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More Observations On The Federal Reserve Buying Stocks

Tyler Durden's picture





 

TrimTabs' Charles Biderman makes another appearance, this time on BNN, discussing "circumstantial evidence" of the Fed's goosing of stock markets. And yes, the debate of who is buying futures consistently takes front and center position. Liberty 33 - your move: feel free to refute any and all claims presented by the TrimTabs CEO. 

 

 

 


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Mon, 01/11/2010 - 12:43 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

 

A member of my extended family is considering a run for state representative.

In a fairly animated conversation over a marvelous holiday spread he decried a story on how job openings for shipbuilding in Norfolk were going unfilled because there were not enough applicants.

We agreed to disagree as to the cause while agreeing on the effect; he blamed the applicants, your humble raconteur blamed the role models.

Valuation by page views, suitcases of cash to fight proxy wars, deficits that don't matter ... past gospels that have been crushed on the shores of reality are more than just tales of past hubris, they are causes of our current woes. 

Don't blame the player, blame the game? 

How about blame both? While the chattering class bemoans the counterproductive 'populism', and wait for it ... blames the victim for the crime ... might it also be appropriate to consider that lies and their derivative actions have consequences?

If the custodes are given a free pass on propriety and sobriety why should we suppose that the great unwashed won't look to achieve the same notoriety?

What the heck collect a check. 

Strategic default cause it ain't my fault. 

Scam I am.

The American Dream as American Scheme.

It's back to the last start of a century, the difference being that America then was a start-up on the international scene as opposed to being now, let us say, a stumbling front-runner. 

The augury of markets, tis leading or lagging? ... For the folks in Peoria, in truth 'tis just nagging.

Few of my friends or relatives understand what a derivative is, what NSA means, what hedonic imputation references, what a benchmark revision signifies ... but they are thoroughly convinced that the system is rigged. 

Thoroughly convinced.

Put that into your econometric black box and the 'social fabric' punch card that will pop up will be riddled with holes.

Change we can believe in is like a jobless recovery ... learned helplessness leads to cognitive dissonance and the combination therewith results in cognitive helplessness and learned dissonance.

 

Mon, 01/11/2010 - 13:59 | Link to Comment Clampit
Clampit's picture

Well put.

I've heard arguments that we are now a white collar nation, that we will design the products others produce and live happily ever after. Hogwash. Anyone who has actually done product development first hand will tell you that Apple's ability to design top notch products in California is predicated on decades of producing top-notch products in California. Without the latter, the former with wither away within a generation or two.

And as for who pays for the casino, there is a reason behind the pension to 401k movement....perhaps people saw early on that games between seasoned professionals generally end in stale mate. 

 

Mon, 01/11/2010 - 21:21 | Link to Comment Anonymous
Tue, 01/12/2010 - 00:20 | Link to Comment Problem Is
Problem Is's picture

"I've heard arguments that we are now a white collar nation..."

If those wearing wife beater t-shirts and Palin McMILF are white collar...

Then yes Amerika is a white collar nation...


Tue, 01/12/2010 - 00:14 | Link to Comment andy55
andy55's picture

Lovely as always, AM.

Mon, 01/11/2010 - 12:47 | Link to Comment Gimp
Gimp's picture

I concur, yes the system is rigged. A 40 year veteran trader on Wall Street once told me "Who do you think pays for all of those fancy buildings on Wallstreet? You do!   Once you understand this simplest of economics you understand the system.

Mon, 01/11/2010 - 13:24 | Link to Comment El Hosel
El Hosel's picture

 Seems pretty clear that "they" are buying stocks with money they don't have (and among other things selling gold that they do not own)  to create the perception of the markets they want. Why can't more people can see through this or at leat ask the right questions?

Mon, 01/11/2010 - 14:07 | Link to Comment Anonymous
Mon, 01/11/2010 - 12:49 | Link to Comment pros
pros's picture

Insiders dumping bad paper to the government...

another version of the looting that has prevailed in the rigged markets...

