This page has been archived and commenting is disabled.
Reality Check With Rosenberg
From David Rosenberg's latest Breakfast with Rosie, from Gluskin Sheff
Reality Check:
- The S&P 500 is no higher now than it was on February 7. Yet, so many pundits still believe we are in a flaming bull market.
- QE2 failed to provide for a sustained acceleration in the pace of economic activity.
- The housing inventory background is horrible
- Over half of the NYSE is now trading below its 50-day moving average (thanks to Richard Russell).
- M3 has fallen at a 1.5% annual rate since QE2 started (thanks to CLSA's Russell Napier); in other words, credit is still not being created.
- The Nasdaq is the first of the major averages to have broken below both the 100-day and 50-day moving averages. The Dow and S&P 500 have so far just pierced the former, but we all know the Nasdaq is a leading indicator. As an aside, in the last 12 months the Dow has broken below its 50-day moving average three times and from that point to the interim bottom, we saw the Dow plummet 4.5%.
- Ditto for FTSE, on an international scale, and it is down 1.1% year-to-date. Same goes for the cyclically-sensitive Korean Kospi, which is now flat for the year.
- Whenever bond yields and bank stocks go down in tandem, it rarely foreshadows anything good. So far this year, the yield on the 10-year note is down 11 basis points while financials have sunk 2.9% and underperformed the market by 765bps.
- If inflation is on everyone's brain, then why is the S&P 500 basic materials sector the only other one down for the year?
So many things are at critical technical junctures too:
- The 10-year note hugging the 200-day moving average (and the 50- and 100-day trendlines are now heading down in yield).
- But gold was up yesterday on the same day that the dollar was up — and bullion is hugging the bullish 50-day m.a. line very nicely.
- The CRB has broken below each of the 50- and 100- day trendlines and there is 5% to the downside before the 200-day threshold is tested.
- For the loonie, which too has suffered the indignation of breaking through the 50- and 100-day lines, is 2.2% away from that key test.
- Oil just broke below the 100-day m.a.
- But even with oil down, the Transports are giving it up — down 1% yesterday even in the face of a 2.4% slide in oil prices — and down in seven of the past nine sessions (when Transports sell off when oil is down then a very important bearish economic signal is being flashed).
- The DXY has already broken the 50-day ma. to the upside and is on the precipice of taking out the 100-day.
»
- 12799 reads
- Printer-friendly version
- Send to friend
- advertisements -
As comment number 1, all I can say is...
silver, bitchez........silver........
Some selective pickings in this article: the Nasdaq is NOT the leader, the Dow Transport is and that has not even kissed its 50 or 100 MA for a start...
Way too negative and INCONSISTENT.
Should he manage HIS OWN MONEY???
Here's a real reality check: Black social activist and university professor Cornel West calls out Obama as being a part of the oligarchy and challenges Americans to rise up like people in Europe and the Middle East are doing. Read here:
http://redpillfactory.blogspot.com/2011/05/cornel-west-calls-out-obama.html
It is scary and refreshing at the same time to see truth coming from so many disparate parts of America. Perhaps we will one day coalesce into something that can take on the true bearers of evil. Perhaps not. Thanks for the link.
he couldn't figure that out before the election when he campaigned for him?
"Dr." West had his "black"-colored glasses on...
With its interchangable parts, the Chicago Democratic Machine just swapped Emanuel for the other Daley boy. Obama is just the front part.
Breaking News: David Rosenberg and ZH are declared the new Axis of Evil.
+1524
did tyler pay rosie's subscription fee?
If M3 has fallen at a 1 1/2% annual rate, then how in the world can we have inflation?
We are in an economic deflation. Inflation (increase in $ supply) is taking place thru Jun30, this inflates certain asset prices (price inflation).
Velocity is all we need now. Hell, let's just skip that part and go straight to hyper-inflation! Inflations's evil step-child.
Hyperinflation will ramp up velocity to Warp 9.
This is Amurika. Our velocity goes to Warp 11!
