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Stocks-Crude Inverse Correlation Passes 2008 Levels, Just Off All Time Highs: Major Correction Ahead?

Tyler Durden's picture


A week ago we presented the suddenly surprising inverse correlation between stocks and crude, commenting that: "the last time WTI to Stocks hit a correlation of -0.5 is just after the
market peaked in late 2007, early 2008, as the market had started its
decline which culminated with the global sell off of everything not
nailed down, bringing the S&P to 666. The correlation between the
two assets is again -0.5. If Brent confirms the WTI correlation, it may
be time to run." Subsequently every chartist jumped on this observation, yet it is today's update that is material significance: as of a few hours ago, the inverse correlation between the Brent front month has just passed the lows recorded in 2008, just before the market tumbled, when increases in oil prices no longer produced increasing stock prices (i.e., market topping). In other words, "it is now time to run" as we have just surpassed that level. And in fact, a longer term chart shows that we are just off the all time lows in the MSCI-Brent correlation. If this series continues dropping a correction is virtually assured.


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Mon, 03/07/2011 - 16:39 | 1027289 asdasmos
asdasmos's picture

Realty Mogul, Sam Zell, Talks Inflation - says we're not seeing inflation because the CPI is distorted. (Mar. 3 2011)

Mon, 03/07/2011 - 17:50 | 1027296 Quixotic_Not
Quixotic_Not's picture

No worries Sam, the printing wheels are still spinning due to out-of-control acceleration, once the rubber gets maximum traction you'll get your hyper-inflation  ;-)

Good luck getting the wages to increase at anywhere near that speed...ROFL

P.S.  Sam, keep your filthy hands off my FICA contributions!

As long as the USofA exists, that $800,000 my wife and I paid into the .GOV is a debt owed to us - inflation adjusted!

And we're still making involuntary contributions to Our retirement fund each & every quarter...or course I would settle for a lump sum ca$h-out  ;-)

How about let's close 99.99% of the 1000+ US .MIL bases around the globe and focus work on cleaning house back home?

OK you fuckin' whinging bankster?

Mon, 03/07/2011 - 16:56 | 1027341 covert
covert's picture

when it looks too good to be true, you can be sure that it is.


Mon, 03/07/2011 - 16:41 | 1027293 max2205
max2205's picture

and the 3:30 Ramp begins

Mon, 03/07/2011 - 16:46 | 1027310 Sad Sufi
Mon, 03/07/2011 - 17:03 | 1027363 Sad Sufi
Mon, 03/07/2011 - 19:39 | 1027869 disabledvet
disabledvet's picture

i did.  it was the song requested on the tarmac before Haiti--and i sang it.  of course a black prince is one thing--a dark prince is another.

Mon, 03/07/2011 - 16:42 | 1027298 rubearish10
rubearish10's picture

Sure, unless every current and future revolution reaches a happy conclusion because, after all, if there were no revolutions/MENA unrest etc,,,,we shouldn't even be talkin' 'bout a correlation knockdown. Everyone relax, all is good in the world, just look at the bounceback happening right now.

Mon, 03/07/2011 - 16:43 | 1027299 RmcAZ
RmcAZ's picture

None of this matters... correlations, technicals, fundamentals, anything. The only thing that matters is BTFD. The ramp job is going to happen no matter what.

Mon, 03/07/2011 - 20:52 | 1028125 erikig
erikig's picture

I'm afraid this looks a little different from the last dip due to the stretched OIL prices.

Take a look at the SPX/WTIC ratio and the break it had the last couple of days.$SPX:$WTIC&p=D&yr=3&mn=0&dy=0&id=p45100742126

Buy the dip, but know when to exit...

Mon, 03/07/2011 - 16:44 | 1027301 alien-IQ
alien-IQ's picture

however, what you fail to point out in this observation is that the last time such a correlation existed...we didn't have i-pads (let alone the i-pad 2)...this's different.

