TrimTabs Asks: Who Is Responsible For The Non-Stop Market Rally Since March; Gives Some Suggestions

Tyler Durden's picture

Submitted by TrimTabs' Charles Biderman

Are Federal Reserve and U.S. Government Rigging Stock Market?  We Have No Evidence They Are, but They Could Be.  We Do Not Know Source of Money That Pushed Market Cap Up $6+ Trillion since Mid-March.

The most positive economic development in 2009 was the stock market rally. Since the middle of March, the market cap of all U.S. stocks has soared more than $6 trillion.  The “wealth effect” of rising stock prices has soothed the nerves and boosted the net worth of the half of Americans who own stock.
 
We cannot identify the source of the new money that pushed stock prices up so far so fast.  For the most part, the money did not from the traditional players that provided money in the past:
 

  • Companies.  Corporate America has been a huge net seller.  The float of shares has ballooned $133 billion since the start of April.
  • Retail investor funds.  Retail investors have hardly bought any U.S. equities. Bond funds, yes. U.S equity funds, no.  U.S. equity funds and ETFs have received just $17 billion since the start of April.  Over that same time frame bond mutual funds and ETFs received $351 billion.
  • Retail investor direct. We doubt retail investors were big direct purchases of equities.  Market volatility in this decade has been the highest since the 1930s, and we no evidence retail investors were piling into individual stocks.  Also, retail investor sentiment has been mostly neutral since the rally began.
  • Foreign investors.  Foreign investors have provided some buying power, purchasing $109 billion in U.S. stocks from April through October.  But we suspect foreign purchases slowed in November and December because the U.S. dollar was weakening.
  • Hedge funds.  We have no way to track in real time what hedge funds do, and they may well have shifted some assets into U.S. equities.  But we doubt their buying power was enormous because they posted an outflow of $12 billion from April through November.
  • Pension funds.  All the anecdotal evidence we have indicates that pension funds have not been making a huge asset allocation shift and have not moved more than about $100 billion from bonds and cash into U.S. equities since the rally began.

If the money to boost stock prices did not come from the traditional players, it had to have come from somewhere else.
 
We do not know where all the money has come from.  What we do know is that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers.  Why not support the stock market as well?
 
As far as we know, it is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures.  Moreover, several officials have suggested the government should support stock prices.  For example, former Fed board member Robert Heller opined in the Wall Street Journal in 1989, “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.”  In a Financial Times article in 2002, an unidentified Fed official was quoted as acknowledging that policymakers had considered buying U.S. equities directly, not just futures.  The official mentioned that the Fed could “theoretically buy anything to pump money into the system.”  In an article in the Daily Telegraph in 2006, former Clinton administration official George Stephanopoulos mentioned the existence of “an informal agreement among the major banks to come in and start to buy stock if there appears to be a problem.”

Think back to mid-March 2009.  Nothing positive was happening, and investor sentiment was horrible.  The Fed, the Treasury, and Wall Street were all trying to figure out how to prevent the financial system from collapsing. The Fed was willing to print whatever amount of money it took to bail out the system.
 
What if Ben Bernanke, Timothy Geithner, and the head of one or more Wall Street firms decided that creating a stock market rally was the only way to rescue the economy?  After all, after-tax income was down more than 10% y-o-y during Q1 2009, and the trillions the government committed or spent to prop up all sorts of entities was not working.
 
One way to manipulate the stock market would be for the Fed or the Treasury to buy $20 billion, plus or minus, of S&P 500 stock futures each month for a year.  Depending on margin levels, $20 billion per month would translate into at least $100 billion in notional buying power.  Given the hugely oversold market early in March, not only would a new $100 billion per month of buying power have stopped stock prices from plunging, but it would have encouraged huge amounts of sideline cash to flow into equities to absorb the $300 billion in newly printed shares that have been sold since the start of April.
 
This type of intervention could explain some of the unusual market action in recent months, with stock prices grinding higher on low volume even as companies sold huge amounts of new shares and retail investors stayed on the sidelines. For example, Tyler Durden of ZeroHedge has pointed out that virtually all of the market’s upside since mid-September has come from after-hours S&P 500 futures activity.