Star Trek + Spinal Tap. Well done.
Spinal Trek -- The Search for a US Govt Backbone...
Star Tap -- Capt'n Kirk goes wild on the "Planet of Women."
:>D
Eventually hyperinflation will, but it's no where on the horizon. The hyperinflationists have been screaming about it for years now, and it's been a no show. Some were claiming that it would start last September; it didn't.
Wasn't Gonzo Lira even saying that it was going to kick in by May?
The Debt Deflationists have mostly gotten this one correct; it can't start until the excess/bad debts are wiped out. In the meantime, money would be flowing towards the things that people needed. Which is what we've seen.
Of course, they have underestimated the power of the Fed these past two years. Still, that's not bad, as no one thought Bernake would be as insane as he's been.
Other way around. Velocity is the accelerant to hyperinflation.
Because M3 is not currently falling. He framed in a time period to make a case.
http://nowandfutures.com/images/m3b.png
And this is what matters anyway.
http://research.stlouisfed.org/fred2/graph/?s%5B1%5D%5Bid%5D=AMBNS
The first chart is nice. Thank you. Things look pretty flat. We spent $900 Billion for that? And we didn't even get a T-shirt.
I have to disagree with your second statement though. But I won't belabor the point.
..buuuuuut Benie is going to print a guzillion dollars.
So buy buy buy!!!
If everybody expect the market to go up...
there's a big chance it won't.
Its all over but the cryin, pipe dreams of more QE is full-on nonsense, pipe dreams from a Hopium hookah. Next step, WW3 nuclear exchanges.
sounds like a par-ta, ill bring the nuke suits and you bring the nuke pills
QE3 or War...
54 - 40 or FIGHT!
Ya gotta love an old fightin' battle cry for grabbing land from Canada/Great Britain's empire but I think nowadays they are reconciled to waiting for the next Ice Age to have thier glaciers reclaim that territory. They don't need the tax problems in that part of the world.
Ya gotta love an old fightin' battle cry for grabbing land from Canada/Great Britain's empire. I think nowadays they are reconciled to waiting for the next Ice Age to have their glaciers reclaim that territory.
both
.
They both go hands in hands, QE3 won't exist unless there war comes with it.
USA will be in Chapter 11 or worse Chapter 7 by year end...who needed democracy anyhow?
Democracy Henry Ford Style!
YOU CAN HAVE WHATEVER KIND OF DEMOCRACY YOU WANT!
AS LONG AS IT'S THE ONE WE WANT YOU TO HAVE!
But wait...Carter Worth of Oppenheimer said last night that if all technical indicators are broken, and all moving averages are broken, and people keep selling...that it is good because it will make the recovery bounce that much better.
I thought good sheeple stood still during market collapses?
They do, except for Cramer's audience. They buy, buy, buy.
Booyah.
Word on the street (heard it from a friend who...heard it from a friend - actually, the friend is BSD):
Banks sitting on mountains of foreclosed properties are about to try and unload a good chunk while they see what they anticipate will be a Hopium Window during the summer/early fall amongst wannabe home buyers who have been mystified as to why housing prices haven't dropped even further and puzzled by all the empty homes with no 'For Sale by RealtorTM Company' signs in the front yard.
With high enough appraisals very hard to find (buy), the FHA backing 84% of all new and exisiting home loans (lest the banks say Non! to the risk of new loan issuances given their precarious balance sheets as is - and that's with Bernanklecide infusing many of them with oxygen via the discount window), and another 2.3 million foreclosures to ultimately enter the hopper of what's already a mountain of stagnant foreclosed properties, and with many more Strategic Defaulters created each day (smart choice for most), IT'S ON LIKE DONKEY KONG!
Bitchez.
