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Guest Post: "1999"

Tyler Durden's picture




 

Submitted by Fidel Sarcastro

"1999"

It looks like the market will never – ever – learn a lesson.  When there is easy money to be had, the market loses its mind, just like the Nasdaq did in 1999 and 2000.  Prince wrote the song 1999, where he says “gonna party like its 1999.” 

That’s exactly what’s happening today.  Like the Nasdaq in 1999 & 2000, when there were plenty of warning signs about the economy and WILDLY overvalued IPOs, Fraud Street partied on as if it would never end.  One lyric from the 1999 song that most in the market forgot, however, was “party over, oops, out of time.”  Most of the folks who believed in the moronic valuations that Fraud Street sold them ran out of time indeed; they bought the top and lost 90% or more of their speculation, err, pardon, “investments.”

But the market didn’t learn a lesson in 1999/2000 because EZ-Al Greenspan flooded the market with “liquidity” and near-zero interest rates.  His reason was, and this was admitted by Al “Bubbles” Greenspan in many interviews, to INTENTIONALLY BLOW A HOUSING BUBBLE so that the bankster pickpockets wouldn’t lose money on those horrible IPO speculations, err, pardon, “investments.”

When Greenspan finally started raising interest rates, it was too late.  The baton was handed to Ben “Helicopter” Bernanke who was now in charge of lying to Congress, as well as you and me, about the state of the economy.  He said that the rapidly escalating economic problems, especially in Greenspan’s housing bubble, were “largely contained.”
He forgot to tell us that he meant on Mars. 

Chairman Bernanke’s “helicopter” moniker came from a speech in which he said the Fed, under his watch, would throw money from a helicopter in order to keep the economy from entering a non-inflationary period.  OK, he said deflation but we all know he wants inflation now and forever. 

And that brings us to The Ben Bernank’s quantitative easing (QE) policies.  http://www.youtube.com/watch?v=PTUY16CkS-k  With Comrade Ben Bernank at the helm of the current USSA money-politburo, good times are back.  Is the US peso, err, pardon, US dollar plummeting?  No problem, Comrade Bernank will cover your losses.  Is unemployment high and rising (right now)?  No problem, Comrade Bernank will make it all better.  Is housing in the toilet and getting worse?  NO PROBLEM, the Ben Bernank allowed accounting rules to be changed to make accounting fraud legal (he could have stopped Congress, but cheered rather than jeered the idea).  Is inflation rising?  No problem, Comrade Bernank will cover your losses (only if you’re a bank)…oh wait, he is causing it.  These, and a great deal more, are all consequences of his QE policies.

You see folks, like Alan “Bubbles” Greenspan’s plan to intentionally rig the housing market higher, The Ben Bernank is intentionally rigging US equities to go higher.  Like Greenspan, Comrade Bernanke has admitted his QE and POMO policies are being conducted to engineer a higher stock market; a self-imposed third Fed mandate to be sure.  And it is working according to his politburo-like plan.

Question: How many of you would sit idly by if the Fed intentionally rigged the price of copper, or milk, or your salary?  Why is it OK for the Fed to intentionally price-fix interest rates, or housing prices, or now US equities?  Why do people always forget how this manipulation ends?

Thursday morning treated us to four very important economic reports with a bonus: Japanese GDP. ALL OF THEM WERE BAD…some shockingly bad.

I won’t go into much detail but the weekly unemployment claims were once again above 400k for the week, which is nowhere near “recovery” levels.  Moreover, the 4-week moving average is bad and getting worse.  Thirty minutes after the open we received a trifecta of bad news: existing home sales, LEI, and the Philly Fed Survey.  The Philly Fed Survey was the worst of the bunch and its internals are strongly suggesting…recession.

Before we read any of the aforementioned ghastly data, we had the displeasure of reading the Japanese GDP headline.  Sure, it was expected to be bad due to the earthquake, mega-tsunami, and nuclear catastrophe…but not this bad.  (I’ll bet you forgot all about that lil-nuclear problem, didn’t you?  Well, so did everyone else as they chased the bouncing QE ball of Comrade Bernank – just as he planned.)  The Japanese GDP nose-dived -5.2% nominally! 

No worries though, the BOJ is following the Book of Greenspan & Bernanke to the letter – trillions more Yen will be freshly printed soon.  Although this catastrophic Japanese slowdown will be, and has already been, bad for many US companies – it just doesn’t matter.  After all, The Ben Bernank bouncing QE ball is still, well, bouncing and all of Fraud Street is mesmerized by it just like in 1999/2000 and up to 2007.