 

eventually those insider trades will be rescinded and Geithner/Bernanke can read about it from Federal Prison.

Mon, 01/11/2010 - 22:38 | Link to Comment ozziindaus
ozziindaus's picture

Agree. Like Fannie and Freddie government securitization (nationalization), the equity markets have been kept afloat in the same manner.
Has the gov. stabilized housing, AIG, Detroit? NO. So why did it work so well for equities? Because it is a demolition in slow motion. Wave 3 down will prove that.
Isn't this information available through DTCC? Just like naked short selling, what if there is a naked long buying program?

Naked short selling=phantom stocks sold short for real gains
Naked long buying=real stock bought long with phantom money

Sounds plausible to me in this market.

Mon, 01/11/2010 - 12:55 | Link to Comment Anonymous
Mon, 01/11/2010 - 13:00 | Link to Comment Anonymous
Mon, 01/11/2010 - 13:02 | Link to Comment Anonymous
Mon, 01/11/2010 - 13:39 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Barry Ritzholtz has his stupid head in the sand.

Mon, 01/11/2010 - 14:32 | Link to Comment deadhead
deadhead's picture

I read Barry's column that day and went through the responses.

Barry, I know you check in here and all I can say is that I am stunned at your position. I think you are a bright guy but am literally astounded at your position.

even bob heller has essentially admitted the futures nonsense.

 

Mon, 01/11/2010 - 21:25 | Link to Comment Anonymous
Mon, 01/11/2010 - 23:52 | Link to Comment Cursive
Cursive's picture

I quit frequenting Ritholtz's site after he chickened out about testifying before Congress.  Either a complete and utter puss or a self-absorbed hedge fund manager.  Either way, he's a sell-out to his countrymen and those who would prefer freer markets and less corruption.

Mon, 01/11/2010 - 13:11 | Link to Comment Anonymous
Mon, 01/11/2010 - 13:55 | Link to Comment Big Red
Big Red's picture

Damn, I must have screwed up. Please advise me, although it's too late.

On January 4, I advised the "manager" of my IRA (rolled-over 401(k)) that I wanted to cash/close out, and they proceeded to sell. (My IRA was back to being about 9x% of its value prior to the happenings of last year). The check should be in the mail as we speak.

You see, I am 58, and figure that over the next years, I'd rather take the tax hit in 2010 (perhaps offset by some heavy tax itemizations, although I can forego that possibility) and walk away with all that I can, than either see (end-of-year forewarned) stories like those links noted above come true, or, that the money is just plain untouchable as this country unfolds all its new surprises.

It is not too late to tell even more peoples of what I've done (when it comes to my monies, I AM conservative), would it be wise for them to consider what I've done???

Sorry, I'm confused today, my wife passed on recently, and I'm in a quandary...

Mon, 01/11/2010 - 14:09 | Link to Comment Anonymous
Mon, 01/11/2010 - 14:31 | Link to Comment Art Vandelay
Art Vandelay's picture

Sorry for your loss, Big Red.

Don't worry about cashing out the IRA; if you're a regular here, you'll find that no one has any idea how things are specifically going to work out, and when.

A small piece of advice: try not to make too many big life decisions while you're still mourning. Give yourself some time to recover and heal. All the best to you.

Mon, 01/11/2010 - 14:34 | Link to Comment Anonymous
Mon, 01/11/2010 - 14:37 | Link to Comment deadhead
deadhead's picture

big red....my primary concern is your age of 58 and at 59.5 you can avoid the 10% penalty for early withdrawal of an IRA.

if you want to stay away from stockbrokers, financial planners, etc, please do yourself a favor and see a CPA soon.  perhaps you can rollover the ira back into another ira and just plop the money into an fdic insured account at a local bank.

 

really, see a CPA.