But really now, things aren't so bad. Wink, Wink. The banks have cleaned up their balance sheets and acts. Wink, Wink. The government is getting its fiscal house in order. Wink, Wink. The government can afford to exit the business of insuring and backing bank loans on real estate in what is what's left of the 'housing market'. Wink, Wink. The cash buyers (many of whom are 'investors' and will incur massive carrying costs on a resource draining asset class) that have been stroking the very desperate and less supported financials plagued with toxic MBS haven't really been the reason Phase II of the Clusterf*ck hasn't begun yet. Wink, Wink. Great jobs with great wages and benefits are being absolutely cranked out. Wink, Wink. Interest rates can't and won't rise - ever. Wink, Wink. Austerity measures really can be avoided in perpetuity in the U.S. for all of time. Wink, Wink. Manufacturing is organically strong (and GM is NOT channel stuffing), the DoD outlays aren't holding up literal whole sectors of the rust belt, and Bernanke's balance sheet is healthy and getting healthier all the time! Green shoots, bitchez!
Exactly.
And QE3 will be in the form of FHA and Fannie/Freddie loans at 3% while the FED raises prime rates for normal humans by a point or two while continuing to buy MBS.
Probably after the dust of the next election (regardless of winners) the CONgress and Judiciary will cook up a way to confiscate IRA's, 401K's, and any savings. Confiscate or hold in perpetuity using withdrawal limits and draconian taxation schemes; effectively forcing foreclosure on those who become unemployed and/or throttling the use of people's own money for what they choose.
In all seriousness, do you think "they" would try to confiscate gold and silver (physical)??
It has been done numerous times in the past.
I suspect that a lot of people will preferentially deliver copper-jacketed lead via airmail from tubular steel, rather than gold or silver.
No, because they don't have to. They can simply make trading it illegal, effectively making it useless for all practical purposes.
Sounds about right but you're missing the finishing touch: geopolitical (maybe right here in the good ole USSA so that it hits home) shock and awe (nationalistic MK-Ultra lobotomies).
Reinforces their "authority" amongst the zombies.
So it sounds like they have everything under control. Man, am I relieved. For a second there I thought we were toast. Don't know where I got that idea. Glad I was wrong. /s
The market gave it it's best shot.
We'll see in August if people are still speaking of a bull market.
And the big 3 banks divs suggest that they can crash about 95% when the bull goes belly up for the next decade.
Meh, everyone and their mother is bearish from July 1 onward. We either get an epic crash, then QE3+, or keep screaming higher. Neither would surprise me. I still think an epic crash is coming to justify QE3, but pretty much everyone thinks the markets will weaken and it just might not happen.
if there is no QE3 and they want to keep interest rates low, market is going to have to tank some
Everybody is talking about QE3 but it's the size that matters and which will lead the market.
By now, they'll need to introduce a 3 to 4 trillion dollar QE3 to matter.
Once they launch QE3, nobody will ever again buy bonds for the next comming years untill the deficit is under control.
So now, it will have to be a really big QE to kick the can to the end of the street and hope it doesn't end up in a sewer.
Another consequence of QE3, if it does come about, is that long-term interest rates will rise. It seems counter-intuitive but that's what happened during QE-1 and QE-2. I haven't seen much discussion of what rising long-term interests would do at this point.
Yes there where. Any rise above 0,75% will kill the FED.
And I've been told all my life that "size doesn't matter"...*sigh*
Thats what Im thinking too, only a QE of $5 trillion or so would even be close to impressing the beast, however if such a thing were mentioned we'd immediately have a USD at about 60 and gold at $2,000 so its all just irrelevant nonsense.
Rosie's record the last 2 years has been utterly horrid.
SPY is up over 100% off the 2009 lows, fantastic gains on consumer stocks like Foot Locker going from $5 to $25, AutoZone up from $100 to $275, DSW shoes from $8 to $50.
It has been one of the biggest bull markets of a lifetime and he totally missed it.
SPY is only down 4% from the highs and CNBC is squealing and squirming, acting like it is already down 20%+ and say we are now in a bear market.
I'm still waiting for the real correction, if there is going to be one, to start.
