when QE 2 stops: if the only buyer is the Fed, and the Fed stops buying, I don't know what is going to happen...When
I was on your show a year ago I was saying the same thing: we can't
figure out who is doing the buying it has to be the government, and
people said I was nuts. Now the government is admitting it is rigging the market." Now that the great muni scare forced retail to take proceeds from muni liquidations and invest in stocks just as the market topped out, CNBC brought Biderman on again, hoping to get something, anything, bullish out of the flow of funds expert. Wrong. "In December of 2009 received a lot of ridicule for saying that the Fed is rigging the market which as everybody is well aware." As for the "sustainable economic recovery" i.e., what happens to Quantitative Easing: "They probably will end for a while, we think there is going to be a QE3 and 4, or until the market says: "No Mas - we are not going to believe this game the Fed is playing... The Fed is printing over $100 billion a month to buy other assets and pay bills, and economic growth is picking up at a $200 billion annual rate. This is very inefficient method of boosting the economy, and then how do we repay these trillions that have been created out of thing air in the future." At which point the producer "screams get him off my show."

Oddly enough, this form of market manipulation by the Fed is precisely what Zero Hedge has been claiming since day one, prompting our legacy media followers to brand us on occasion as "conspiratorial." Ironically, it is precisely this kind of "conspiracy theorism" that is ultimately proven to be nothing but fact in this bizarro banana republic, now that the wheels of the Ponzi system are finally coming undone (see the recent deranged ramblings of one Bill Gross for more). Yet it hasn't stopped once upon a time blogger, CNBC regular and now Bloomberg columnist, Paul Kedrosky to declare from atop his status quo-worshipping altar that Zero Hedge is "too conspiratorial and too much of an intellectual monoculture." That's ok Paul, we realize that mainstream bashing of Zero Hedge in public, while fervently copying, pasting and/or paraphrasing from it, is all the rage for our less than sophisticated, but admittedly very, very polycultured, imitators. And yes, just like Biderman, we are happy to be called "conspiratorial" if that is the MSM's codeword for being proven right within 3 to 6 months... and actually having an original thought.

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reader2010's picture

The Grand Ponzi can't be stopped because debt is money and cash is trash!

Herd Redirection Committee's picture

I've been saying it for the last two years, its like a slow motion train crash.   We are already off the rails, but we are currently flying through the air at 100kmp/h, thinking the train is still on the tracks!

Check out the latest from the Capital Research Institute: "The King is Dead. Long Live the (new) King!"

What is happening right now in the world of finance can best be understood from the perspective of… succession planning? Thats right. What is underway right now has a lot in common with what used to happen every time a King’s reign was approaching its end, with the King on his death bed. Superficially everyone would still be following the King’s orders and scrambling around, summoning the finest physicians (somehow we got Timothy Geithner and Ben Bernanke), but just below the surface everyone knows the score, and is preparing for the King’s inevitable death. This leads to a tremendous amount of posturing and scheming, as everyone gets behind their preferred candidate to become the new King.

This is exactly what we witness in the world of international finance at the moment.

Bob's picture

Every five years or so I revisit Dr. Strangelove and today was the day.  Chairsatan is a fine name for the Bernank, but if he ain't Dr. Strangelove as well nobody ever could be. 

The rest of us, those who are paying attention and in the know, are just like the folks that watched Jack Ripper's breakdown.  I suppose he is a good proxy for Wall Street. 

But watch Dr. Strangelove working to trigger the Doomsday Machine. 

Eerie, that. 

Dr. Porkchop's picture

QE2 is really the Chinese communist prevert plot to sap the vital fluids of the American people!

jedimarkus's picture

My God, not the precious bodily fluids...

66Sexy's picture

I Think they will HOLD OFF on QE3.... just to fuck with the markets and see how loud it sqeals...

Myshkin's picture

Dr.Strangelove: Or How I Learned to Stop Worrying and Love the QE2

rocker's picture

Bloomberg's Pimm Fox blew away analyst from "JPM" today. Pimm talked about how QE2 is making the investors feel "so" good while trashing the rest of America. And he did not stop there. He continued on with how the MBSs from the performing loans on the big CBs are not looking good. And he did stop there. He continued on with how Sally K. from BAC is trying to keep their MER acquisition still alive. Women of the Year, they say, manipulating their portfolio so that the game can continue. Gosh, I hope Tyler and others watched Pimm's best interviews of the year.

repoman's picture

"we cannot allow a mineshaft (output) gap!"

B9K9's picture

I seem to recall the good Dr wasn't surprised the Russkies had developed a doomsday bomb - as it turns out, it's trivial - but that they had neglected to inform (warn) the USA.

Dr. Strangelove: Of course, the whole point of a Doomsday Machine is lost, if you *keep* it a *secret*! Why didn't you tell the world, EH?
Ambassador de Sadesky: It was to be announced at the Party Congress on Monday. As you know, the Premier loves surprises.