I am sorry and feel for you on the loss of your wife at such an age (i'm 54).  Please keep checking in here, there are some really good people with good ideas and they know how to help you not get screwed.  good luck to you

Mon, 01/11/2010 - 14:40 | Link to Comment Trifecta Man
Trifecta Man's picture

This is what i think.  You will likely have to pay a 10% tax PENALTY for withdrawing money from the IRA before you are 59.5 years old.  That is on top of the taxes you have to pay on the money withdrawn.  Go see a financial planner NOW to see whether this can be rectified or offset by another contribution.  You might have 60 days to this.  I'm not an expert on taxes. 

Mon, 01/11/2010 - 15:18 | Link to Comment Green Sharts
Green Sharts's picture

I'm sorry you lost your wife Big Red.  You have received some good advice.  If you don't need all the money in your IRA for an emergency there's no need to cash it out all at once.  You say you're 58 but don't say when you'll turn 59.  If you turn 59 in the first half of the year, that means you'll hit 59 1/2 before year end and you wouldn't be subject to the 10% penalty in addition to taxes.  If you won't hit 59 1/2 until 2011, taking the money this year makes no sense at all.

As others have said you have 60 days to take that check and deposit it into an IRA you set up somewhere else without any tax liability or penalties.  Here's a link to an article on that:

http://www.investopedia.com/articles/retirement/06/rollovermistakes.asp 

Tue, 01/12/2010 - 14:20 | Link to Comment Trifecta Man
Trifecta Man's picture

After the indirect rollover to another IRA, he may still have to pay some tax or penalty on any amount that does not get rollovered.  Another thing to discuss with financial planner.

http://www.phoenixwm.phl.com/html/taxlaw/page2-1.html

See "IRA Rollovers from IRAs" in above link.

Mon, 01/11/2010 - 15:20 | Link to Comment Anonymous
Tue, 01/12/2010 - 00:36 | Link to Comment Problem Is
Problem Is's picture

Some states have a tax penalty as well. If you live in TBTF Calif... add 2.5% to the feds 10%.

I think deadhead's thought about talking with a CPA is what I would do. Good luck to you.

Mon, 01/11/2010 - 13:12 | Link to Comment phaesed
phaesed's picture

In a h/t to ZH, you guys were all over this story with JPM SPY gunning over 8 months ago, nice to see that the mass media is still about 2 months behind where you were then.

Mon, 01/11/2010 - 13:14 | Link to Comment trav7777
trav7777's picture

All the Fed would have to do is lend to a bank at 0% and have them buy index futures.  That's it.  And they can shrug and pretend they had no idea.

Bama told everybody what was gonna happen on Mar 6.  And then they went and did it.

Mon, 01/11/2010 - 13:50 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Using the term "lend" pretty loosely i.e.

Mon, 01/11/2010 - 15:54 | Link to Comment trav7777
trav7777's picture

Well, then they can repo the securities to the Fed and get the cash back and repay the loan.  And it's all good

Mon, 01/11/2010 - 13:17 | Link to Comment Anonymous
Mon, 01/11/2010 - 13:48 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Not to beat my own drum, but some idiots did make fun of me when I proposed and explained the Fed's stock-market manipulation modus operandi LAST YEAR (spring/summer I think) on this very site. BTW, the criminals at the Fed and GS et. al. are really not as intelligent or smart as they imagine themselves to be. Cheap tricks is all they are capable of. Only your own unwillingness to accept the criminal nature of our government as well as economic and financial system stands in your way of understanding the truth. Once you do and look at things in a different light with an open mind it all becomes CRYSTAL CLEAR.

Mon, 01/11/2010 - 14:09 | Link to Comment Rick64
Rick64's picture

and stock market manipulation is the least of their crimes.

Mon, 01/11/2010 - 13:40 | Link to Comment Anonymous
Mon, 01/11/2010 - 13:45 | Link to Comment Anonymous
Mon, 01/11/2010 - 14:06 | Link to Comment WhataMess
WhataMess's picture

Did you not follow the markets during the crash?