Wouldn't surprise me to see the market keep pushing higher as more and more shorts are simply demolished and capitulate. Even going into June, July, August, this market could run another 40% easily. It's obviously manipulated and pumped up so why wouldn't they run it higher?
There's a pretty good chance that you won't have to wait longer than next Tuesday.
Momo, your record is worse. With all your crameresque talk of gold being 'obliterated' and TZOO being the next GOOG. If you actually traded you would have gone broke long ago.
You don't even troll originally, yoiu are a copy of 'rasputin'. LOL
agreed. but talking to/about him is like playing ping-pong by yourself; there's no one on the other side to hit it back.
he never responds to anything.
In addition to the other crash & burn MOMO fade picks of the past, where are MOMOFADERS housing builder 'fast money' intraday charts on this glorious day?
That MOMOFADER; "he so funny," say Chinese Solar Trader.
I don't think it would be very hard to create a trollbot by using a large number of key phrases and then randomly tying them together with various lexical constructs. Certainly wouldn't pass the Touring test, though.
robottrader: when a poseur posts anonymously.
Leave it to you Robo, to search high and low for the few golden colored nuggets of corn out of the massive shitfest that is the current economy.
I smell poo poo
MomoFader talking about performance records? Hey clownfart go find me a retail stock that popped, make yourself useful.
Nas looks horrid,
Gold rally looks to pause
euro and oil looking toppy
http://deadcatbouncing.blogspot.com
Reality check with Kunstler:
http://kunstler.com/blog/2011/05/get-real.html
Don't get too bearish, its memorial weekend. you can always be bearish after the weekend.
As soon as the PM's break more cleanly their correlation to the risk on/off trades, then it becomes more than just an inflationary/deflationary debate (as it should be)-- a hedge against unintended consequences i.e. TPTB will do anything to maintain their power and slavery of debt to the very last default which will have further implications upon general asset prices largely deflationary, but it won't go without a fight so look for the currency destruction to ratchet up some more.
You like bullets I got bullets:.
· Bitcoin is a technologically sound project
· Bitcoin is unstoppable without end-user prosecution.
· Bitcoin is the most dangerous open-source project ever created.
· Bitcoin may be the most dangerous technological project since the internet itself.
· Bitcoin is a political statement by technotarians (technological libertarians).*
· Bitcoins will change the world unless governments ban them with harsh penalties.
Anyone heard anything about this? Maybe Tyler can do a story.
Bitcoin is a P2P currency that could topple governments, destabilize economies and create uncontrollable global bazaars for contraband.
http://launch.is/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html
And you think they would be allowed to continue to operate if they actually became a threat? Child, please.
@Badabing
Yes, I've heard of it. I have several problems with it. First, he who owns the most computing power - and in this case it's the GPU for hashing, not the CPU - has the advantage. So, Bitcoin favors technologically advanced users. Second, if the money supply is forever fixed and cannot grow with the population, it presents dangerous deflationary scenarios. And, finally, how is behind it (yes, I know of the mysterious Yoshi)? It could be a malicious front.
Server 503 issues.
Server 503 issues.
Lol bitcoin ponzi.
The guy that started it and early adopters 'mined' all the easy coins. Now they just have to convince greater fools to get in on it so that they can cash in.
"most dangerous open source project ever created" should be setting off your hyperbole alarms toot suite.
Server 503 issues.
Server 503 issues.
Oil is only up $.48 after being up over $2.00
Meh, yesterday it was down over $3 and then popped all the way back up. Don't think it's going much lower this week. There is furious buying anytime it tries to test the $95 level.
I read a story that hydroelecric shortages are happening worldwide due to lack of rainfall. The substitute for hydro power is oftentimes gas-powered generators. Could this be a reason that the price of oil is sticky at $95?
no, because 'gas powered generator' means GAS powered generator, not gasoline powered generator.
Quite the opposite in the central U.S.
macho!!!! I thought you were dead!! Another hoax by tptb exposed.