What puts the icing on this cake, however, was today’s LinkedIn IPO. 

In the halcyon days of 1999 and 2000, where any joker with an MBA and a website could get a stupid idea underwritten by the pickpockets of Fraud Street due to “search views” or “eyeballs,” profits weren’t needed.  Somehow the laws of finance had ended; there was a new paradigm.  It was a FRAUD!  But it didn’t matter; low interest rates and stock mania pushed rational reasoning aside.  (By the way, did anyone from Fraud Street go to jail for pushing that scam?  No?  Yeah, I didn’t think so either.) 

In those days the scam artists raked in tens or hundreds of millions of dollars.  Today’s scams bring in $billions.  The opening price of today’s LinkedIn IPO was $83 per share.  It soon skyrocketed to $122.70 per share but traded to $92.40 in the aftermarket, giving the goofball who top-ticked the market a loss of about 25%. 

“So, Mr. Fraud Street salesman, what is the annual net profit of LinkedIn?” 

“Mr. Patsy, pardon, Mr. Smith, this is a growing company with great potential.”

“I see you avoided my question. How do they make profits?”

“Mr Sucker, pardon, Mr. Smith, they have a growing membership.”

“Wait a second; is this like that crap IPO you sold me in 1999 that had great search views or whatever the hell it was?”

“Mr. Smith, LinkedIn has a huge membership…with potential to grow its membership.”

“Membership?”

(In a hushed voice) “Yeeessssssss….mem-ber-ship.”

At this point the clueless mark of the Fraud Street salesman is sold.  He no longer cares about profits - just meaningless BS like “membership growth potential” and another clown follows the QE bouncing ball and acts like it was 1999 allover again.  He was the poor sucker that top-ticked LinkedIn today and deserves to lose 25% of his speculation, pardon, “investment” in a matter of hours. 

At one point during the IPO, LinkedIn sold with a PE ratio over 1,200!  Congratulations Comrade Bernanke, you have successfully reanimated the corpse of the wild-eyed speculator.

Today’s IPO madness and complete disregard for all of the economic news did it for me.  Although I trade with the trend and have done nicely on the long side – I’m getting out.  This should not be taken as advice for anyone else, after all, Comrade Bernanke may soon announce QE3 and more; however, I suspect he will call them different names to keep the suckers coming into the casino. 

This reminds me too much of the Nasdaq and housing bubbles.  Now…what was that line in Prince’s 1999 that everyone forgets?  Oh yeah, “Party over, oops, out of time.”  Like so many millions of suckers learned when the bubble burst, they will again find out they ran out of time.

(And this doesn’t even include the hell that soon comes our way when Greece or Ireland defaults…or Spain’s government falls…or all of them.)

Trade well and follow the trend, not the so-called “experts.”

 

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Thu, 05/19/2011 - 22:51 | 1294355 Yes_Questions
Yes_Questions's picture

I was dream'n when I wrote this...

Thu, 05/19/2011 - 23:01 | 1294385 hedgeless_horseman
hedgeless_horseman's picture

...so sue me if it goes astray.

But when I woke up this (Saturday) morning

could have sworn it was Judgement Day.

Thu, 05/19/2011 - 23:10 | 1294419 Yes_Questions
Yes_Questions's picture

The sky was so puprle there was Fiat Ink everywhere..

Thu, 05/19/2011 - 23:53 | 1294541 hamurobby
hamurobby's picture

had so much gold, that I didnt even care...

Fri, 05/20/2011 - 07:50 | 1294937 MonsterBox
MonsterBox's picture

Buy more phyzzz, especially gold.

Thu, 05/19/2011 - 22:56 | 1294370 Mec-sick-o
Mec-sick-o's picture

Standing in line Bubble IPOs:

Farcebook

Tooiter

Appol oops, thats not an IPO, but ready to pop.

Thu, 05/19/2011 - 23:03 | 1294383 Michael Victory
Michael Victory's picture

7B, there is enough for all of us.

Thu, 05/19/2011 - 23:03 | 1294382 buzzsaw99
buzzsaw99's picture

Can't blame Wall Street, Calpers keeps coming back for more. LMAO!

Thu, 05/19/2011 - 23:05 | 1294388 Yen Cross
Yen Cross's picture

  Hey Buzz. This was written by a Mortgage Broker.

Thu, 05/19/2011 - 23:03 | 1294392 buzzsaw99
buzzsaw99's picture

Fidel Sarcastro? bree hee hee!