The futures were being pumped throughout. Apart from the Lehman's collapse they mange to spread big down days out preventing 2 big down days in a row that helped disperse fears.

I am going on memory but I believe the top 3 percentage moves in the crisis were all up days. I was always led to believe fear was a greater emotion than greed.

Mon, 01/11/2010 - 17:27 | Link to Comment GS is short Gold
GS is short Gold's picture

the markets were likely moreso interfered with during the collapse. I remember days with huge fear and Asia and Europe dropping 3-5% overnight. Futures would be limit down, and then suddenly a wave of buying right before the open the mkt almost flat. If the market had been allowed to trade without intervention, it may have dropped to 200 on the SPX and would still be there now.

Mon, 01/11/2010 - 13:45 | Link to Comment Anonymous
Tue, 01/12/2010 - 06:59 | Link to Comment malvotron
malvotron's picture

Exactly.

But what to do?  In this environment, any analysis of fundamentals seems futile. 

CLOSE ALL SHORTS! BUY ALL THE S&Ps YOU CAN AFFORD AND JOIN ME ON MY YACHT///

 

Mon, 01/11/2010 - 14:05 | Link to Comment Yossarian
Yossarian's picture

Who is selling volatility?  Perhaps this is the way The Fed is aiding the mkt- flooding the system with options?  I don't know- this just occurred to me...

Mon, 01/11/2010 - 14:22 | Link to Comment Winisk
Winisk's picture

Naive question here.  So who is buying up the TSX?  or are the resource stocks holding their own?

Mon, 01/11/2010 - 14:39 | Link to Comment El Hosel
El Hosel's picture

Thats right Winisk,

 Most all of the world indices are hanging at highs, has the working group gone global ( new world order )? The man behind the curtain runs the whole world now?

Grains have not recovered much, neither have gasoline refiners, otherwise its all connected or so it seems.

Mon, 01/11/2010 - 17:43 | Link to Comment The Deacon
The Deacon's picture

Hmm, food and gas.  DO those 2 items affect the CPI?

Mon, 01/11/2010 - 14:20 | Link to Comment Anonymous
Mon, 01/11/2010 - 14:37 | Link to Comment gigeze787
gigeze787's picture

USG supporting equities isn't about helping Wall Street, that's just the collateral damage. It is about restoring the pension funds, both managed and self-directed, of the baby boomers. If this had not occurred we  would have had a revolution, and lots of unemployed politicians. fwiw, I don't think Ritholtz is naive or stupid...I think he's decided that there is a limit to how much he wants to (and practically can) take on the system without hurting his franchise -- especially since he seems to have supported the current POTUS.

Mon, 01/11/2010 - 15:09 | Link to Comment Seal
Seal's picture

you're totally right about Barry AND I further assert that at least during the Bush period certain individuals and their positions in the market were targeted - probably through facilities of DoD

it's unlikely this will ever come out.

Mon, 01/11/2010 - 18:31 | Link to Comment Psquared
Psquared's picture

I would say it was both and possibly a third reason: easy way to pump even more liquidity into the economy flooded by cash from ZIRP and TARP but cash that was getting no traction. They got some bang for their buck ... so to speak.

GS, et al made some nice trading profits along the way too. (With our cash)

Mon, 01/11/2010 - 14:38 | Link to Comment Seal
Seal's picture

wait until everyone goes to take delivery of their gold held in storage for them at 33 Liberty HAHAHA

Mon, 01/11/2010 - 14:41 | Link to Comment deadhead
deadhead's picture

Thanks once again Mr. Biderman for your openness.

 

PS to LB....remember the whole PR thingee that I've been telling you Lloyd.  It would not be a good idea to fire Mr. B now, okay? 

