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John Taylor: "November Will See The Flash Point That Begins The Market's Reversal"

Tyler Durden's picture


John Taylor, who has not made any friends at the administration with his recent comparison of Ben Bernanke to Hitler, has released his latest letter whose purpose is to disabuse what Traxis flip flopper extraordinaire Barton Biggs (or rather is praying, due to his high single digit negative YTD P&L), as well as many others believe, will be a 10% boom in stocks prices following November 3. Wrong. As this whole rally has been liquidity driven, all that will take to reverse it, is for someone to step between the Chairman and his favorite Hewlett Packard. That someone: anti-Fed crusader Ron Paul, who will see this as his last mandate (and chance) to leave a memorable mark on the Fed's modus operandi: "After the Republican victory things will change. The Fed will be
hamstrung, as Ron Paul, a conservative standard-bearer and harsh critic
of the Fed, will head the sub-committee overseeing its actions.
Liquidity expansion or new programs will probably drop sharply under his
Paul would argue that the Fed’s unfettered ability to “debase” the currency is about to come to an end" Which is why all those who believe "more of the same" will continue indefinitely, may be wise to hedge their bets. Taylor also looks at the game theory between the Fed and the ECB: "As the US authorities turn to a tighter monetary and fiscal policy,
driving the country into a recession, causing the US and its banking
system to withdraw liquidity forcing the dollar higher, the ECB will be
forced to be more accommodative. Our analysis argues that the month of
November will see the flash point that begins to reverse the markets’
optimistic course."

A Major Risk Reversal Is Coming Soon
October 28, 2010
By John R. Taylor, Jr.
Chief Investment Officer

Two important elections occur during this next month, one in Greece and one in the US. In both we should see a swing to the right and this move, if large enough, could just be the event that kicks off the next global recession. Although the newswires have hardly mentioned Greece during the past four months, the situation in Athens remains difficult. Even though most of the drastic measures have yet to be implemented the PASOK government is being roasted in the opinion polls, where 67% say that it is doing a bad job. Municipal elections occur in two weeks and it seems clear that the Socialists will lose in all parts of the country, defeated both by the right and in some cases by splinter groups of all types.

Although one could pass this off as nothing more than an unimportant popularity contest, Prime Minister Papandreou stated this week, ”the citizens will give a clear signal where they want the country to go.” If his party loses this support, he would call a general election as a referendum on the “Memorandum” with the EU, ECB, and IMF. Despite what the opposition calls his “blackmail,” the PASOK will lose next weekend and the Greek crisis will pop onto our radar again. If Papandreou does call a general election, the risks will be enormous as the entire program will be placed under the looking glass once again – and the government will probably be defeated at the conclusion of the debate.

Across the ocean, the American mid-term elections will not unseat Obama, but will further limit his very limited freedom of action. The House of Representatives should be comfortably controlled by the Republicans while the Senate should be split within one or two votes of 50–50. In the US this means certain gridlock at a time when fiscal tightening is already programmed into the next few years. If any fiscal stimulus is applied, it will be through tax relief rather than through targeted government programs. The euro has been strong and dollar has been weak for the past two months, but these two elections should have a big impact, most likely reversing these trends. Currently, the US Fed has anticipated the economic slowdown resulting from the withdrawal of the fiscal stimulus by trumpeting its new round of quantitative easing. The expectation of this dollar-creating process is resulting in a very weak dollar.

After the Republican victory things will change. The Fed will be hamstrung, as Ron Paul, a conservative standard-bearer and harsh critic of the Fed, will head the sub-committee overseeing its actions. Liquidity expansion or new programs will probably drop sharply under his watch. Paul would argue that the Fed’s unfettered ability to “debase” the currency is about to come to an end. The leading indicators call for a US recession next year – and Bernanke is acting as though he believes this – but with the Republican dominance, fiscal and monetary support will not be quickly supplied, which implies a stronger dollar. Fiscal stimulus is being withdrawn dramatically in Europe and the Eurozone is on its ways to a recession as well. Although the mean GDP for the Eurozone has been impressive lately, arguing that Europe is doing well is like arguing that Dallas, Texas has a balmy Mediterranean climate as the yearly mean temperature is 19oC, but in the summer the mean high is 36oC and in the winter the low is 2oC. The average obscures a lot if information and never more so than in Europe: Germany is in the summer while Ireland and the other PIIGS, roughly 30% of the populace, are in the winter. Although the Euro-authorities will be reluctant to act until a crisis rattles them, Greece could do it again. As the fiscal austerity begins to bite, the ECB will eventually be forced to further inject liquidity into the banking systems and support them too. As the US authorities turn to a tighter monetary and fiscal policy, driving the country into a recession, causing the US and its banking system to withdraw liquidity forcing the dollar higher, the ECB will be forced to be more accommodative. Our analysis argues that the month of November will see the flash point that begins to reverse the markets’ optimistic course.

Also, here is Taylor's recent, and just slightly less pessimistic interview with Erik Schatzker. 



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Fri, 10/29/2010 - 15:51 | 686629 Al Gorerhythm
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RP should have his heart checked by an independent GP.

Fri, 10/29/2010 - 15:55 | 686635 skohiu
skohiu's picture

+1  Another scenario is "suicide".....

Fri, 10/29/2010 - 16:15 | 686683 Just_Crash_Already
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If they wanted him dead, it would have been done already.

Much easier to try and discredit him. No one wants to make him a martyr.

I say he gets elected in 2012, the dollar finally collapses, and they blame austrians for all our ills. The ultimate irony.

Fri, 10/29/2010 - 17:03 | 686788 66Sexy
66Sexy's picture

yes i believe this too.

Fri, 10/29/2010 - 18:53 | 687054 LowProfile
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It will be clear he had nothing to do with it, and Paul will easily make the point that the Fed's money creation was at the root.

He would be elected to rebuild on the smoldering ashes.

Fri, 10/29/2010 - 21:10 | 687341 Dirtt
Dirtt's picture

yes I believe this three

Sun, 10/31/2010 - 21:24 | 689709 BigJim
BigJim's picture

I think the only reason he's still alive is because hardly anyone listens to him. He speaks the truth 99% of the time, and what's the result? 95% of the population think he's a nut.

