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The Market Is Like A Child In Search Of Santa Claus

Tyler Durden's picture




 

We have all heard the saying that the market is like a bug in search of a windshield. Today, courtesy of Peter Tchir we proposed another one: the market is like a child in search of a Santa Claus (and Bernanke will likely be the jolly fat man).

From Peter Tchir of TF Market Advisors

Today felt like one of those family channel movies that come out around Christmas time.  The child of parents who are down on their luck asks Santa for a shiny new bike they just can't afford.  The parents spend the rest of the movie working extra shifts, selling knick knacks, anything they can, just so the child can get that bike.  When even that is not enough, the neighbours pitch in, the people at the bike store help out, and in the end the child gets the bright shiny new bike with a ribbon on it beside the Christmas tree.  It always brings tears to my eyes when I watch those movies.  I admit I'm a sucker for them. So yes, all Hollywood movies, especially the made for TV kind, end happily.

So what does that have to do with today's market action?  Well, just like the child in that movie, the markets are waiting for the ECB or FED or both, or Santa Claus, to announce some new program to stop this horrific decline of a couple percent in the market.  Smart money is betting that the ECB, FED, or some other government agency will step up and give us a reason to rally.  The data shows that the economy is taking a leg lower.  Very few of the 'macro' problems have been fixed.  Japan is still spewing radiation.  MENA, with the possible exception of Egypt is worse than ever.  Killing Osama eliminated one man, only to expose the potential danger from a nation, that we half considered allies while never trusting them or treating them well.  The PIGS are back at the trough with their unending appetite for cheaper debt.  We are using accounting tricks to keep exactly 25 million under our debt ceiling until at least August 2nd (or whatever date that Tim deems appropriate).  Against the logic that things are getting worse and nothing has worked, is the Pavlovian response that governments bailout the markets and it is stupid to bet against a fresh round of stupid intervention.  On data alone, the market would be lower, but we are so conditioned to expecting support at every crisis that no one is willing to miss the next rally.  We all know St. Nicholas comes on December 25th, and we all know Trichet, Ben, and crew come every time the Dow drops 3%.

Away from the hope that some 3 letter agency will fix our 4 letter problem, there is very little reason to be buying the market here.  Well, for better or worse, as bearish as I am, I am forced to be cautious on the off chance that Santa does exist and he, or some magician, pulls a rabbit out of their hat and save us from the current crisis.   In the meantime, don't watch the Tin Drum, if you want to keep alive the Hollywood illusion that all gifts are good.  Nor do you want to figure out what happened to those parents who worked themselves to the bone to get the bicycle, only to find out that the kid wanted an even bigger present on his birthday next month.

Sorry, for the lack of details, but today felt like an emotional day in the market, and really the first day in a long time that only the hope of government intervention prevented a major sell-off.  The last time this much faith was placed in the government, the S&P was dipping below 1,000 in overnight trading.  Maybe we have another 300 points of upside from here, but it is hard to believe that history will repeat itself.

 

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Mon, 05/23/2011 - 18:55 | 1303323 mynhair
mynhair's picture

The child gets a shiny new bike, and promptly crashes it into a tree.

Mon, 05/23/2011 - 19:00 | 1303337 Sheriff Douchen...
Sheriff Douchenik from AZ's picture

Then the child receives a 2nd new bike from the parents. Telling the child it was the trees fault for being there.

Mon, 05/23/2011 - 19:18 | 1303377 andybev01
andybev01's picture

Those movies always make me cry as well but because I understand that that's not the way it works out in real life.

The kid gets a carton of Marlboro's and dad tells him to smoke up!

*BTW: is the CAPTCHA on vacation this week, and his second-grader sibling is filling in?*

Mon, 05/23/2011 - 19:29 | 1303406 mynhair
mynhair's picture

Captcha must be on vacation.  You got in.

Mon, 05/23/2011 - 22:34 | 1303975 andybev01
andybev01's picture

...despite your best effort,

Mon, 05/23/2011 - 20:00 | 1303529 willien1derland
willien1derland's picture

You neglected to mention the box of never-ending checks, credit cards without limits & the Bernanskter perpetual GET OUT OF JAIL FREE card (Lloyd Blankfein Limited edition is the top of the line) - Betcha DSK would have LOVED to have one, huh?

Mon, 05/23/2011 - 18:59 | 1303326 XenoFrog
XenoFrog's picture

What could go wrong? *shrug*

Mon, 05/23/2011 - 20:32 | 1303632 HarryWanqer
HarryWanqer's picture

Some of you sound like Jewish kids on Christmas.  Solemn and bitter.  Excuse me while I'll back my truck up and take us much from Santa as I can get.  QE 3 is fine by me.