Mon, 03/07/2011 - 16:49 | 1027320 Sad Sufi
Mon, 03/07/2011 - 16:47 | 1027313 10kby2k
10kby2k's picture

Well, shit, it looks like ZH is correct .....  O'Bommy talks of tapping the strategic reserve and using the military and Kudlow (and the CNBC gang) talk about rate hikes and ending QE2 to strengthen dollar and curb inflation.

Do they see the big picture?   NO, they just can't handle the backlash of $4 gas.

Mon, 03/07/2011 - 17:06 | 1027368 SheepDog-One
SheepDog-One's picture

Obama himself said $7 gas is coming, in fact he said it would be here by January but apparently theyre getting cold feet, or something simply isnt in place yet for it.

Mon, 03/07/2011 - 17:44 | 1027509 10kby2k
10kby2k's picture

Sheep-dog:  That was in response to the Gulf spill and his projected cost to raise revenue to combat global warming.

Mon, 03/07/2011 - 17:41 | 1027497 alangreedspank
alangreedspank's picture


More like 5-6$ gas.

Certrain parts of Canada have been paying 4$ a gallon for even more than 10 years.


Mon, 03/07/2011 - 17:57 | 1027561 10kby2k
10kby2k's picture

many americans are pussies....when economy was zooming they were spazzed about $4.50 (in 2007)

i am an overweight american: i want cheap food, cheap gas, full salary pension at age 55 (maximum), perfect medical care, huge lawsuit settlements, all my lazy and illegal relatives provided for and all the Kool Aid i can drink

Mon, 03/07/2011 - 16:49 | 1027314 TradingJoe
TradingJoe's picture

Benjamin is the only man on the planet who "knows"


When the "correction" is Cuming!

Mon, 03/07/2011 - 16:49 | 1027323 TooBearish
TooBearish's picture

probably means CL/Brent will take a huge dumper

Mon, 03/07/2011 - 16:52 | 1027328 Tyler Durden
Tyler Durden's picture

And stocks will surge, meaning neg. correlation gets even more negative.

Mon, 03/07/2011 - 18:47 | 1027740 Arkadaba
Arkadaba's picture

Well there is a limit to how negative a correlation can get (I'm sure you know). What I'm not sure about these days is what the dependent variable is. And correlation is an interesting and useful stat to look at when you can isolate two variables. But right now .... too many variables in play.

Mon, 03/07/2011 - 19:43 | 1027877 disabledvet
disabledvet's picture

i agree. "it's not gonna happen."  price of oil et al stay high.  if the plan is to actually pay the bills i would argue as well war is inevitable however.  i'm a religious man but it doesn't take much for me to say "government is God."  period.

Mon, 03/07/2011 - 22:22 | 1028317 DoctoRx
DoctoRx's picture

Exactly right.  And then, one day-month-year in the future, they will correlate again.  It's all in TPTB's plan.  All the new "money" will go into one asset class or another, and correlations will work till they don't, so that the value of trading revenues and insider info will be maximized.  Meanwhile they key is that cash is trash-- till they crash the whole shebang again.  When and from what level?  Them that know ain't telling ZHers.  

Mon, 03/07/2011 - 16:48 | 1027324 Jendrzejczyk
Jendrzejczyk's picture

OT:  Hundreds of protesting homeowners occupying Bank of America lobby in Washington

Mon, 03/07/2011 - 16:52 | 1027331 alien-IQ
alien-IQ's picture

little hints of rebellion from the american sheeple every now and then...there just may be some hope after all:-)

Mon, 03/07/2011 - 17:04 | 1027362 serotonindumptruck
serotonindumptruck's picture

Just wait until those "sheeple" run out of food to eat. We ain't seen nothin' yet!