I fear that if his ideas really start gaining traction, he could wind up very dead very quickly :-(

I am not really a religious man, but even so, I pray RP has an angel watching over him. 

Fri, 10/29/2010 - 16:10 | 686669 TuesdayBen
TuesdayBen's picture

Rand Paul'll do it for free.  Senator Rand Paul, that is.

Fri, 10/29/2010 - 22:27 | 687451 StychoKiller
StychoKiller's picture

It's my understanding that Rand Paul is an Opthamologist, so all he could do is check Ron Paul's eyesight, which seems all to clear to me already!

Fri, 10/29/2010 - 15:56 | 686633 kato
kato's picture

well, anyone who compares just about anyone to hitler is hard to take at all seriously. i mean, we are talking hitler... stupid analogy. couldn't he have just used stalin...? 

and i am no fan of ben and the fed.



Fri, 10/29/2010 - 16:00 | 686651 chrisd
chrisd's picture


Fri, 10/29/2010 - 16:09 | 686670 SheepDog-One
SheepDog-One's picture

Why is Hitler considered off limits to be used as a reference to, and Stalin acceptable? Technically, Stalin killed FAR more people than Hitler ever did.

Fri, 10/29/2010 - 16:13 | 686676 TuesdayBen
TuesdayBen's picture


Fri, 10/29/2010 - 19:45 | 687155 Nassim
Nassim's picture

Mao killed 50+ million but we are lucky that the Chinese don't run Hollywood

Fri, 10/29/2010 - 20:03 | 687186 MeTarzanUjane
MeTarzanUjane's picture

Replace `run Hollywood` with "run the country". Ty.

Fri, 10/29/2010 - 21:12 | 687347 Dirtt
Dirtt's picture

George Bush killed 50+ billion.  You must have missed that movie.

Wed, 11/03/2010 - 09:58 | 695576 DosZap
DosZap's picture

Where do you get your Weed?.

Must REALLY be some good chit'  mon.



Fri, 10/29/2010 - 17:11 | 686820 jomama
jomama's picture

it's more about WHO he killed, shouldn't matter, but it does.  i guess some people believe they are more equal than others.

Fri, 10/29/2010 - 17:27 | 686853 Monday1929
Monday1929's picture

You have small Dick, no? Want to blame others?

Fri, 10/29/2010 - 21:16 | 687350 zaknick
zaknick's picture

He's a daggone furrener!

Fri, 10/29/2010 - 17:20 | 686842 Walter_Sobchak
Walter_Sobchak's picture

it's a classical logical fallacy - the argument ad hitlerum.  we're entering a world of pain

Fri, 10/29/2010 - 17:35 | 686876 Wyndtunnel
Wyndtunnel's picture

No no no. It's the MOUSTACHE. People just don't understand! Men are not evil!! Their facial hair is.  That's why Geitner with crazy hair and no facial hair is only somewhat fact he's more dumb than anything else and yet Bernanke, no hair and lots of facial hair is WAY evil..

I wrote a song about it...


Fri, 10/29/2010 - 22:28 | 687453 StychoKiller
StychoKiller's picture

Well, that theory would go a long way in explaining my dark fantasies...

Fri, 10/29/2010 - 17:44 | 686893 kato
kato's picture

it was a facetious comment.

Fri, 10/29/2010 - 17:53 | 686915 Wyndtunnel
Wyndtunnel's picture

You sure you weren't being fascist?  ;-)

Fri, 10/29/2010 - 20:10 | 687188 Al Gorerhythm
Al Gorerhythm's picture

With a qualification? Bullshit.

The commentator compared Ben to Hitler with a question laced with incredulity, that anyone could compare the two. He didn't base his question on the warnings that the two issued about their plans, and the answer from Taylor followed in the same vein.

The article states that Hitler warned of his plans for war. Bernanke has issued his. The theme: Is anbody listening?

The war is here (currency), no one took any notice.

Well, some did.


Fri, 10/29/2010 - 17:53 | 686917 CH1
CH1's picture

Two reasons:

1. Hitler was more flamboyant.

2. The lefties had first position at the publicity machine for a long time, and didn't like a commie being the poster-boy of evil.

Fri, 10/29/2010 - 18:19 | 686969 nmewn
nmewn's picture


Fri, 10/29/2010 - 18:59 | 687075 trav7777
trav7777's picture

no it really has everything to do with Hitler's having killed lots of jews

Fri, 10/29/2010 - 21:59 | 687412 New_Meat
New_Meat's picture

"Why is Hitler considered off limits to be used as a reference to,..."

Yo, Dog.

ya gotta go way back into the uunet "flame wars" to find an answer to this question. -- Answer: "anyone who invokes either Hitler or the Nazis" has already lost the argument.

So: off limits.

Stalin killed as many (maybe more) but not as publicly and besides, he was Roosevelt's ally.

Go figure.

- Ned

Sat, 10/30/2010 - 11:39 | 687943 macholatte
macholatte's picture

in the interview he said he used Hitler to get attention and he did.

next: mass murderers (top 5)

1 = Mao        70 million

2 = Stalin      20 million

3 = Hitler      11 million ?

4 = Tojo         8 Million

5 =  Pol Pot    1.5 Million


Get your facts first, then you can distort them as you please.
Mark Twain


Sat, 10/30/2010 - 12:13 | 687969 ict558
ict558's picture

I have only 500,000 subjects. It is just not fair, I will never attain an international rating.

Surely we should be rated by the number murdered as a percentage of potential murderees.

Sat, 10/30/2010 - 19:44 | 688387 nmewn
nmewn's picture

I see a pattern here.

1 = Mao = communist                                70 million

2 = Stalin = communist                              20 million

3 = Hitler = fascist/socialist                        11 million ?

4 = Tojo = prime minister under a monarch 8 Million

5 =  Pol Pot = communist                          1.5 Million

Wed, 11/03/2010 - 10:03 | 695590 DosZap
DosZap's picture

"Stalin killed as many (maybe more) but not as publicly and besides, he was Roosevelt's ally.

Go figure.

- Ned"

Because they thought alike, and had the same belief systems.

FDR, along with Wilson, where the TOP 2 Dogs in bringing us where we are today.