Of course, Buck Turgidson's warnings about a 'mine shaft gap', and Strangelove's ruminations are the coup de grâce:

[Strangelove's plan for post-nuclear war survival involves living underground with a 10:1 female-to-male ratio]
General "Buck" Turgidson: Doctor, you mentioned the ratio of ten women to each man. Now, wouldn't that necessitate the abandonment of the so-called monogamous sexual relationship, I mean, as far as men were concerned?
Dr. Strangelove: Regrettably, yes. But it is, you know, a sacrifice required for the future of the human race. I hasten to add that since each man will be required to do prodigious... service along these lines, the women will have to be selected for their sexual characteristics which will have to be of a highly stimulating nature.
Ambassador de Sadesky: I must confess, you have an astonishingly good idea there, Doctor.

President Merkin Muffley: You mean people could actually stay down there for a hundred years?
Dr. Strangelove: It would not be difficult, Mein Führer. Nuclear reactors could - heh, I'm sorry, Mr. President - nuclear reactors could provide power almost indefinitely.

silvertrain's picture

  And bb is the conductor of this train..Reminds me of the wreck of the ole 97 in 1903 {I think} ..Long story short, It was a Fast mail train that was running several hours late to its destination..Against all common sense the conductor was still convinced he could pour more coal to the fire  and get the mail there,meanwhile EVERYONE told him he couldnt make it, he was just to far behind..Full trottle against all critics ,He jumped the tracts at a place called "stillhouse trestle" which was a down grade and also had a sharp turn just before crossing a river..His speed should have been around 30, one witness said the train looked to be going over 50, and legend has it at 70..Said he was found laying over the trottle with the handle turned wide open..Several country and western songs was written about it..

  one man, one word, INSANITY...The only thing the rest of us can do is jump off when we get the chance and let him wreck this train along with the passengers that are alseep....

  Anybody interested in looking at the pictures or reading the story just search,

  "Wreck of the ole 97"

justtotaketheedgeoff's picture

Vernon Dalhart - "The Wreck of the Old 97" Available at 78 rpm.  Good Lord.  The obscure info that one finds at ZH. Now that song is haunting me....."just shovel in a little more coal..."

lincolnsteffens's picture

I had no clue there were Old Time Country Music fans on ZH. Astonishing..."Old 97 left from Washington Station as though she'd been shot from a gun"

Since we are on train songs Georgia Mail is appropriate "Stoke the fire and hope the brakes don't fail, fail, fail"

One for the banksters "I'm headed for destruction. I'm on the wrong track. On the Highway of Sorrow there's no turning back."

How can you tell if a bankster is standing on level ground?....The drool runs out of both sides of his mouth.

Cursive's picture

I had no clue there were Old Time Country Music fans on ZH. Astonishing...

ZH is a long ways away from Kedrosky's intellectual monoculture.

StychoKiller's picture

"900,000 Tons of Steel" -- Grateful Dead

Temporalist's picture

It occurs to me that the majority of people in 1903 wouldn't have a clue what 30, 50 or 70 mph looked like.

Johnny G.'s picture

Why?  Hadn't they all seen horses gallop?  Dogs run faster than 30 MPH and arrows travel considerably faster than 70.  Plus, the 1876 Colt .45 probably performed admirably at expressing the rapid movement of metal.

Temporalist's picture

Agreed but how many people had stop watches and knew the average running speed of a dog or horse or arrow?  It just wasn't as common a reference point like people have now with driving cars that have speedometers on it and wikipedia.

It's not impossible I'm just saying the average person's perception back then of mph was not like it is now.  The speed of that train could have been from anywhere between 25 to 125. 

3 questions

Irwin Fletcher's picture

Because watching something in isn't the same thing as experiencing it or understanding it. Ask anyone but an economics PhD. Doing 30 mph on horseback is more thrilling than doing 79 mph in your swagger wagon, but neither sensation can be fully appreciated by observation alone. Similarly, many people have never seen a photograph of themselves or their family, and the experience can bring them to tears. Seeing yourself in the mirror or seeing your family on a daily basis can't replace a view from a different perspective. We all see the same photons traveling at 3e9 m/s, and we all respond much slower than that. Knowledge that people race at 12000 RPM does not replace knowing how to race a car at 12000 RPM.

MrSteve's picture

Why wouldn't the GPS tracking device have recorded the highest speed in its memory and so have documented the R = S/T????

defender's picture

You got me curious so I had to look it up.  Here is a version by Johnny Cash:

And another version with Flatt and Scruggs along with the Beverly Hillbillies:

StychoKiller's picture

Conductors collect tickets, they DO NOT operate the locomotive!

Founders Keeper's picture

[We are already off the rails, but we are currently flying through the air at 100kmp/h, thinking the train is still on the tracks!]---Herd Redirectio...