I am dead, but I have already managed to elbow drop jesus from the top rope (he's more or less the gate keeper around here)... I've got a supermatch against the big man himself at afterlifewrestlemania XXXXIXIXIXIXXXV!!!.!.1.1! Ms. Elizabeth has told me she'd take me back if I win the champion of the universe belt. I was a used up sack of bones in real world, but in death I feel no arthritic pain. OOOOOOOOOOOOOH YEAHHHHHHHH
Is there anything more worthless than CNBC "breaking news" alerts? Last week it was DSK taking a shit, DSK walking out of the courtroom, DSK being escorted to his limo, DSK may or may not get bail, a decision coming on DSK, and DSK taking another shit. This week it's Yandex opening up, Linked in opening up, Glencore opening up, and now Chrysler paying back the gov't. Fucking mindless bullshit, not sure why I torture myself.
What LRC, don't wanna know when DSK is going to pop a duce? Pure actionable and tradeable news! ;)
Not as bad as WSJ/MarketWatch gems such as: "Oprah: TV’s No. 1 success story, ever", " Bob Dylan: An American icon turns 70", U.S. stocks fade as seasonal lull in play"
CNBsC is just one bit player in the mechanism that pumps the air under the wings of Flying Unicorns that makes the illusionary skittles rainbow of free and fair markets possible for the sheeple to imagine.
DSK took two shits last week? Damn!
Holders of the XRT have now once again assumed the position. Grab your ankles, boys. The most prolific creation units machine of them all seems to have been accidentally unplugged...conveniently here near ALL TIME HYPERINFLATIONARY HIGHS.
WTF? TZA going nuts. 37 to 38 to 37 to 38!
Is Scottrade nuked? SPY all over, too.
I've noticed that. Prices all over the place...
gh
Well, I didn't get a fill off it.
mynhair,
How wide are the spreads on those Roach Motel [SPY] trades you are seeing [per minute]?
FWIW I see bid-ask spreads of 1 cent on SPY.
+100 for the Roach Motel, lol
Like 80 cents they were.
The same thing was going on in individual stocks back in 2007 when the market was about to break. The spreads on Boeing, as an example, minute to minute, were registering $2 spreads. This is how the HFT cheats the system. The trades, long and short, are coming through the fractured exchange system....from different locations...as the firms switched their books from long to short.
Things are different now...but only to the extent that $7 billion in counterfeit Bernanke bucks can flow into the system at any moment...you know...until the end of June.
Takeover/Buyout/Offered Buyout chatter.
Big Block Buybacks.
Dividend hikes.
Those three things were quite pronounced trends in 2007 leading up to the fall.
And they rear their heads all over again.
...and IPOs...which have been going off at a frantic pace in recent weeks.
Interesting thing about those buybacks...isn't it funny how those announcements come as insiders literally unload buttloads of their own stock? Sticking it to the investors every way possible...the so called "investors."
And IPOs, indeed.
And now, Brother, we have private market IPOs, sold on markets like SharesPost and Second Market.
It's even more irrational, in many ways.
What the buy the dippers arent factoring in is when the Bathrobe Brigades get skittish and place their sell orders all at once to an empty bidless market, all hell breaks loose. That day is coming soon. The ONLY reason theyve been pumping equities higher is to keep 401K holders placated. The wheels have to fall off and their 3 year illusion is wearing very thin.
Three years, bailout after bailout, and $5 trillion tossed onto the bonfire of criminal Wall Street self destructive lunacy.
So...where does the next $5 trillion come from? Where is the next bailout? And most importantly, when does confidence rebuilding actually begin?
Oh...and when do the layoffs in the financial services industry finally begin...you know, since their market representation measured in market cap is evaporating?
Cdad, it certainly aint 2008 anymore! Those were times of 'WHEW wow we dodged a bullet there! The Bernanke has a plan, TARP it all, and my 401K is good to go'! Theyre all out of bullets now, and the 401K Bathrobe Brigades fingers are getting twitchy.
Indeed, Dog. Not sure what is behind the persistent bid in the bubble stocks, but in a macro sense, there is nothing left to do except finally let the market set its proper level...which surely is not here.