Mon, 03/07/2011 - 17:18 | 1027414 TeamAmerica
TeamAmerica's picture

Yes, let's have a civil war.  That's something to hope for. /sarc

Mon, 03/07/2011 - 17:29 | 1027450 alien-IQ
alien-IQ's picture

nobody is hoping for a civil war...we're merely hoping people muster up the guts to finally tell TPTB "please remove your dick from my ass".

granted, some are perfectly happy with a dick in their ass (and there's nothing wrong with that if that's your particular cup of Joe)..however those who do not enjoy a dick in their ass might just want to inform the owner of said dick that any further penetration will be frowned upon.

Mon, 03/07/2011 - 17:33 | 1027471 serotonindumptruck
serotonindumptruck's picture

+12 inches

Mon, 03/07/2011 - 18:41 | 1027725 velobabe
velobabe's picture

that statement including dick and ass could be perceived as torture†

Mon, 03/07/2011 - 17:02 | 1027358 Village Idiot
Village Idiot's picture

It's a start.  Have pride, people.

Mon, 03/07/2011 - 20:15 | 1027954 Zero Govt
Zero Govt's picture

yes it IS a start... cracks starting, the countdown begins...

Mon, 03/07/2011 - 16:53 | 1027330 irishlink
irishlink's picture

++ and we are now in a totally different space. Investors are still cautious and still remembering the drumming they got in 2008. It is the big guys game for the past two years and they don't run for the exits while there is still money on the table. They love stuff like this. lots of volatility and huge swings. ALL their birthdays come at once!

Mon, 03/07/2011 - 16:55 | 1027337 cougar_w
cougar_w's picture

If this series continues dropping a correction is virtually assured.

What is the causation for that? Money flight from equities on expectation of loss of profit for manufacturers? Margin covers? Why do we jump out of stocks on oil pricing?

Mon, 03/07/2011 - 17:04 | 1027360 SheepDog-One
SheepDog-One's picture

Im jumping in firearms myself. 'Investments' dont have to be just stocks bonds and oil. None of those things will do any good soon, but some Dinty Moore while watching the food riots and bank runs is winning in itself. Remember, head shots for zombies.

Mon, 03/07/2011 - 17:07 | 1027375 serotonindumptruck
serotonindumptruck's picture


Brilliant investment strategy!

Mon, 03/07/2011 - 17:13 | 1027387 Sudden Debt
Sudden Debt's picture

Second rule in Zombieland = Cardio


Mon, 03/07/2011 - 17:27 | 1027441 cougar_w
cougar_w's picture


So it's the "oil over $100/bbl tanks the economy" angle. And then I guess a large liquidation in "anything not nailed down" knocks the bottom out, and the rolling sell-off does the rest.

Maybe not this time, they are ready, there won't be a freefall at least not without a fight. The Fed has a finger on the pomo trigger they might be able to lift things up enough to staunch the bleeding. And they can announce QE3 in no uncertain terms, give a $trillion to the TBTF, ignite an equities buying frenzy. So I guess we'll have to wait and see.

Mon, 03/07/2011 - 17:35 | 1027476 hambone
hambone's picture


I don't get how they simply announce QE3???  How w/ everything juiced beyond belief the Republicans wouldn't have a field day w/ the publicity...pretty sure there would be a very strong negative reaction from a segment of the population. 

Seems QE3 has to be in response to a new "crisis" - what will that "crisis" be???  Engineered, subverted, make believe???  Something has to allow them to do it...I just can't see it yet (and of course they can't survive without it as the T market is a $4-$5T annual black hole that only the Fed can feed to avoid interest rate shock and turn on a dime deflation). 

But how???  In response to war???  The hole right ahead of is sooo large I left to come up w/ any idea, crack pot or not to try and imagine how the Fed avoids the head on w/ reality???

Mon, 03/07/2011 - 17:52 | 1027550 Commander Cody
Commander Cody's picture

Reality?  You want to see logic?  There is only smoke and mirrors.  The Fed will print until the dollar is worthless.  Who else is gonna buy treasuries when the US keeps falling deeper in the hole?  The Fed will print relentlessly as the bankster bitches they are.