Herd, I liked your post. Thanks for posting.

I agree. The cataclysmic global economic meltdown is already underway, but only a few people are aware of this not-yet-obvious fact.

The most curious and perplexing aspect of this historic event is our human reaction to it. Try as I may, my family and friends will not or cannot consider our dire circumstances. Why is that? Even when presented all the facts, the average person I engage is too busy, is not interested, confident things can't be that bad, or considers only my mental stability. A year ago, I finally gave-up trying to "inform" family and friends. 

Perhaps the authors of The Fourth Turning are on to something. Maybe humans are simply unable to hold  memories of historical experiences beyond 4 generations.


Shameful's picture

There is nothing magical about 4 generations. The only lesson history teaches us, is that it doesn't teach us anything. People are able to either avoid knowledge of history or able to delude themselves into thinking this time is different. the individual can learn from history, the masses cannot. The masses will not even remember what happened yesterday, much less 80 years ago.

Also you can't force knowledge on people, God knows I've tried. They are in their own little bubble. They have to want information and to break out of that bubble. Most won't until the pain is to great, and the day of preparation much less salvation is long gone. It's the nature of mankind. I just present facts and based on their reactions I go further or stop, most people want to me unaware. Can you blame them? Knowing the Sword of Damocles is hanging above me colors my worldview.

Clay Hill's picture

""can't force knowledge on people. God knows I've tried/"

"Knowing the Sword of Damocles is hanging obove me colors my worldview."


A constant struggle in my own life between sharing too little with the ones I love, thereby leaving them to be consigned to victomhood without my vigilance, or overloading them with reality.

Better I think, to fight the good fight, and lay out the facts as I percieve them as the duty I have chosen, rather than shirk my responsibility to my Circle.

Perhaps in time, the scoffing disapproval, and looks askance of open disdain I suffer now will bear the dividends in future.




CH1's picture

Try as I may, my family and friends will not or cannot consider our dire circumstances. Why is that?

Probably because they know they are unprepared for the consequences. It's easier to blank it out than to face it. I'll guess that the clearer you make the facts, the more irritated they get.

They are trying to NOT see, and you are making it hard for them. Or at least that's the usual pattern. :(

66Sexy's picture

The truth is: QE3 may NOT happen.

Stimulus reversal wil precede any rate hike.


Mike2756's picture

Yep, they can't print oil.

drom's picture

No QE3 will lead to deflation

The Bernank will not accept the deflation, so inflation it will be

Bob Sponge's picture

I have been wondering: How will the Government fund itself without QE3, QE4, etc.? I don't think that the world wants to buy US debt anymore. China certainly doesn't want it. So, in my opinion, they either need to continue QE or implement austerity or both. Since austerity gets politicians booted out of office, I think we will see more QE. Time will tell.

FEDbuster's picture

I keep trying to write million dollar checks to deposit into my checking account.  The bank says, "these checks are no good".  I argue they will be as soon as the deposit clears.  It's kinda like that.  Counterfeiting takes many forms, this is just one method.

chopper read's picture

QE2.5 IS happening.  bank on it. ;)

I think I need to buy a gun's picture

it amy not first comes gold revaluation then money printing

Judge Judy Scheinlok's picture

"The Grand Ponzi can't be stopped because debt is money and cash is trash!"

This milestone will be significant because there will be an illusion that QE has stopped. But keep a close eye on the side door. You may have to do some math and draw conclusions but once you do it will be obvious.

Follow the money.

metastar's picture

"Open up my front door, hear my back door slam ... "

What side doors are you watching??

Judge Judy Scheinlok's picture

I don't preside over many cases dealing with perversion but since you present such an easy case. Guilty. Don't forget to register:

Yen Cross's picture

Mrs. Scheinlok,


I appreciate your legal knowledge. I appreciate your wisdom, and your interest in the world of finance. You are a woman of class and dignity! I have one question? What are bond spreads. and how will those spreads e-fect the YUAN? Best wishes.

Yen Cross's picture

Confused young lady! Bond spreads were the topic. Your input is appreciated.

falak pema's picture

I once knew a gal called 'Scheincock'...maybe a distant relative...

essence's picture

As JP Morgan (the evil one himself) stated when pressed

"Gold is money... all else is credit"

My oh my how we've gone by the wayside in this country.

Imagine believing in paper notes backed by 'the full faith & credit' of bought off politicians and corrupt bankers.

Folks in the future will look back and reflect ...WTF were they thinking?



Quixotic_Not's picture

All hail Ben the Bernank!

Got Ag?

Rainman's picture

Nice P K putdown. Anybody abusing the term monoculture deserves a whippin.

newworldorder's picture

Maybe if we had a bit more monoculture and a lot less multi culture during the last 30 years our country would not be in this mess.