Dog/Cdad - how incredible is it that the raiding with steep penalties, of 401(k)s and other retirement accounts is at as furious a pace as it is in what is this 'recovery?'
More evidence [if any more were needed] that there is not now, nor has there ever been, a recovery in anything...except the Russell 2000.
Incredible? Indeed, as the Republic is now on its knees...these are incredible times. And oddly enough, there continue to be no protests in this country. The sheeple are still sleeping...even as they need to make early withdrawals from their retirement accounts in order to eat.
Not sure what the catalyst is, but what is coming is quite clear to me.
But QE2 succeeded -- in meltdown of the value of the dollar. QE3 should finish the job. Too bad for all the Tbill holders as it melts.
Also sorry grandma, I know that fixed income won't even buy catfood at the end of this meltdown. But hey someone had to take the bullet.
Banks searching for "oblivion level." That is always a good sign.
**S&P break IMMINENT**
HFT robots flailing their arms wildly trying to find something to whip up into frothy goodness. Come on T-1 terminator units! Find something out there to pump! Got to get some froth under these rainbow unicorn wings so CNBS anchors can smugly report it so the 401K bathrobe brigades dont become nervous!
For a few minutes everything was spiking up and back down. Was watching from Scottrader Streaming Quotes.
Not seeing it on my screens. Seeing inexorable sinking lower after initial highs. Perhaps, your broker is showing you its "Wildest Dreams Quotes" from its internal inventories.
I just see the market making new lows then immediately bouncing about 10-15 Dow points off the lows before drifting a bit higher then heading lower. Every new low is met with a furious pop by about 7-10 Dow points in literally 30 seconds.
That is what institutional/algo short selling looks like.
Meh I'll believe it when I see the Dow close at the lows just one fucking time and follows through the next day with some solid selling. Insider buy/sell ratio has been insanely high lately, we'll see how long before this market completely breaks. Again, I'll believe it when I see it.
This is what institutional/algo short selling sounds like...
Airdude : He's all over the place, 900 feet, up to 1300 feet . . .
what an asshole.
Kramer : More mast rudder, put down more flap . . .
Johnny : ( Unplugs runway lights ) Just kidding.
Kramer : Striker, lift your nose, straighten your wings. You're
coming in too fast, watch your speed.
MCrosky : He's coming right at us . . . ( jumps through a window )
Kramer : You're coming in too hot. Ease up on the throttle.
Watch for that crosswind. Aim for the numbers, you'll
have to dip your left wing. You're drifting, keep your
eyes on the far end of the runway. You're too low
damnit! Watch your stall speed. Ease her down, down.
The break . . . pull the red handle.
Rumack : I just want to tell you both good luck, we're all
counting on you.
Good call!
Same here. Crazy.
My new book, to be released when the real crash occurs (very soon), shall be titled 'Your Ask Was From Venus, My Bid Was From Mars, Bitch!'
Almost auction time! This could be good.
Bummer, it went off ok.
50, 100, 200 MA's - sure, they are guides, but if it were that easy looking into the crystal ball, then money for nothing and your chicks for free.
The Fed has this market so pumped up that when it pops, no moving average will matter. The major move will be quick and severing.
But in the meantime, the Fed is using equities as its "transmission" - which is the term they use. Hell, what else can they do?
They've already bailed out the banksters, and there's no way in hell the banks want to loan money again and get caught in the trap.
Just show me the easy and quick money. Which seems to be one of the enemies at hand, for all of us.
POMO Rain
The fresh new hit by Ben 'Bubbles & Bananas from B52s' Bernanklecide & The Insane Clown Keynesians
:D
Soon the government will start to implement more agressive actions not in line with their previous attempts (QE1, QE2, etc., buying up corporations, etc., etc.) that didn't really work.