Fri, 10/29/2010 - 17:29 | 686860 NOTW777
Fri, 10/29/2010 - 18:34 | 687012 Assetman
Assetman's picture

+3.14 (I like pie)

And just for the record, the best analogy in my mind would be Mussolini.

Fri, 10/29/2010 - 18:37 | 687019 dehdhed
dehdhed's picture

he didn't say bernanke was like hitler

he said bernanke has been telegraphing his intentions for years just like hitler did, but no one took them seriously

seems like an acceptable analogy to me


Sat, 10/30/2010 - 11:10 | 687929 BrosMacManus
BrosMacManus's picture

cue the anti-semites in 3...2...1...btw, where Chumba?

Sat, 10/30/2010 - 09:52 | 686638 99er
99er's picture

Weekend Charts

Have a great one, folks!

Fri, 10/29/2010 - 15:56 | 686639 skohiu
Fri, 10/29/2010 - 15:57 | 686642 Cdad
Cdad's picture

Selling the mo mo winners into the close....hard.


Fri, 10/29/2010 - 20:10 | 687201 MeTarzanUjane
MeTarzanUjane's picture

That is exactly why I do not believe much of what this author commits to disk.

"Our analysis argues that the month of November will see the flash point that begins to reverse the markets’ optimistic course."

There are 6 hedge funds in the Reston Va. area with direct funding from the FED tasked with saving America with unlimited free FED dollars and powerful trading algorithms.

Does this guy think the Reston 6 are going on Holiday?

Fri, 10/29/2010 - 15:57 | 686645 midtowng
midtowng's picture

You are assuming that the Republicans will actually live up to their rhetoric. That's a very big "if".

However, we are probably already in recession, and its going to get worse.

Fri, 10/29/2010 - 16:01 | 686652 jus_lite_reading
jus_lite_reading's picture

"However, we are probably already in recession, and its going to get worse."

Today is Friday, October 29th, 2010. Are you copy and pasting that line from 2007? We are in a DEPRESSION and it's going to get worse.


Fri, 10/29/2010 - 16:52 | 686757 frankTHE COIN
frankTHE COIN's picture

1 if by land. 2 if by sea.

Fri, 10/29/2010 - 17:47 | 686902 Al Gorerhythm
Al Gorerhythm's picture

Good one, Sherlock.

Fri, 10/29/2010 - 15:58 | 686647 NotApplicable
NotApplicable's picture

Do the Repubs have to give the chair to their ranking member, or can they pick a junior member?

Fri, 10/29/2010 - 16:04 | 686660 Ragnarok
Ragnarok's picture

They can pick whomever, but ranking members expect to be picked.  A bunch of left overs from the Bush years, I want fresh unspoiled blood.

Fri, 10/29/2010 - 16:05 | 686661 Uncle Remus
Uncle Remus's picture

I'm thinking that just about the whole lot needs to get the chair.

Fri, 10/29/2010 - 16:57 | 686773 NotApplicable
NotApplicable's picture


Fri, 10/29/2010 - 16:56 | 686771 knukles
knukles's picture

All I want for Christmas is an Audit of the Gold.  Ain't been done for eons.  Is it there?  Is it Wolfram plated?  How about an assaying?  Why not?

Any public entity (well, most any, how about GLD and SLV as well as all of the custodial and sub-custodial vaulting facilities) would be periodically required (unless otherwise excused by some power that be for some reason) to do so. 

Audit the Vaults!  


Fri, 10/29/2010 - 17:55 | 686921 CH1
CH1's picture

Sensible... which means the guv will never do it.

Fri, 10/29/2010 - 22:33 | 687465 StychoKiller
StychoKiller's picture

"What?  Don't ya trust us??"

Sun, 10/31/2010 - 21:30 | 689720 BigJim
BigJim's picture

The haulage industry would be pleased.

Just don't hold all the audits at once.

Fri, 10/29/2010 - 15:58 | 686648 jus_lite_reading
jus_lite_reading's picture

I am going out on a limb here BUT... the false flags we see are the lead up to a major war in the Mid-East which the sole purpose is to draw attention from the collapse of the entire financial system. But what do I know?

Fri, 10/29/2010 - 16:10 | 686673 Cdad
Cdad's picture

My guess, as well.  As TD has so completely documented, the banks are simply zombies waiting for justice...the baseball bat to the proverbial zombie head.

I don't think Ben can pump enough money out fast enough to save the banksters from their plight.  As noted in this article, Ron Paul is about to get his way. 

BAC in single digits by Tuesday.  The action there was simply terrible today.  Someone was unloading half a million shares on the minute ticks over and over again all day...and some invisible hand was there holding that things up.  Hard to believe that one, really.  Maybe Uncle Ben money already in action.

What a mess.

Fri, 10/29/2010 - 16:34 | 686720 breezer1
breezer1's picture

false flag or black swan. whatever distraction is required.

Fri, 10/29/2010 - 16:06 | 686662 Joe Davola
Joe Davola's picture

Across the ocean, the American mid-term elections will not unseat Obama, but will further limit his very limited freedom of action.


Limited - really?  He has had majorities in both houses of congress his whole term - as well as a filibuster proof majority for a significant portion of that time.

Fri, 10/29/2010 - 16:09 | 686668 Uncle Remus
Uncle Remus's picture

Perhaps he is referring to the fact the Obama is not his own man.

Wed, 11/03/2010 - 10:13 | 686953 DosZap
DosZap's picture


He does until Weds a.m.....................

After that, he may ( very possibly, 90%+ chance he won't have EITHER as a majority).

BANK IT!,and I I'm takin bets he loses 100% for sure the house, 60-75 seats, and at least 8 Senate seats.( DAMN I'm GOOD!!),I know my checks in da mail.

(Plus, the Senate has to sign in the dude who took Kennedys seat ASAP,not Jan).

If the crooked bastd, starts EO'ing shit, he is dead meat.

American people will not stand for it,a lot of folks here think they are just talk,well that talkk is cosing the Dems & the GOP dearly.

Any further END around shit, we see a CON CON.

Fri, 10/29/2010 - 16:07 | 686666 Rogerwilco
Rogerwilco's picture

The new Congress isn't sworn in until January. That said, I, believe Bernanke is no fool and he will adjust to the new climate in DC. A strong dollar announcement and a 50 bp hike in the funds rate would make him fit right in with the new crowd. Equities and Krugman? Not so much.