Mon, 01/11/2010 - 15:45 | Link to Comment Anonymous
Mon, 01/11/2010 - 14:51 | Link to Comment DavidC
DavidC's picture

If the Fed IS goosing the market, it's not being particularly bright about it.

The very fact of continued moves up in the light of bad figures (Thursday's and Friday's for example) is enough to raise suspicions.

The fact that since the end of October there has been no real move down, even slight correction, is enough to raise suspicions.

The continued move up on no volume is enough to raise suspicions.

If the Fed (and I'm NOT asserting that it IS goosing the market) was bright about this, it would allow the (stock) market to 'breathe' a little bit so as NOT to raise suspicions.

DavidC

Mon, 01/11/2010 - 18:06 | Link to Comment dnarby
dnarby's picture

"If the Fed was bright about this".

Well, there you go.

Mon, 01/11/2010 - 18:08 | Link to Comment dnarby
dnarby's picture

.

Mon, 01/11/2010 - 15:01 | Link to Comment Anonymous
Mon, 01/11/2010 - 15:19 | Link to Comment Anonymous
Mon, 01/11/2010 - 15:22 | Link to Comment Ripped Chunk
Ripped Chunk's picture

http://www.spiegel.de/international/world/0,1518,562291,00.html

IMF to audit US Fed?

Anything is possible right now the way things are going.

Insanity

Mon, 01/11/2010 - 16:03 | Link to Comment Anonymous
Mon, 01/11/2010 - 15:39 | Link to Comment Anonymous
Mon, 01/11/2010 - 15:45 | Link to Comment Anonymous
Mon, 01/11/2010 - 18:21 | Link to Comment gigeze787
gigeze787's picture

"...and various blue chip stock (ex FORD)..."

Do GS/JPM/CNBS, acting on behalf of Fed/UST, play "crush the shorts" w/ taxpayer money, then pay themselves bonuses from proceeds?

Dec 15 - Set the bait for small fry: "legendary" Jim Chanos announces on CNBS he's shorting F which closes at $9.39, VIX $21.29 

See: http://www.cnbc.com/id/34433626/site/14081545

Jan 11: F closes at $12.11, VIX at $17.55. Ford CEO at Detroit Auto Show, says economy is still "fragile", F wins car and truck of the year, CNBS' Lebeau asks CEO "how surprised were you" at awards?...when the question is "how surprised were the Fed/UST factotums on wall street?" Not.

See: http://www.cnbc.com/id/15840232?video=1382662811&play=1

 

Mon, 01/11/2010 - 19:03 | Link to Comment Anonymous
Mon, 01/11/2010 - 19:36 | Link to Comment ahab
ahab's picture

do you call him on it?  He has been strutting his tail feathers ever since he got the march low right-

and now talks about all the $$$ he has made-

alright I guess- but this nonsense about no market manipulation- that just reinforces his image of himself as an independent trader making all the right moves and that Uncle Sugar hasn't nothing to do with it-

yeah right

 

Mon, 01/11/2010 - 19:37 | Link to Comment Anonymous
Mon, 01/11/2010 - 22:10 | Link to Comment Anonymous
Tue, 01/12/2010 - 01:59 | Link to Comment Grand Supercycle
Grand Supercycle's picture

 

I use technical analysis and more analysts should study share price trends in my opinion.
 
Technical analysis can assist us as to the direction of the economy as it is a leading indicator.

In early 2007 I warned of an impending stockmarket crash.
 
I confirmed a bottom by April 2009.

In mid 2009 I warned of an impending USD rally.

The uptrend since March 2009 has been a bear market rally contained within a much larger bear cycle that started in 2000.

http://www.zerohedge.com/forum/market-outlook-0

Tue, 01/12/2010 - 02:03 | Link to Comment Anonymous
Tue, 01/12/2010 - 02:42 | Link to Comment Anonymous
Wed, 01/13/2010 - 08:03 | Link to Comment Anonymous
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