Mon, 03/07/2011 - 17:59 | 1027552 cougar_w
cougar_w's picture

The Fed will get their head-on with reality, and they know that for a fact.

They want to hit the wall long after everyone else, that's all. Whoever hits the wall last dies with the most toys. And wins.

i think they have their crisis in the bag; a surge in oil, talk of Saudi peaking, and Arab unrest in the wings. We haven't had a noteworthy stocks down-day in 2 years. They can wait for a bad day (-5%) and go to Congress trotting out the MAD donkey, and they'll get $2T and a "please save us!" cry on bent knee across both parties.

A repeat of 2008 (or worse) simply will not be tolerated nor allowed.

And really they only have to play this game until Europe implodes and China ignites in riots. And then the world starts over, though we haven't seen much of that playbook as yet. My guess is neoFeudalism of some flavor, but I would not be surprised to see a military takeover centered in the US and spreading from there. But that's just me guessing.

Mon, 03/07/2011 - 18:51 | 1027759 velobabe
velobabe's picture

cougar, the best kitty of them all† what about the flash crash, that was pretty dramatic down day, though didn't last.

guess what, øhedge got voted #9th best financial blog, whatever that means. also øH only needs 71 more tweeters to follow øhedge to get to 20,000 twenty thousand strong. i think this charlie sheen guy should do some pomo for ZH.

Mon, 03/07/2011 - 19:51 | 1027891 disabledvet
disabledvet's picture

flash crash...ahhh, the good old days.  "breaking trades" no less!  Wall Street as crock of shit in totality.  I must say some "Charlie Sheen pomo" would entertaining...perhaps "live from Port a Prince" (sp?) just to "make it seem like something other than a show."  the fact is "all of America is on the dole."  they'll blow up their banker--but will do anything to keep that gov check flowing.  you know, i know it, and now even your Banzai's evil kittie's know it too.

Mon, 03/07/2011 - 20:02 | 1027928 cougar_w
cougar_w's picture

Hey there velo ... They staged the flash-crash last time. I don't recall the reason (something in Congress was being voted on that week IIRC) and they threw a wrench in the gears to scare shit out of people who needed some schooling.

Worked too. It's been a long time without anything to upset their profit making. Though it did spook off retail traders for a while, I think they hadn't planned for that part.

They'll do that kind of thing once a week if they have to. It means nothing and retail is already dead.

Mon, 03/07/2011 - 18:00 | 1027580 MolotovCockhead
MolotovCockhead's picture

   I don't get how they simply announce QE3???

This one is easy! Just send in their Wall Street speculators to drive up the oil price! When gas hit $5 at the pump, it will be more than reason enough for Helicopter Ben to hit the printing press at full speed! That way they get to keep the money they make from the oil speculation and their cronies get a new bout of QE shower. One stone two birds.

Mon, 03/07/2011 - 19:50 | 1027895 disabledvet
disabledvet's picture

even easier than that.  it's called "Helicopter Obama" now.

Mon, 03/07/2011 - 17:01 | 1027356 irishlink
irishlink's picture

Finally!! The American people are waking up! How come MSM have not highlighted this today?  The bankers will be wary of their customers now. What will happen when rates return to norm or higher and a whole generation goes into shock?

Mon, 03/07/2011 - 17:03 | 1027365 Sudden Debt
Sudden Debt's picture

Tyler, what do you think will happen to silver if there would be a correction?

would silver and gold also correct like it did in 2009?


Mon, 03/07/2011 - 17:14 | 1027394 luk427
luk427's picture

I think the physical buying would be beyond belief if we had that kind of correction.

Mon, 03/07/2011 - 17:05 | 1027367 ghostfaceinvestah
ghostfaceinvestah's picture

There will be no major correction until QE ends.