Fri, 10/29/2010 - 16:23 | 686694 Almost Solvent
Almost Solvent's picture

Lame ducks are like a wounded rabid animal.

Elections should be on a Friday (with absentee ballots due that same day, not postmarked) and new members sworn in that Monday.

Fri, 10/29/2010 - 16:27 | 686707 Dr. No
Dr. No's picture

Better yet, their last day should be the last day of the session.  Then have the election.  The new elected personnel takes office the usual time the new year.

Fri, 10/29/2010 - 16:58 | 686774 knukles
knukles's picture

Lame and Krugman in the same sentence!  Start of a great weekend!

Fri, 10/29/2010 - 16:34 | 686719 SheepDog-One
SheepDog-One's picture

Perception is reality in this case, anything to upset the present structure of outright fraud and corruption and daily unobstructed market manipulation sends the entire thing into a tailspin. Theyll all be looking to get themselves out in 1 piece, all else be damned.

Fri, 10/29/2010 - 16:10 | 686672 Eureka Springs
Eureka Springs's picture

just how influential can a sub committee chair be? Maybe Paul can shine a light in a few more places, but I doubt he can get major things passed the two party one money criminal cabal in the rest of the House.


*Not that I agree with much of Paul's fiscally Libertarian ways.

Fri, 10/29/2010 - 16:24 | 686702 ssp2s
ssp2s's picture

He can't pass legislation but he can hold hearings.

Fri, 10/29/2010 - 16:27 | 686706 Oracle of Kypseli
Oracle of Kypseli's picture

There are still three months before RP gets to be chairman and many things can happen by then.

Since this is a no-win situation, the only thing RP can do, along with the new blood, is to better the odds. 

Fri, 10/29/2010 - 16:41 | 686728 hamurobby
hamurobby's picture

Well then I would guess that Ben better pick a big enough number to get by for awhile. I bet that gap will be a painful one for the usd. Hell it probably does not matter, no one really knows what the fed does other than what they admit to.

Fri, 10/29/2010 - 16:11 | 686674 SheepDog-One
SheepDog-One's picture

If anything at all upsets the present market reality and forms any obstacle between Benny and his Inkjets, even a dust bunny, its over.

Fri, 10/29/2010 - 16:13 | 686679 Quinvarius
Quinvarius's picture

Blah blah blah.  I'm shorting the results of 10 years of money printing and losing.  Blah blah blah.  Strong dollar cause I say so.  Blah blah blah.

As the latest attempt to hype and intervene to prop the Dollar implodes, the suckers who who took the bait are crying.  DO NOT BOTTOM FISH THE DOLLAR.

Fri, 10/29/2010 - 16:18 | 686686 theXman
theXman's picture

Completely agree with John Taylor. In addition to papa Paul, we will have his son Rand Paul to join the crusade against Bernanke. They will shut down his printing press and shoot down his helicopter.

Fri, 10/29/2010 - 16:27 | 686701 sschu
sschu's picture

They will shut down his printing press and shoot down his helicopter.

Whatever your political persuasion and world view it will be disappointing if we do not see an increased scrutiny of the Fed.  Real Congressional hearings, threats of an audit, real review of the 2008 Fed actions and honest discussions about the role of the Fed and the direction of monetary policy would be great and important.

If these do not happen, it will be very revealing.


Fri, 10/29/2010 - 16:19 | 686689 Sudden Debt
Sudden Debt's picture

This is just looking to the dark side and looking for the deepest hole.

My guess is that we'll start to see government initiatives for small companies, tax reductions...

Me for one. I do believe people are really trying to improve things.

Me for one. I do believe people are good and want to do good.

So I expect nothing less from any government.

Sure they screw up sometimes but all in the mayor sceme. And that sceme isn't bullshit like "the new world order" or crap like that.

The western world is a democracy. But there are 1 billion people in the western world (US & EU) and that means not everybody is heard. People who think in this kind of bullshit world order crap are mostly the once who feel they are and haven't been heard.

This shit is all truning out to paranoid for me. Why don't we hear anything good here? Because there isn't or because you only want to see the bad detail things?

Me, I'm a believer. I'm bullish untill the end of the year at least.

Fri, 10/29/2010 - 16:39 | 686724 ZeroPower
ZeroPower's picture

Hi SD, Some good perspectives there.

We are here because we are not sheeple and have our own views and appreciate to value other people's views as well. However, when do the people not wanting to be sheep get changed into sheeple anyway by having the doomsday smokescreen in front of them?


Im not bullish per se, but theres no way in hell i see us reentering SPX 700 any time soon. This bubble has to be nourished and brewed for quite a bit longer.

Fri, 10/29/2010 - 16:46 | 686741 Sudden Debt
Sudden Debt's picture

I know that ZP, but sometimes I would like to also read the stuff that goes well.

If you only focus on the bad part of the story, you miss the whole story.

And yes, I grew up with disney movies, so I believe everything always has a happy ending :)


Fri, 10/29/2010 - 16:58 | 686775 ZeroPower
ZeroPower's picture

Indeed - but i feel like we get enough of the green shoots topics at our other news sources. What keeps us coming back here? Besides the knowledgeable discussion, i'd say its the fact that we can read bearish news that we'd be hard pressed to find somewhere else. By no means is this place unbiased - but everything else is so biased as well, it just seems the nice counter-fit. 

Fri, 10/29/2010 - 17:30 | 686863 Walter_Sobchak
Walter_Sobchak's picture

you probably believe in Santa too

Fri, 10/29/2010 - 20:19 | 687221 Al Gorerhythm
Al Gorerhythm's picture

Then subscribe to the (White) Washing(ton) Post or the Well Street Journal.