Thu, 05/19/2011 - 23:09 | 1294404 buzzsaw99
buzzsaw99's picture

I can't stand Prince. Hammer time!

http://www.youtube.com/watch?v=yjYaAO1GvE4

Thu, 05/19/2011 - 23:23 | 1294452 Yes_Questions
Yes_Questions's picture

Conjoined twin humor?

 

Thu, 05/19/2011 - 23:48 | 1294523 JohnG
JohnG's picture

A fine rant.  Thanks for that.

We all know we've been fucked already.

How do we fix it?

See Egypt, Tunisia, Greece Spain, etc.

That's how.

JG

Thu, 05/19/2011 - 23:51 | 1294534 hamurobby
hamurobby's picture

And we will probably drown in a debt driven supermassive black hole, may citi die please, oh so short the deserving bitch lol. rev split they did...Didnt Spalding say many months ago he was going to get rich long C?

die mfers die.

Thu, 05/19/2011 - 23:55 | 1294548 Mec-sick-o
Mec-sick-o's picture

Isn't Spalding the guy that survived the plane crash with Tom Hanks?

Fri, 05/20/2011 - 06:59 | 1294892 Cui Bono
Cui Bono's picture

Wilsooooooooooooooooonnnnnnnnnnnnnnnnnnnn

Fri, 05/20/2011 - 07:46 | 1294933 lamont cranston
lamont cranston's picture

Spalding was Ted Knight's nephew in Caddyshack. The one who ate his boogers.

NOONAN!!!

Thu, 05/19/2011 - 23:53 | 1294549 Urban Redneck
Urban Redneck's picture

The FED, Congress, JPM et al. do fix the price of gold, oil, copper, milk, and your salary. 

Sometimes more successfully than others. 

Why should interest rates, or housing prices, or equities be any different? 

Fri, 05/20/2011 - 04:46 | 1294833 silberblick
silberblick's picture

Click below to watch YouTube's Harisebon7777777 short videos. He should be commended for his work on measuring the radiation levels in Tokyo. The device he uses costs about $1000, which I am sure he has paid out of his own pocket to provide us with the truth of what is really going on in Japan.

It is eerie to watch his videos. Typically, his hand is shown holding a geiger counter in some public place with people walking all around him as if there was nothing of importance going on; while all along, the geiger counter in his hand reveals what is really happening. Harisebon is documenting the slow irradiation of the Japanese archipelago. A visual unfolding of a tragedy.

While watching these videos. it is hard not to wonder how many of the folks one sees walking down the street will come down with cancer in 10, 20 or 30 years. In fact, the videographer's life itself is in peril. Poignant.

Go to Harisebon's YouTube channel and give him a shout-out. He deserves it.

http://fukushimadisaster.blogspot.com/2011/05/radiation-harajiku-omotesa...

Next, click below to read about the Orwellian steps taken by the Japanese government to hide from the foreign press (and its citizens) what is really going on in Fukushima:

http://fukushimadisaster.blogspot.com/2011/05/japanese-government-takes-...

Fri, 05/20/2011 - 06:08 | 1294863 aeiou260199038
aeiou260199038's picture

It is all about bringing forth batterie the new breed of artist within the scene...

Fri, 05/20/2011 - 07:14 | 1294901 ILikeBoats
ILikeBoats's picture

Unable to invest in Facebook, the sheeple bought LNKD instead.

Fri, 05/20/2011 - 07:33 | 1294917 Freewheelin Franklin
Freewheelin Franklin's picture

The Austrians say, too much cheap, easy money leads to mal-investments, which cause the boom/bust cycle. However, I don't recall reading anywhere that massive amounts cheap, easy money over an extended period of time leads to widespread fraud, corruption and system failure. I guess the Austrians figured that was just too fucking obvious to mention.

Fri, 05/20/2011 - 08:43 | 1295015 slovester
slovester's picture

Meet the new paradigm, same as the old paradigm.

Fri, 05/20/2011 - 10:21 | 1295270 Alfred
Alfred's picture

Why do people always forget how this manipulation ends?

Because assholes who make their living gaming the system - yes, most of you - keep playing the game. A few of you will have your heads handed to you in the end, but most will eke out a gain. And that's why you play, and that's why you guys really don't give a fuck about all this bullshit that you're talking about.

So fuck you.

Fri, 05/20/2011 - 13:35 | 1296096 BlaZingPenguin
BlaZingPenguin's picture

haha, never thought I would see an article relating to prince on this website :)

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