Then, the word "major" won't come close to describing the correction.  "Epic" maybe.

Mon, 03/07/2011 - 17:10 | 1027376 plocequ1
plocequ1's picture

Exactly. Using a question as a headline to a blog usually means the answer is obvious. The answer is NO, While QE and POMO are running the show

Mon, 03/07/2011 - 17:31 | 1027460 serotonindumptruck
serotonindumptruck's picture

The words 'catastrophic' or 'cataclysmic' might be more fitting.

Mon, 03/07/2011 - 17:50 | 1027541 AccreditedEYE
AccreditedEYE's picture

If AAPL drops 150 points, does it make a sound?

Mon, 03/07/2011 - 18:54 | 1027763 velobabe
velobabe's picture

android beat apple out in january.

Mon, 03/07/2011 - 17:07 | 1027373 buzzard beak
buzzard beak's picture

Well with hunter instincts like those, kitty, you better turn yourself into the zoo. People paying more for oil means they spend less on other stuff, and the companies that produce other stuff make less money. Duh.

I can tell you this oil price move is definitely sending shivers through property markets. Buyers are taking a pause. But then real estate buyers are still some very nervous rabbits. Don't take much to make them scurry.

Mon, 03/07/2011 - 17:26 | 1027406 hambone
hambone's picture

Tyler - yup, agree with you - but not sure I'm ready to get my face ripped off again being significantly short this market.  Probably is exactly the signal that the market is cooked when bears stay in hibernation rather than short again.

Does feel like the ground is shaking under our feet.

You going short???  Anyone going short???  Some of you are the biggest bears (myself included) and none interested in going short???  Either the opportunity of a lifetime or the final trap in the market capture from March '09 on???  This is no doubt how markets and investment die!!!  Utter breakdown of faith, confidence, and law.

Mon, 03/07/2011 - 17:29 | 1027452 redpill
redpill's picture

Who wants to be the first lamb to try to fight the Fed?  It's like trying to win a game of monopoly against your cheating nephew who always insists on being the banker.

Mon, 03/07/2011 - 17:57 | 1027562 hambone
hambone's picture

I've already made my mega donation - I'm a big believer in the church of the Fed now!!!  I'm sure they're using my money for rebuilding Haiti or the like...

Mon, 03/07/2011 - 18:09 | 1027610 MolotovCockhead
MolotovCockhead's picture

   I'm a big believer in the church of the Fed now!!!  I'm sure they're using my money for rebuilding Haiti or the like...

They will take your money and sacrifice more young virgins instead.....they are satanist. Save yourself before it too late!!

Mon, 03/07/2011 - 17:36 | 1027468 cosmictrainwreck
cosmictrainwreck's picture

I finally threw in the towel on shorts, per se, but hold/trade VXX & TVIX as potential pay-offs (or "insurance") 

Mon, 03/07/2011 - 18:37 | 1027706 DUNTHAT
DUNTHAT's picture

toe in with sds calls

if spy closes below 130 add to position, then spy goes to 123

Mon, 03/07/2011 - 19:03 | 1027792 atlee
atlee's picture

I think there are small battles on the short side of equities to be won. I am long some spxu at 16 from Thursday afternoon. I will bail at 15. Hit 17 and change today intra day. Up here near all time highs with the MENA on fire and one quarter left in QE 2? Seems as good a place as any. I am also way long the metals and miners from last fall.

Mon, 03/07/2011 - 17:30 | 1027442 TradingJoe
TradingJoe's picture

Oil MUST RUN its Course! POMO/QE MUST END! Rates Must Rise ($)!

No Correction if previous is not "taken care" of!


PS All of the above would, of course, choke "any recovery" so...None of The Above


Oil will go higher until price chokes demand, Oil goes Down, markets go up!

Business as usual!

Mon, 03/07/2011 - 17:41 | 1027478 Franken_Stein
Franken_Stein's picture

May I add some interesting factual information that most Americans are not aware of and don't know of ?