Fri, 10/29/2010 - 17:22 | 686843 dehdhed
dehdhed's picture

it took me about a week to get tired of the term 24/7

the first time i heard the macerana i knew it was one of those songs that would eventually drive me nuts

the term sheeple is getting so old it ranks right up there with both of 'em

Fri, 10/29/2010 - 22:41 | 687477 StychoKiller
StychoKiller's picture

"...with the Politicians throwing stones, it's all too clear we're on our own -- so the kids they dance and shake their bones, singing 'Ashes to Ashes All Fall Down' -- Ashes to ashes ALL fall down!" -- Grateful Dead

Fri, 10/29/2010 - 17:43 | 686891 StarvingLion
StarvingLion's picture

Me, I'm a believer

Yeah, you believe in putting gasoline in your tank like all the rest of the morons.  You should be on Jeopardy.  "Hi Alex, I'm an big time oil consumer.  Thats what I do for a living"

Sat, 10/30/2010 - 14:39 | 688097 scratch_and_sniff
scratch_and_sniff's picture

"This is just looking to the dark side and looking for the deepest hole"

With $8bln in managed funds, i dont think JT is looking for the deepest and darkest hole, i just think he is looking for the right one mate! If it happens to be dark in your view, then i guess you dont have to look at that particular reality. (even though I cant find anything particularly dark in this case)

The world is full of escapism SD, take your pick,(you can see it as world order, world harmony or chaos, chaotically trying to sort itself out), what ever gets you through the night, pick a theory, pick a paradigm. You dont have to look for the truth(an fucking arduous and dangerous process), but when and if you find it, its seldom what you want to hear, because generally life is just one long process of being broken down, diverted, humbled, shocked and put back in your place, dust to dust…with the odd moment of glory, of course, but you better be fit to seize it.

Peace & love, and everything in between or thereabouts.

Sun, 10/31/2010 - 21:42 | 689743 BigJim
BigJim's picture

I think on the whole you're right; people are good, people want to improve the situation... but with the proviso, only 'most' people are these things.

Unfortunately, government provides the incentive and means for sociopaths to hijack positions of power; these people's idea of improving things is to plunder their fellow citizens. History is littered with examples of evil rulers who did terrible things.

Democracy forces our crop of leaders to act a lot more circumspectly than totalitarian dictators, but their intentions are just as self-centred.

So I'm afraid I can't agree with you. Don't see why you were junked, though.

Fri, 10/29/2010 - 16:21 | 686697 SpeakerFTD
SpeakerFTD's picture

Rock on, Ron Paul!!!!  

End the Fucking Fed!

Fri, 10/29/2010 - 16:30 | 686711 Dr. No
Dr. No's picture

I live in Dr. Paul's district and I must say, he has the best campain signs: "Ron Paul, the tax payer's best friend".   ooops.  I may have hinted at the location of my underground lair.

Fri, 10/29/2010 - 22:43 | 687484 StychoKiller
StychoKiller's picture

I would have expected you to be in a respectable ungerground Volcano Lair -- like that huge caldera under Yellowstone! :>D

Fri, 10/29/2010 - 16:31 | 686714 SheepDog-One
SheepDog-One's picture

The Keynesian lunatics have had their 2 years unobstructed experiment and its a huge failure. Now time to mop up the mess, likely only after a major world war, financial ruin like nothing seen even in WW2, billions dead worldwide...then maybe some sense can be rebuilt in this country if anything is left at all. 

Fri, 10/29/2010 - 16:46 | 686715 Shameful
Shameful's picture

Sounds like he assumes that 1. The establishment would grant Ron Paul power to steer things 2. Ron Paul would mellow if the Fed was less destructive.

1.  Not going to happen.  Even if it takes a mountain of under the counter cash, dump trucks of blow, and hundreds of DC whores they will turn the new wave of goons going in.  And really most won't need much convincing.  The neo-cons are good at slapping a coat of libertarian paint on themselves around election time.  They will call Ron Paul to fringe and claim that we need to be less partisan in looking for solutions and need to work with the Fed.

2.  Assuming Ron Paul does get more power to go after the Fed, why would he back down if they acted less destructively?  The man wrote a book titled "End the Fed", I think we all know his position.  If anything the Fed will act more wild and destructive like a caged panther.  They can thrash around to show everyone they still have power and not to mess with them, or if they are going to get a real audit or disband just go out with a bang.  The Fed will be more not less dangerous when threatened and/or near the end of it's life.

Fri, 10/29/2010 - 18:46 | 687037 DosZap
DosZap's picture


The neo-cons are good at slapping a coat of libertarian paint on themselves around election time.  They will call Ron Paul to fringe and claim that we need to be less partisan in looking for solutions and need to work with the Fed.


That has been true a long time, but, things are different THIS time.

The Shitple, have had a gut full, and the Tea Party is growing by leaps and bounds, they are now 30%+ of the voting populus, and the GOP knows(the Neo Cons/RINOS) the JIG Is now up.

These folks are going to be held accountable, and this EVEN if it were to ALL get mo better, is not going away.The entire next 2yrs could be taken up reversing BAD laws, and holding trials, and hangings.

Business as usual is History in D.C.,if things are not changed radically polish up the sights on your smoke pole. Sure it will take getting Obummer stopped, after that.......a new Sherrif is in  town.

You do not lose 30%+ of the voting block, and continue bidness as usual, or you will have a 3rd party on your hands, and you never win another election.

Fri, 10/29/2010 - 19:10 | 687084 Shameful
Shameful's picture

I'll believe it when I see it. I don't hear a lot of these candidates calling for an end to the wars, or to ending the Fed. I expect the same thing we got in 94, a big bag of nothing.

The GOP can play them still, even Rove said this. They have no choice. You say third party, good luck. Both blues and reds will unite to make it a bureaucratic nightmare (See Oklahoma). Remember both "parties" would unite to fight them, and then we are back to splitting the vote at best. And lets say there is a 3rd party, how hard would it be to co-opt? And how long would it take to build a viable 3rd party? The looting operation is in full gear and we could collapse before 2012. And if the people are not heard what will they do, march on Washington, because that's what it would take. Most don't think they are represented and the approval rating for congress is silly low, and still nothing from the masses.

Voting never solved anything, otherwise it would be illegal. And then there is yummy voter fraud. Speaking as an IT guy, with electronic voting expect it to be rigged. Every fellow developer I've talked to has said they would be stunned if there was not back doors in it. There are already instances of blatant fraud happening, when a pro would do it all on the back end on save.

Not trying to be Mr. Negative, but we are in a world of trouble and it would take years to build awareness to fight both parties. Years I don't think we have.