Mon, 05/23/2011 - 19:00 | 1303328 GlassHammer
GlassHammer's picture

"But there's no sense crying over every mistake.
You just keep on printing till you run out of ink.
And the Economics gets done.
And you have a bank run.
For the people who are still alive."

Now if only I can get some children to sing this little alteration to the "Still Alive" song.

Mon, 05/23/2011 - 19:04 | 1303340 XenoFrog
XenoFrog's picture

The cake isn't a lie, but due to inflation it is going to cost you $42,408,830

Mon, 05/23/2011 - 19:13 | 1303369 disabledvet
disabledvet's picture

can't say "let them eat cake" with that bill.  How about "just for you m'lady" though?

Mon, 05/23/2011 - 19:03 | 1303333 longorshort
longorshort's picture

Last thing to go through a bugs mind as hes hitting your windshield is his butt.  So watch Spain I guess.  Spains not gonna take it, no their not gonna take it, Spains not gonna take Germany's crap no more.

Mon, 05/23/2011 - 23:04 | 1304057 holdbuysell
holdbuysell's picture

Twisted Sister?

Mon, 05/23/2011 - 19:01 | 1303343 buzzsaw99
buzzsaw99's picture

bennie hasn't missed a shipment yet.

Mon, 05/23/2011 - 20:19 | 1303594 Freebird
Freebird's picture

Yes. Berwanker Global Logistical Services Inc.

Mon, 05/23/2011 - 19:05 | 1303344 Atomizer
Mon, 05/23/2011 - 23:49 | 1304142 jeff montanye
jeff montanye's picture

a silver lining, i guess, to obama is the, perhaps cynical, radicalization of republican populists (to use the terms loosely).  net, perhaps it helps ron paul.

Mon, 05/23/2011 - 19:04 | 1303346 Cthonic
Cthonic's picture

Ever notice how the great chairsatan resembles Pavlov? It's ultra-paradoxical that they both showed such keen interest experimenting with transmarginal inhibitionism, too.

Mon, 05/23/2011 - 22:50 | 1304026 williambanzai7
williambanzai7's picture

Your observation will be rewarded.

Mon, 05/23/2011 - 23:57 | 1304158 jeff montanye
jeff montanye's picture

until recently it seemed "ultra-paradoxical" that such negative stimuli to the world's economies received such positive reactions from its stock markets.

Mon, 05/23/2011 - 19:05 | 1303353 Jack Mehoff
Jack Mehoff's picture

Yeah, it's messed up. You have to dance to "their" tune. Either go long equities and bonds or short commodities. Fundamentally, neither makes sense, but that's what the invisible hand is telling us to do. Until they lose their grip, we are stuck waiting. 

Mon, 05/23/2011 - 19:05 | 1303357 longorshort
longorshort's picture

Be funny as shit of if the CIA put the Federal deficit and Bernaks personal credit card bill. 

Mon, 05/23/2011 - 19:17 | 1303380 Rainman
Rainman's picture

That OBL head shot should have been worth +500 points. That's a key indicator. It's all about the Bernank now and forever.

Mon, 05/23/2011 - 19:19 | 1303388 anti Oligarchy
anti Oligarchy's picture

It seems like even the government doesn't care this time around.  Don't they realize that if they let the economy go down now it won't recover in time for 2012?  Or do you supppose that both parties are in on the game?  Let's see, if we don't put up a fight for the presidency, then Obama will keep the status quo intact.  We'll all get richer, wage more wars, and kick the can.

 

Pretty bad when even the government stops even trying to act like they care about people.

Tue, 05/24/2011 - 01:07 | 1304225 dolly madison
dolly madison's picture

Yes, they are most definitely both in on the game.

Mon, 05/23/2011 - 19:25 | 1303389 slewie the pi-rat
slewie the pi-rat's picture

this is a weak poor people and bike story, but tyler is a sucker for deus ex machina endingZ.  we freaking know that.  so, no harm, no foul.  but Tchir must buy a vowel!

 

Mon, 05/23/2011 - 19:28 | 1303412 bob_dabolina
bob_dabolina's picture

euro is shi-tt-ing

Mon, 05/23/2011 - 19:42 | 1303452 Hedgetard55
Hedgetard55's picture

Who knew that Santa was a fallen away Jew with the middle name Shalom???

Mon, 05/23/2011 - 20:06 | 1303565 AUD
AUD's picture

Smart money is betting that the ECB, FED, or some other government agency will step up and give us a reason to rally.

Not just the smart money, though the smartest money buys lowest & the rest follow. The dumbest money is the one hitting the highest offer...... that'll be the central bank, using your bank account.