If we were involved in a scheme to manipulate the stock market, we would want to keep it in place until after the “wealth effect” put a floor under the economy of, say, three quarters of positive GDP growth.  Assuming the economy were performing better, then ending the support for stock prices would be justified because a stock market decline would not be so painful.

We want to emphasize that we have no evidence that the Fed or the Treasury are throwing money into the stock market, either directly or indirectly.  But if they are not pumping up stock prices, then who else is?
 
Equity Mutual Fund Cash Equal to 3.8% of Assets in November, Just above Record Low of 3.5% in Mid-2007.  U.S. Equity Funds Get Estimated $5.1 Billion in December, First Inflow in Five Months.

The Investment Company Institute reported Wednesday that equity mutual funds held just 3.8% of their assets in cash and equivalents in November.  To put this percentage into perspective, the record low was 3.5% in June 2007 and July 2007.  While the amount of cash increased $8.1 billion in November, assets shot up $229.1 billion, leaving the ratio of cash to assets unchanged. 
 
Source: Investment Company Institute.

U.S. equity fund flows reversed sharply in December.  After posting fairly large outflows from September through November, U.S. equity funds received an estimated $5.1 billion (0.1% of assets) this month.
 
Apart from the shift in U.S. equity fund flows, mutual fund flows did not change much in December.  Global equity funds continued to post moderate inflows, taking in an estimated $7.1 billion (0.7% of assets).  This month’s inflow is in line with the inflows of $7.8 billion in October and $6.0 billion in November.
 
Finally, bond funds continued to rake in huge amounts of cash.  They received an estimated $25.8 billion (1.2% of assets), putting them on track to post an unprecedented ninth consecutive monthly inflow exceeding $25 billion.
 
Mutual fund investors tend to be poor market timers.  Based strictly on mutual fund flows, the clear contrarian play would be to short bonds right now. This year’s record inflow of $375 billion into bond funds is 44% higher than the record inflow of $260 billion into U.S. equity funds at the stock market top in 2000.
 
Note: Flows for December 2009 are estimates based on our daily survey and data from the Investment Company Institute.

We Plan to Stay Neutral (0% Long) on U.S. Equities This Weekend.  Investment Demand Remains Favorable: TrimTabs Demand Index Bullish at 58.9 on December 29.

We plan to stay neutral (0% long) on U.S. equities in our model portfolio.  As we discussed Tuesday, real-time income tax data shows no sign of a recovery in the U.S. economy.
 
But we do not want to be short mostly because investment demand is favorable. The TrimTabs Demand Index (TTDI), which uses 21 flow and sentiment variables to assess overall investment demand was 58.9 on Tuesday, December 29.  While this reading is well below the interim high of 77.1 on Friday, December 18, it is still above the neutrality line of 50.  The index is so bullish mostly because indicators that tend to be leading—notably excess margin debt and the cash balance of equity mutual funds—are indicative of greed.

Corporate Liquidity Likely to Be Neutral to Bullish Next Week.  New Offering Calendar Will Be Virtually Shut Down, While Corporate Buying Likely to Remain Light.
 
Another reason we plan to stay on the sidelines is that corporate liquidity is likely to be neutral to bullish next week.
 
On the sell side, new offerings are likely to be light because underwriters will just be returning from extended vacations.  New offerings amounted to just $350 million in the week ended Wednesday, December 23, and they are almost certain to be lower this week (Dealogic reports that less than $50 million is scheduled for later this week in addition to the $4 million that priced Thursday through Tuesday).
 
On the buy side, the economy’s weakness suggests corporate buying is unlikely to surge into the New Year.  Nevertheless, new cash takeovers and new stock buybacks combined are likely to rival or exceed new offerings next week.
 
Taking a look back, corporate liquidity was extremely bearish in December.  The $75.5 billion in corporate selling (new offerings + net insider selling) was 4.2 times the $18.0 billion in announced corporate buying (new cash takeovers + new stock buybacks).  Yet corporate selling was highly concentrated, with large follow-on deals for three big TARP banks accounting for 79% of the corporate selling.  We expect corporate liquidity to turn bearish again starting in the third week of January as companies take advantage of bubbly stock prices to unload more new shares.

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Shocker's picture

Marc Faber and Gerald Celente both are spot on.