1. Goldman Sachs

is an Investment bank, founded in 1869 by German-Jewish immigrant Marcus Goldman (1821-1904) in Pine Street, New York as "M.Goldman & Co.".


2. The Federal Reserve System

is the brainchild of German-Jewish Banker Paul Moritz Warburg (1868-1932), of the Hamburg based banking dynasty M.M Warburg & Co., established in 1913 by enactment of the Federal Reserve Act (aka Owens-Carter Act), a law rammed through Congress in a pre Christmas session, that few if any Senators had fully read through, not to mention fully understood.

A privately owned bank from then on was allowed to issue the legal tender of the United States of America, the Federal Reserve Note a.k.a. the U.S. dollar.


Paul M. Warburg was vice chairman of the Fed from 1916-1918.

He was also member of Council on Foreign Relations (CFR).

Paul M. Warburg is the author of two books:


Plan für eine Zentralbank (1903) (Later: A Plan for a Modified Central Bank (1907))

Defects and Needs of Our Banking System (1907)


3. The Council on Foreign Relations (CFR)

is an American politico-financial group

of American businessmen, politicians, corporations and public figures from media and

culture whose goal is nothing less than world domination under American hegemony

through and by installation of:

1. puppet regimes in developing countries and exploitation of their natural resources

2. binding and pressuring of democratically elected governments in developed countries who are officially touted as "allies" of the American empire, but are reduced to mere vassal status



Strangely enough, all these institutions are dominated by a certain group of people.

I'm not saying anything, I'm just saying.


I would not necessarily call them sociopaths, although ...

Mon, 03/07/2011 - 17:50 | 1027502 hambone
hambone's picture

BTW - Blacks dominate the NBA, Koreans dominate the LPGA, Samoans dominate the NFL, Jewish guys dominate the smart olympics, blondes dominate the dimwit olympics.  Only trouble is there's about a million exceptions to everyone of these.

Funny thing is, my Jewish neighbors aren't seeing any of that money from wall street.  Seems they, like me have to work for a living.  If there is some Jewish conspiracy, they want in on it so they don't have to work so hard to put their four boys through school.  I've got a strange feeling it's a greedy cabal or fuckers without morals or a conscience that are driving this...probably mostly white, mostly male, somewhat Jewish, more so WASP.  And these fuckers make up .25% of the population and I'm pretty sure they wouldn't share w/ their mother let alone someone of similar religion, race, whatever.

Mon, 03/07/2011 - 17:57 | 1027564 Franken_Stein
Franken_Stein's picture

Lloyd Craig Blankfein's private address:


15 Central Park West

Upper Westside

10023 New York City

State of New York

United States of America

Mon, 03/07/2011 - 18:02 | 1027589 hambone
hambone's picture

I'm all for fuckers having their day but they have to earn their stripes through greed and avarice (ala Mr. Blankfein) rather than through color, religion, blah, blah.

Mon, 03/07/2011 - 18:01 | 1027583 trav7777
trav7777's picture

lol...not much clue about how jewish nepotism works, huh?

Mon, 03/07/2011 - 18:07 | 1027599 hambone
hambone's picture

Different than the Chinese, different than the Mormons, different than the Catholics - look, they are all clubs that ensure their children are educated, have capability, and have opportunity. 

Big jump from this to worldwide cabal in the name of Judaism or whatever.  It's all in the name of greed and power for the few, definitely not to be shared w/ the me on that.