Fri, 10/29/2010 - 19:59 | 687178 Miles Kendig
Miles Kendig's picture

The tea party is just one more reminder that another KT layer is forming

Fri, 10/29/2010 - 22:47 | 687489 StychoKiller
StychoKiller's picture

As someone else already stated:  "Third party?  How about a genuine Second Party?"

Sat, 10/30/2010 - 12:15 | 687973 macholatte
macholatte's picture


And lets say there is a 3rd party...


There IS a 3rd party called the Progressive Party and it owns the White House, the Congress, the Supreme Court, the Democrat Party and the Republican Party.

They have their own federally funded caucus and here are the Members:


See Also Fabian Society whose logo is a wolf in sheep's clothing.


Sun light and fresh air will kill these germs.


Always remember the first rule of power tactics; power is not only what you have but what the enemy thinks you have.
Saul Alinsky


Fri, 10/29/2010 - 18:56 | 687058 DosZap
DosZap's picture


Fri, 10/29/2010 - 16:38 | 686723 HarryWanger
HarryWanger's picture

So once again we get another "wait until next month for a reversal" with a side order of "QE2 baked in".

Listen, every and I mean everybody on the Street is uttering the same "baked in" scenario. Tough not to be a contrarian on this one. I still think QE2 will spark a big spike higher in the market. 

Fri, 10/29/2010 - 17:06 | 686803 Bill Lumbergh
Bill Lumbergh's picture

If the dollar weakens further then you are probably correct otherwise watch out below.

Fri, 10/29/2010 - 22:51 | 687499 doolittlegeorge
doolittlegeorge's picture

apparently "watch out above" as well.

Fri, 10/29/2010 - 18:43 | 687031 razorthin
razorthin's picture

I suspect you are correct.  My reason has capitulated now, and I am beginning to believe the market never corrects again.  Until I also abandon the notion that my own capitulation might also signal a top, I'm sure it will march on.  Hmmm..Am I sure? ....YES! I am sure (fingers crossed).

Fri, 10/29/2010 - 16:41 | 686725 JimboJammer
JimboJammer's picture

Flash  Crash  of  Nov  2010 ..... 

point  the  mouse  and  click >>  Sell

I  like  Dow  Chemical  Stock ,  I  would  buy  some

when  it  gets  to  $  3.80  /  share

Fri, 10/29/2010 - 18:00 | 686932 dehdhed
dehdhed's picture

i dunno, seems like the new line in the sand for the dow has been drawn at 11k just like when it was around 10k

Fri, 10/29/2010 - 22:48 | 687492 StychoKiller
StychoKiller's picture

Too late!  I withdrew ALL the funds from my Schwab IRA this Wednesday.

Fri, 10/29/2010 - 16:41 | 686726 JimboJammer
JimboJammer's picture

Flash  Crash  of  Nov  2010 ..... 

point  the  mouse  and  click >>  Sell

I  like  Dow  Chemical  Stock ,  I  would  buy  some

when  it  gets  to  $  3.80  /  share

Fri, 10/29/2010 - 16:40 | 686727 JimboJammer
JimboJammer's picture

Flash  Crash  of  Nov  2010 ..... 

point  the  mouse  and  click >>  Sell

I  like  Dow  Chemical  Stock ,  I  would  buy  some

when  it  gets  to  $  3.80  /  share

Fri, 10/29/2010 - 16:49 | 686753 Sudden Debt
Sudden Debt's picture

more or less between >2011<2923

they also predict that in those 912 years, something bad could happen.

We'll see...


Fri, 10/29/2010 - 16:53 | 686763 doolittlegeorge
doolittlegeorge's picture

"control the money control the government."  that would be the House and not the Senate.  Since "the war drums" are being pounded all out now "new dollars will be powerful things."  cut spending 20% across the board?  from whence come "the borrowings"?  we're right back at Square One.  The banks and Wall Street.  Goldman has been rallying all out "and now we know why."  As they say in Crew "our wake, your funeral."  Don't get caught "in the way of the war."  That of course and ESPECIALLY includes "war talk."

Fri, 10/29/2010 - 17:02 | 686785 patience...
patience...'s picture

Benny won't change his position until forced to do so,

just to save face.

Fri, 10/29/2010 - 17:04 | 686794 frankoo
frankoo's picture

There is no more dangerous animal than a cornered governmentl

Fri, 10/29/2010 - 17:07 | 686807 ShowMeTheTime
ShowMeTheTime's picture

Great article.  I have never heard the Ron Paul on the subcommitttee theory...gee, I wonder why "green shoots" CNBC didn't pick this up.


Very interesting...lets see how it plays out come Nov/Dec...

Fri, 10/29/2010 - 17:14 | 686826 RobotTrader
RobotTrader's picture

The  real "flash point" is when stocks rally again next month, leaving even more short-sellers flat-flooted with their mouths agape.

Bears are already aghast at how the car business is booming despite all the reports of a "double dip"...

Fri, 10/29/2010 - 17:28 | 686854 Bill Lumbergh
Bill Lumbergh's picture

The real "flash point" will be when Robo is left holding the bag on all his boner chart stocks...

P.S. - Please do not stop are one of the few posters who continually provide me amusement.

Fri, 10/29/2010 - 18:08 | 686946 dehdhed
dehdhed's picture

is that your real picture? or are you really a woman?

no offense .. just saying

as my buddy jerry used to sing, 'can't talk to you without talking to me, we're guilty of the same old thing'

Fri, 10/29/2010 - 18:19 | 686970 Bill Lumbergh
Bill Lumbergh's picture

Is that your real picture or are you really a fruit loop teddy bear?

Sat, 10/30/2010 - 22:28 | 687024 dehdhed
dehdhed's picture

you know it brother

Fri, 10/29/2010 - 22:51 | 687498 StychoKiller
StychoKiller's picture

"I need a woman 'bout twice my height!  Statuesque, really dressed -- a Goddess of the night!  One more thing I just got to say:  I NEED A MIRACLE EVERY DAY!" -- Grateful Dead

Fri, 10/29/2010 - 22:56 | 687513 doolittlegeorge
doolittlegeorge's picture

don't stop holding your boner, either.  if you get tired "ask the girl next to you if she can hold it for you."  if she does and you wish ask her "so, how does it feel to get caught holding."  i make no gurantees as to what happens next as "bulls and bears make money."  just remember "pigs get slaughtered" and "you're especially vulnerable with this trade." 