Oso's picture

"-A stronger dollar will be positive for equities based on historical market data"

 

wtf?  right away this discredits Faber.  Using historical market data when the USD is now a funding currency makes zero sense.  And not to mention the outrageous dollar vs everything else correlation that happened til last week.

The problem with R-tards looking at historical data is that they decide to give it precedent over logic and common sense, and they close their eyes to WHAT IS HAPPENING IN THE REAL WORLD.

chumbawamba's picture

Where do I get me some TrimTabs?  I'd like to go on a post-holiday diet.

I am a fatter Chumbawamba.

WaterWings's picture

Don't go to the gym next week. Just put some of your stockpiled canned food into a backpack and walk around the block 80 times. All the slaves from Wall-E will have all the treadmills and stairsteppers on a 15-minute wait the first half of January while they try to figure out how it works. Actually, go for the sad comedy:

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

SilverIsKing's picture

Not sure if this had been posted on ZH:

Bankers Get $4 Trillion Gift From Barney Frank: David Reilly

http://www.bloomberg.com/apps/news?pid=20601039&sid=a48c8UpUMxKQ

Rainman's picture

Yes, it's been posted by commenters a couple times. I'm hoping Tyler/Marla take it further. A stunning sneak mega bailout buried in a 1200 page Bwaney Bill.

Horrifying....primarily because our government masters believe it will take that much money to keep bailing the banks in 2010.....and their willingness to do it is even more horrifying.

Anonymous's picture

Who is buying? Simple answer - the shorts! its been one huge short squeeze.

Anonymous's picture

please think before you post. Shorts? look at the data, not much shorting going on in the last 9 months

Anonymous's picture

It's only a little suspicious that an economic illiterate like Obama would be able to almost exactly pick the market bottom.

His incoherent "profits and earnings ratio" statement came just days before the market started shooting up like a meteor.

tewkatz's picture

I think it was also something like, 'this is a great time to buy stocks' and I remember laughing that a prez would be giving stock advice...that was, what, a 40+% rise ago?

Chopshop's picture

yeah, maybe OB was actually looking at chart.

hmmm, 3.6.09 high wave candlestick on the INX ... 14:00 - 16:00 full-fledged breakout by the XBD ... week after Warren's letter to shareholders ... innumerable methodologies all actually signaling from the close of March 9th that there an extremely high possibility of 3 - 8 trading days before a Primary wave 1 (circle) bottom.

So yeah, Obama and our PPT overlords definitely timed their buying to actual charts and, gulp, social mood.

i know; how gauche.

kane1559's picture

Higher offering levels may explain some of the rally.  The Fed has manipulated credit markets thereby decreasing spreads thereby decreasing discount rates.  The IG index has come down from ~300bps in March to ~85bps today, while the HY Index has come down from ~1400bps to about ~500bps today.   A back of the envelope DCF calculation demonstrates that such a move could explain 20-30% of the rally. 

Anonymous's picture

Yes, government-sponsored mispricing of risk on an extreme scale. Ain't it wunnerful?

Cursive's picture

FRB buying equities?  That's a no-brainer.  The BOJ openly admits to such.  Given the outrageousness of the FBR's actions since September 2008, by the time it is revealed, we will have moved on.  This is the meat of the article, though:

 

We plan to stay neutral (0% long) on U.S. equities in our model portfolio.  As we discussed Tuesday, real-time income tax data shows no sign of a recovery in the U.S. economy.
 
But we do not want to be short mostly because investment demand is favorable. The TrimTabs Demand Index (TTDI), which uses 21 flow and sentiment variables to assess overall investment demand was 58.9 on Tuesday, December 29.  While this reading is well below the interim high of 77.1 on Friday, December 18, it is still above the neutrality line of 50.  The index is so bullish mostly because indicators that tend to be leading—notably excess margin debt and the cash balance of equity mutual funds—are indicative of greed.

Liberdadedescolha's picture

Feel free to check this chart.

http://1.bp.blogspot.com/_LZb5jzrUPyk/SzzLjEgiZdI/AAAAAAAAAHQ/zbGkLAddJh...

This divergence on RSI will be dadly on the new year, January for start.