Mon, 03/07/2011 - 21:08 | 1028159 gigit
gigit's picture


Mon, 03/07/2011 - 23:01 | 1027807 velobabe
velobabe's picture

you know what i have deduced over the weekend. i don't think jewish people are very good athletes. not to be demeaning with that comment. i have been in sports my whole life, and don't remember a majority of participants or athletes if you want to label, to be jewish. golfers maybe, but not sure if they have been awarded being categorized as athletes. any ways, i think they just kind of suck athletes by owning them rather then exercising themselves. not to disparage any one here with my comment. i just don't think jewish people are that interested in achievement in sports. it is probably bekneeth them. they would rather make money off of them. i kind of see this situation with a lot of these rich elites and CFR people. they just don't want to sweat, or get buff, not in the koran or bible or whatever the book they read says. not to be mean to any one, just my own observations of life. jewish runners maybe, that is more their style. but they like to associate themselves with the top or world class athletes. well a bit of a parasite, in this regards. not that one way or the other is better or bad then the other, just a personal observation†

  well i am obviously stoned†

Mon, 03/07/2011 - 18:58 | 1027779 velobabe
velobabe's picture

oh i can say these CFR are sociopaths, i can almost guarantee they are up to not good, if not evil. i could be hired out for tracking some of these varmints. we need to hunt these beasts down and then out. out the fucking door.

Mon, 03/07/2011 - 19:55 | 1027911 disabledvet
disabledvet's picture

absolutely.  jewish, protestant, catholic or the worst of them all..."the whatevers"--they're their for a reason.  it's not to play golf as you put so well.  that's for washed up vets like me.

Mon, 03/07/2011 - 17:36 | 1027481 NidStyles
NidStyles's picture

I bet the oil companies will still see record profits.

Mon, 03/07/2011 - 17:39 | 1027492 Sedaeng
Sedaeng's picture

15:00 ET: The Arab League says it supports the creation of a no-fly zone in Libya, according to Reuters. That follows earlier reports that suggested Gulf states were backing the plan.

Read more:
Arab League is giving a go ahead for a no fly zone.  O.o
Mon, 03/07/2011 - 17:45 | 1027524 Quixotic_Not
Quixotic_Not's picture

Pretty soon the entire middle east and north of Afrika will be a no-fly zone, with U$ patrol planes based from of Iraq, Saudi Arabia, Israel and multiple aircraft carriers...

Get ready, WWIII is coming right on schedule!

Mon, 03/07/2011 - 17:46 | 1027518 trav7777
trav7777's picture

we've been looking at all kinds of correlations here for the better part of a year trying to find a reason for a major selloff.  This is becoming like crying wolf or playing the same numbers in the pick 3 1,000 times and then when winning calling it a foolproof system

Mon, 03/07/2011 - 18:45 | 1027737 Tyler Durden
Tyler Durden's picture

And the opposite is.... full faith and credit in the church of central planning? Granted you are guaranteed to pick 3 999 out of 1,000 times. It is the outlier that ends up destroying everyone. But yes, the Fedburo sees all.

Tue, 03/08/2011 - 02:03 | 1028873 trav7777
trav7777's picture ask ME that?

The Fed appears to have limitless current ability to prop the SP500.  that is my observation at the present time; all normal indicators are on TILT until further notice

Mon, 03/07/2011 - 19:59 | 1027923 disabledvet
disabledvet's picture

absolutely.  you don't survive in this bizness for 5 seconds ignoring stuff like this.  in fact "you become a genius" by profiting against it.  ask no less than Buffet himself.  And read the book "Snowball" trav7777.  I did.  Committed to memory as they say.  Not that i don't love your comments btw.  the word "awesome" comes to mind.

Mon, 03/07/2011 - 17:45 | 1027521 Duffminster
Duffminster's picture

for me the difference between 2008 and now is that the Federal Reserve and the Exchange Stabilization working group are far more ready to do whatever it takes to keep the stock market from crashing and they no full well that if they allow the S&P to begin accelerating downward over any substantial time period that a financial crisis an order of magnitude larger than that of 2008 will then be initiated. 

despite the rhetoric, the only path that ensures survival of the largest financial institutions and the central banks is near infinite Quantitative Easing.   They will do this until cold fusion or some other quantum leap in energy production efficiency and aknowledgement of the need for global population control is required.