Fri, 10/29/2010 - 18:35 | 687017 razorthin
razorthin's picture

Yes it is true, there are still too many credit-hungry suckers to convince any more than a few that the can must be picked up.  Eventually, the can will find a cliff.

Fri, 10/29/2010 - 17:36 | 686878 StarvingLion
StarvingLion's picture

"Chief Investment Officer"


Fri, 10/29/2010 - 17:54 | 686920 desgust
desgust's picture

Who the fuck initiated TARP I ?

Wasn't Hank Paulson a rep????

You are being played by your dirty reps identically as by the dems.

I can't believe it that you are so credulous.

There is no difference between dems and reps! They both will fuck you all the same so prepare yourself and stockpile some vaseline! Pronto!

Fri, 10/29/2010 - 22:53 | 687501 StychoKiller
StychoKiller's picture

If the terms of G.W. Bush didn't drive home your point, there's just no hope for the Ignorati!

Fri, 10/29/2010 - 18:27 | 686992 razorthin
razorthin's picture

Unfortunately, it will take many more than you and a few libertarians to take me seriously, TD.  But that's change we can hope for.

Sat, 10/30/2010 - 00:12 | 687610 Best Satan in Town
Best Satan in Town's picture

Are you the real Ron Paul?

Fri, 10/29/2010 - 19:05 | 687080 trav7777
trav7777's picture

not buyin the OP...the GOP was in fuckin power for most of the decade and the last liquidity crisis brought us a massive rate cut climate.

There is no room to raise rates now, NONE.  Creating more compound interest drag on the money supply would be implosively fatal.  It's the opposite of what the Fed's metrics are telling it.  They have to find a way to engineer more sharply negative real rates.

Fri, 10/29/2010 - 20:33 | 687236 Al Gorerhythm
Al Gorerhythm's picture

Your historic reference is somewhat limited. Try starting from about 1913 onwards.Inflation IS the means of decreasing the real interest rate. It's probably about -4% at the moment.

Fri, 10/29/2010 - 22:59 | 687519 doolittlegeorge
doolittlegeorge's picture

cue to "foiled terrorist plot."  stick with GLD.

Sat, 10/30/2010 - 05:21 | 687761 ZeroPower
ZeroPower's picture

The GOP isn't solely to blame - thats what the current admin is doing now, and blaming the past isn't exactly future election material.


However, totally agree anyone who believes a rate hike is coming anytime soon is off their rocker - any slight attempt at raising rates in a still fragile economy will derail the past 2 years of attempts are bringing us into the +

Perhaps USD devaluation IS the only way to go..something the admin is doing surprisingly well.

Fri, 10/29/2010 - 19:19 | 687108 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

It was actually Marc Faber who first compared Bernanke to Hitler as Hitler wrote in Mein Kampf what he intended to do, years before he actually did it,Bernanke made his famous printing press speech EIGHT years ago and people are only now starting to wake up to the fact he is actually going to do it.

There are even people who still think he won't do it or will only produce a mere trillion.Bernanke is a money printer,he sees it as the only course to follow to prevent the US economy following the path Japan followed following the bursting of its bubble economy in 1990.

Ron Paul,the Tea Party - nobody is going to stop him,it starts next Wednesday.And when its stimulative effects are starting to wane there will be another,and another and another, each one bigger than the last.Politicians will be begging the Fed to print more money by then,not trying to stop them,as people will no longer be able to afford food/gas etc etc.What politician is going to say stop when there is looting and riots on the street every night?

Fri, 10/29/2010 - 19:31 | 687126 Shameful
Shameful's picture

People will not believe things that do not fit into their world view.  So when they see someone who has spelled out a future course of action that will be taken given the chance, they will ignore or discount it.  "Oh he really didn't mean that" "I'm sure he wouldn't do that".  Seems pretty common among people.  Self delusion is a powerful thing.

It also gives the author a lot of power.  When they take such an action they can point to all that it was well documented and any who wished to know about it would know about it. 

Fri, 10/29/2010 - 23:01 | 687525 doolittlegeorge
doolittlegeorge's picture

"Ludicrous speed, captain.  LUDDIIIIICROUS SPEED!"

Fri, 10/29/2010 - 20:29 | 687241 Al Gorerhythm
Al Gorerhythm's picture

Ron Paul has been calling for the Fed to stop since his maiden speech to congress. Can't see him changing his tune.

Sat, 10/30/2010 - 11:41 | 687944 i-dog
i-dog's picture

"calling for the Fed to stop since his maiden speech to congress"

Oh, that's encouraging ... he has been calling for the Fed to stop for 34 years, yet they are still printing like crazy. But, any day now,.........

Fri, 10/29/2010 - 19:54 | 687171 Miles Kendig
Miles Kendig's picture

JT, if the republicans gain power, either partial in '10 or complete in '12 the results will echo Cameron's efforts and QE will be the underpinning of "austerity" making a lie of the concept.

Fri, 10/29/2010 - 20:25 | 687196 treemagnet
treemagnet's picture

Its Friday night, its been a long week, I'm loaded for bear with VXX, I'm more clenched than a crabs ass cause it could go either way, and I could not have read a report that I agree with more and/or believe in.  I'm stopping here tonight folks, its time to drink expensive beer bought with worthless fiat currency and watch the University of North Dakota "Fighting Sioux" kick the shit out of the Denver Pioneers at the only sport that really matters - thats hockey, folks.  Good night all.

Fri, 10/29/2010 - 20:42 | 687270 Common_Cents22
Common_Cents22's picture

Reports say HFT is 40-73% of the volume.  If so, especially the upper end, why would ANY external events, economic news etc...even phase the market?  It has taken a new life on its own completely disconnected from reality.  The only thing that rules is nano term price action.

Fri, 10/29/2010 - 20:56 | 687312 Sherman McCoy
Sherman McCoy's picture

Who the is John Taylor? Does he ever make money? I'm long and in the black. What, your'e sitting in cash? Loser!