Just like thier seizure of govt. retirements accounts (just temporary, right?) they will go after more easily accessible cash - confiscation of our personal investments (IRA, 401K, etc.) and watch closely for this... they will deem that you need some special government approval to put your home up for sale - control movement and limit additional real estate inventory from competing against their homes for sale (owned by Fannie and Freddie).
They are no longer in an "economic salvation" mode... they are moving into a "save the government" mode. Scary.
Down 4.5% not equal "plummet"
Rosie is an equity buyer on 10% pull back -- not exactly apocalypse.
Ooo yea, because with a 10% pull back, that only means FAR HIGHERRRRRRR!! Not like we're actually in the greatest depression or anything in a collapsed USA....nah....buy equities baby!!!
it has worked pretty well over the last 2+ years, right? 25% gain in the last year with no leverage. and that followed a what? .. a 10% pullback around April last year.
So sitting here at near all-time equity market highs, the only direction is UP? Ok well I dont believe it.
Here's one more reality check. Seems Obama is getting slammed from more than one direction. Black social activist and university professor Cornel West calls out Obama as being a part of the oligarchy and challenges Americans to rise up like people in Europe and the Middle East are doing. Read here:
http://redpillfactory.blogspot.com/2011/05/cornel-west-calls-out-obama.html
Rosie just said 1400 a month ago.
If Rosie said 14xx, I'm honestly down with 9xx Spooz on a short enough time frame to really matter.
so... if money supply is falling, why do i read so much ranting here about hyperinflation? or is hyperinflation caused by a falling money supply?
Don't bother explaining it to him. He doesn't care... he's just trolling as usual (check his track :)
right... the creation of excess reserves is in itself NOT an inflationary event, particularly when you have the current situation where velocity has fallen/is faling/hasn't increased. Of course, if it were to find its way out of reserves, then sure you need to worry about a big inflation event.... but until that happens it will merely be the threat of it, or the fear of it, and speculators trying to front run it that is causing the concern.
Market yet again springboards off the lows. Amazing.
DXY chart ^
Dow chart V
Yay
M3 is falling...that is good news. BTW how does he know? FED doesnt like it since 2006 and they behave like an ostrich since....
Market is behavin' like QE is fading. It's part bluff and part normalcy bias.
There's only one more turn of this flywheel before it gets gruesome.
As an aside the Dow is up about 20P in the last 12 months and is down about 3.3P from its 4/29/11 peak.
My charts show four breaks of the 50DMA: mid JUL10, late AUG10, late NOV10, and mid MAR11. Two of them were nowhere near plummet signals. Interim bottom my ass, the last three were higher lows and of the first three only one saw a drop of more than 2P.
An economist that data mines for technical patterns that support his fundamental fallacies. How quaint.
You can pick your bottom or BTFD.
By my estimation QE is giving us 20% price increases per year.
Whether M2 and / or M3 is actually increasing 20% per year is irrelevant. (With all the fraud in the "official" numbers, who can say what the real numbers are.)
It's the perception of ongoing money printing causing people to rasie prices ...along with rising input costs obviously ...from suppliers raising their prices.
People's perception, what people believe, is what Bernokio can't control.
QE (in whatever form) screams "we're printing money, we're running the presses".
When people see that, they start losing confidence in the value of the currency, and raise prices by some percentage, which may or may not have any relation to the "official" numbers.
If a dollar collapse occurs, it will be worldwide collapse of confidence in the currency, irrespective of "official" M2 / M3 growth, and it's likely to be sudden not gradual.
Who cares about "official" M2 / M3 growth / contraction when prices of things people need are rising 20% - 25% per year?
We may not have "official" monetary inflation based on the (fraudulent cooked massaged manipulated) "official" numbers. But nobody really cares about those (fraudulent cooked massaged manipulated) "official" numbers it seems.
Rising prices are what people care about.
People's perception of the dollar losing value is what counts.
Good luck getting 90% of the U.S. population that is officially 'asleep' to realize what is going on in the world to lose confidence. I don't see it happening anytime soon. They won't loose confidence as long as all of the drugs (reality TV, social media, et. al) are plentiful in supply!....