it is really clear to me that the real estate markets (commercial and residential) are at a tipping point.  if the QE is removed, Fannie and Freddie dismantled, stimulus to the poor and out of work, cut, then we could see a drop to S&P 666 or lower and a new global financial crisis of near unimaginable proportion.  the central bankers know this too and they also know that if Europe and the United States push austerity too hard at this time, they will only accelerate the radius and extension of the current revolutionary mind set.  Only America remains isolated because the Koch's and their ilk have an easy time brain washing the largely already brain washed American anti-intellecutal culture of TV worshippers who are completely controlled by the agenda of the plutocracy. 

America is kept in a state of near contant intellectulal subnambulance and has not yet figured out that they are getting screwed every day, with much of the wealth of some of these robber barrons having been stolen once again from the Native American and through political graft, allthough now it is legal because they have totally corrupted the political process with money and the Supreme Court is also fully corruptedly compromised by corporatism and will now allow unlimited amounts of secret money to be the largest factor in political influence, i.e. corruption.




Mon, 03/07/2011 - 18:02 | 1027591 trav7777
trav7777's picture

wealth wasn't stolen from native americans.

The land had no value to them beyond someplace to stand on

Tue, 03/08/2011 - 05:39 | 1028983 1984
1984's picture

Now they've got no place to stand on, and too dead to stand.

Mon, 03/07/2011 - 17:47 | 1027526 Victor Berry
Victor Berry's picture

The commodity bubble may burst if equities crater and the highly leveraged TBTF players need to cover margin calls and the only place to get the money is from commodity bubble profits.

Of course, this assumes that the TBTF players will make margin calls on themselves instead of simply doubling down and increasing the leverage limits on their underwater equity holdings.

Mon, 03/07/2011 - 17:52 | 1027549 Quixotic_Not
Quixotic_Not's picture

It also assumes that valuations in fiat currency will mean anything from 2012 forward...

ROFL at the brain-washed ungulates!

Mon, 03/07/2011 - 18:22 | 1027659 Brokenarrow
Brokenarrow's picture

Cramer says, "the govt needs to sell nymex futures"!

its so fricking crooked

Mon, 03/07/2011 - 18:39 | 1027718 Flakmeister
Flakmeister's picture

For the record, I have advised clients to sell non PM and Energy assets. Depending on the 100-200% gains they have on PM/Energy assets they may wish to liquidate based on individual tax situations...Speculative assets in the PM sector, non producers with low cash flow are to be sold as warranted.

I mean what do you do when you picked up 8000 shares of PBT when it was 8?

Mon, 03/07/2011 - 20:06 | 1027933 disabledvet
disabledvet's picture

fortunes across the board.  short at your own peril.  we have the legal authority to go into Libya--it's called not only Lockerbie but a "corrupt Scottish legal system" as well.  You may thank Upstate NY if you wish.  Having said that I still think a sell off is warranted as you say "based on gains alone."  The market didn't just go up during WWII.  And of course "there's that pesky problem of winning the war"--let alone fighting it.  has anyone thought about how to feed and clothe a 10 million man American military?  I take that back...somebody probably has done the latter...

Tue, 03/08/2011 - 08:47 | 1029120 Flakmeister
Flakmeister's picture

With the risk of a hyperinflationary spiral, going short is not an option until it is clear the market is all but crashing. Better to be down 5% than to be wiped out....

Mon, 03/07/2011 - 20:26 | 1027982 lsjcma
lsjcma's picture

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Mon, 03/07/2011 - 22:15 | 1028306 Robslob
Robslob's picture



Watch the new TV show "Secret Millionare"...they will save us...fuck

Tue, 03/08/2011 - 00:57 | 1028738 Grand Supercycle
Grand Supercycle's picture

I'm sticking to my call on Feb 22 that the DOW topped @ 12,391 on Feb 18 2011 and thus signals the end of the rally.

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