Fri, 10/29/2010 - 21:53 | 687404 Paul Bogdanich
Paul Bogdanich's picture

The Republicans are going to reign in the bankers?  Oh that's funny.  Who is this freaking idiot.  Did he not watch who it was that killed the Volker Rule?  Who it was that viciated the SEC, FINRA and vrtually every other regulator you care to mention.  Yes of course one new CONGRESSMAN is going to change everything.  Now don't get me wrong we can only hope but if Mr. Paul wins I doubt whether he even gets the sub-committee gavel let alone the ability to change anything. 

Fri, 10/29/2010 - 22:06 | 687417 DR
DR's picture

The Republicans want a Republican prez in office for 1212 and will need a performing economy. They aren't going to risk recession for the sake of fiscal austerity. Expect lots of tough talk with very little action….

Fri, 10/29/2010 - 22:57 | 687511 StychoKiller
StychoKiller's picture

News flash!  We'll be lucky if the US/World Economy can continue limping along until 2012!

Sat, 10/30/2010 - 11:01 | 687923 Rogerwilco
Rogerwilco's picture


On the contrary, I think they would like to see a real economic shit storm with Obama taking most of the blame. It's also a perfect cover for Bernanke to get right with god and climb out of the hole he's in.

Sun, 10/31/2010 - 21:55 | 689766 BigJim
BigJim's picture

Wouldn't that give the Dems the opportunity to just point and say: "Look! Look what happens when you elect the Republicans!"

Fri, 10/29/2010 - 22:58 | 687514 fiddler_on_the_roof
fiddler_on_the_roof's picture

My hunch is the OP John Taylor is wrong and Biggs will be proven right. DOW will dip to around 10700 during next week and then rocket higher till Mid December. Then I don't know. We can wait and see and put tight stop loss. until then I am long.

Fri, 10/29/2010 - 23:49 | 687589 SpeakerFTD
SpeakerFTD's picture

I'm not saying you are wrong, but this whole mindset amazes me.

I can't find a single bull who is bullish for any fundamental reason.  Pretty much all of them are long either for

a) mo-mo reasons

b) conspiracy "the market will not be allowed to fall" reasons

c) hedge dollar weakness reasons

and primarily d) The Fed will print as much as is necessary to keep the stock market bouyant

These are all valid short-term trading reasons, but they are also the reasons that underpin much of the commodity strength. 

The problem for me as a trader, from a risk management perspective, is that if (c) or (d) are found to be false assumptions, (a) will reverse, and there will be no bid at all in the market.   Maybe you escape before the tsunami hits, but I am pretty far down the information vine, nor do I operate on a nanosecond basis, so I have to assume that by the time I understand the situation, the lifeboats will have long been overloaded with faster hands.  

Being short might be foolhardy, but I happen to think the gap risk is worse for the longs.   In any case, good luck to longs and shorts, but I am in cash with a small bit of PM.  I just can't see much value in betting my capital in playing Kremlinologist to Czar Bernanke.

Sat, 10/30/2010 - 06:27 | 687771 PeterB
PeterB's picture

In the country of the blind, the one eyed man is king

Sat, 10/30/2010 - 10:02 | 687883 fiddler_on_the_roof
fiddler_on_the_roof's picture

Speaker : I am neither a trader nor an economist but rather a pessimist with slight conspiracy theory believer. I have a day job and in my spare Time trying to study "what is Money" for the past 4 years. I bet on horses once a year for the Kentucky derby just 15 mins before the race starts and bet on the lowest odds(highest payout) 5 horses with couple of good horses and have consistently won or break even. What does that tell you ? The organizers of the derby want max profit and common folks will collectively lose and the odds payout are arranged like that.

I am using some parameters which is telling me that there is some serious problems coming down the pike starting next year Jan 2011. I am thinking The dollar and stocks go down together starting mid dec 2010. My Gold is my only real investment which are nearly 60% of my assets, the rest are in 401k and house which I cannot cash out. I don't like silver or other PM's because unlike Gold they donot have a firm underneath bid from Asian and Indian population who are not the easily scared variety and hold and intrinsic value for Gold in their mind unlike West where a manipulated Gold can shake belief since they have none in their mind. Silver does not have such benefits.

I have been able to pick the mar 2009 bottom and avoided the 2008 meltdown. My returns are good and I don't have any info access.

Sun, 10/31/2010 - 10:54 | 688857 RockyRacoon
RockyRacoon's picture

Yeah, but...   They sure like silver in Mexico and have promoted a silver-backed currency.  Since they are closer, what the hell.  Go for it!   And they have some nice beaches.  I'll wager that when the drug lords gain control of the entire country they'll run it like a benevolent dictator.   Uh-huh. where is that sarcasm button...

Sun, 10/31/2010 - 22:02 | 689780 BigJim
BigJim's picture

My understanding is that the appeal of silver is that there's a real supply squeeze coming down the pike. The price has been manipulated downwards for years by the bullion banks and they're going to run out of physical. Also, the SEC appears to be breathing down their necks.

The unappealing thing about silver is that it's not really considered a monetary metal any more, and wouldn't be a good monetary metal because it's primary consumption is in industry. So if there is a crash the price could plummet.

I have some physical, and also a position in paper silver; I'm holding onto the physical, but I'm tempted to sell the paper silver before the announcement on Weds in the hope of buying it cheaper if there's a crash.

Comments welcome.

Mon, 11/01/2010 - 03:38 | 690021 Temporalist
Temporalist's picture

Not that I think there is anything wrong with going just gold but to base it on Asia, of which India is part btw, not having the same interest is wrong and to help you think like me all you have to ask yourself is do they love gold for its monetary and industrial uses or for mystical properties.  If it is mystical properties than you should realize that silver would have the exact same appeal if not more as it is more reflective and has anti-bacterial properties.

But if that isn't enough, silver was money in China a couple thousand years ago and the Japanese yen was originally 24.26 grams of silver.  The silver coins of Japan were actually modeled after the Spanish Dollar from the Spanish Pieces of Eight, 8 real coin, which is where the present U.S. dollar gets its name.

Sun, 10/31/2010 - 08:13 | 688796 Goldenballs
Goldenballs's picture

The more they do,the more confidence evaporates,the more ordinairy people see stability disappear,the more they move away from investments in the state and its mechanisms.People will continue to vote with their free money and savings out of the system,the system,bankers,politicians and regulators have totally failed the people. 

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