 

Mon, 05/23/2011 - 20:15 | 1303583 Dolemite
Dolemite's picture

http://deadcatbouncing.blogspot.com/
Equities at a very important crossroads

Mon, 05/23/2011 - 20:14 | 1303591 AmazingLarry
AmazingLarry's picture

I have full faith in the colony of Plunge Protection Team elves up at the North Pole.

 

Mon, 05/23/2011 - 20:15 | 1303592 Billy Shears
Billy Shears's picture

My old economics professor used to sum-up FED monetary policy and the corresponding business cycle (ie. boom/bust) as somesuch insanity as: "it's a crazy man who keeps hitting himself in the head with a hammer because it feels so good when he stops." I'll never forget that one, it made a real "impression" on me. It is admittedly the essence of the definition of institutional insanity in my opinion.

Mon, 05/23/2011 - 20:17 | 1303599 sellstop
sellstop's picture

Yes, there should have been more volume today. It was strange. I didn't see much buying, but I didn't see that heavy of selling.

sometimes the market just goes on a low volume meltdown for a few weeks, but usually it is after some serious selling.

Don't add more shorts....

gh

Mon, 05/23/2011 - 20:24 | 1303612 zen0
zen0's picture

He says MENA is bad except for Egypt.

??????????

 

Spengler (David Goldman at Asia Times) thinks Egypt is poised for starvation. He makes a good case.

Mon, 05/23/2011 - 20:55 | 1303719 zen0
zen0's picture

Hah! I just realized. The market is more like Santa Claus in search of a child....in a pedopheliac sense, of course.

Mon, 05/23/2011 - 21:13 | 1303769 downwiththebanks
downwiththebanks's picture

"The Free Market" = Santa Claus

Capitalism requires state intervention to rob, rape and pillage.  Always has, always will.

Mon, 05/23/2011 - 21:24 | 1303790 Atomizer
Atomizer's picture

Capitalism requires state intervention to rob, rape and pillage. Always has, always will.

One day you will see the forest thru the trees. Meanwhile, carry on with you thoughts.

Mon, 05/23/2011 - 22:22 | 1303927 downwiththebanks
downwiththebanks's picture

Until then, I suppose Big Capital will continue to build drones, landfills, and prisons.

Onward, 'Civilization!'  

Mon, 05/23/2011 - 21:21 | 1303788 Arkadaba
Arkadaba's picture

Still attracted to this place:

http://www.youtube.com/watch?v=KrPOKNU5Ds4

Mon, 05/23/2011 - 21:24 | 1303795 molecool
molecool's picture

"We all know St. Nicholas comes on December 25th, and we all know Trichet, Ben, and crew come every time the Dow drops 3%."

And DSK comes every time he visits NYC... ;0)

Mon, 05/23/2011 - 21:34 | 1303809 HileTroy
HileTroy's picture

I have found my people!!

When the hell is Operation Mayhem gona start??

God must hates trailer parks and the mid west and he must not have got the memo that Judgement was on Saturday.

 What ever happened to the Nuke thing in Japan, or Alabama being wiped out or the Mississippi flooding , or all the nice young men in the middle east chucking rocks.  At any rate you guys rock and the post make me laugh and I don't laugh much any more.I have my resume out for " Leader of the Revolution"

I smell a bail out for the insurance companies as they shat them selves over each and every new natural disaster. Hmmm me thinks this will this will knock a few % points out of GDP.

 

"If we score the most points we have a good chance of winning"

 

 

 

Mon, 05/23/2011 - 22:41 | 1303989 Broomer
Broomer's picture

Today felt like one of those family channel movies that come out around Christmas time.  The child of parents who are down on their luck asks Santa for a shiny new bike they just can't afford.  The parents spend the rest of the movie working extra shifts, selling knick knacks, anything they can, just so the child can get that bike.  When even that is not enough, the neighbours pitch in, the people at the bike store help out, and in the end the child gets the bright shiny new bike with a ribbon on it beside the Christmas tree.  It always brings tears to my eyes when I watch those movies.  I admit I'm a sucker for them. So yes, all Hollywood movies, especially the made for TV kind, end happily.

Except when the child lives in Africa. Or Detroit.

Tue, 05/24/2011 - 00:12 | 1304169 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

Have a strong suspicion the shorts are going to get a squeeze over the next couple of sessions. Cannot see it overly brutal though (1335-1340), and by end Friday see it at 1300ish...juss sayin'

Tue, 05/24/2011 - 05:02 | 1304383 Roger Knights
Roger Knights's picture

That would fit the pattern of the past two years.

Tue, 05/24/2011 - 08:07 | 1304497 oogs66
oogs66's picture

yeah, though I'm surprised the PIG debt isn't getting a bounce today after the smacking of the past few days.

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