Everyone a nice year.
http://midasfinancialmarkets.blogspot.com/

Leo Kolivakis's picture

The folks at TrimTabs claim to be looking at liquidity but they are ignoring the huge sovereign wealth funds in the world, including Norwegian Petroleum Fund, China's CIC, and a ton of other huge funds. Add to this natural global pension flows into stocks every quarter and the trillions from investment banks and hedge funds flush with cash taking leveraged bets, and you see why risk assets are up across the board. The financial world awash with liquidity and asset bubbles will percolate in 2010.

Anonymous's picture

"It is unlikely many pension managers were bold enough to boost stock allocation to take advantage of the market rebound since March.

In fact, some pulled money out of the stock market before it began recovering. Northrop Grumman, for instance, held about half its pension assets in stocks in recent years. Sometime in 2008 it cut the target stock allocation to a minimum of 15% from 45%. So by the end of last year, the allocation had fallen to 22%."

http://online.wsj.com/article/SB1000142405274870424750457460462022245651...

Sovereign wealth funds are not going to prop up
the market for years to come, and from all
indications, pension funds did not head into stocks
this year. Sorry Leo, this was the government,
and I have a feeling you'll be the one still
at the party long after the punchbowl has been
taken away and everyone has gone home.

I'll take Trimtabs research over your endless
inability to see that this will not go on forever.

Anonymous's picture

blah blah blah blah blah

heard that bullshit almost every single day of the last 10 years

vanderrook's picture

As far as we know, it is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures.

There's a possible RICO indictment here somewhere; fortunately, these organizations are operating with the backing of "legitimate law" and the Pope's blessing.

Possible counts could include, but wouldn't be limited to:

wire fraud, counterfeiting, theft, embezzlement, securities fraud, bribery, extortion, etc.

 

Ripped Chunk's picture

Huh!?!?!?   All SOP in the "new book"

Anonymous's picture

Section 14 of the Federal Reserve Act lays out a pretty short list of things that the Federal Reserve is allowed to purchase outright. Mostly, it's short term duration stuff (6 months or less) and notes that are issued by US govt agencies.

That's different than their Section 13 granted rights to lend against anything they feel like in a time of emergency.

Is there a different portion of the Federal Reserve Act that gives them the right to buy whatever they want?

Rick64's picture

The SEC is on it. Not much gets by those guys.

merehuman's picture

o yes . Thank the Regulators for a job well done. Without them, who knows, our market may have become criminalized!

Anonymous's picture

Remember the words of Obama:

"We will do everything to repair the system".

Everything..........

Rigging the market works, until the day the investors/morons at the NYSE understand that the emperor has no clothes.

Anonymous's picture

BREAKING:

FED merged with Kinko's.

New name: "Stinko's"

WaterWings's picture

The stock price always goes up when we own 80%.

Where's Cramer with his noise buttons!

HappyWarrior's picture

 

"The stock market is certainly not too big for the Fed to handle. The foreign exchange and government

   securities markets are vastly larger. Daily trading volume in the New York foreign exchange market is

   $130 billion. The daily volume for Treasury Securities is about $110 billion. The combined value of

   daily equity trading on the New York Exchange, the American Stock Exchange and the NASDAQ

   over-the-counter market ranges between $7 billion and $10 billion."

 

-- Former Federal Reserve governor, Robert Heller in the Wall Street Journal on October 27, 1989

 

Anonymous's picture

Ahhh Sir Barney Frank, Harvard class of 1974. I recall sitting with Barnsie in those days... we would muse about taxation, government theft, and other things...Being a Harvard man he knew well that the government would provide endless riches for he and our classmates on the Wall street. We are entitled to it , you see. A special breed; a special class. One of our classmates, Lawrence Summers, a delicious pederast himself, would tell us of amazing machines that would replicate the 100$ bill over and over without sweat or toil. One fellow a tall Moorish sort, Barrack, would tell us of his fancy notion to nationalize the entire free market of our 50 States. W dare not dream such fanciful thoughts. Dear Professor Bernhake chided our lack of free thinking and progressive notions. But we could only dream of such a society. Ahhh Harvard harvard harvard

Cognitive Dissonance's picture

A ponzi is only called a Ponzi when there are "victims" with money lost. While I vehemently disagree with any type of market manipulation what-so-ever, regardless of its source, I challenge anyone to find an average Joe who has money in a 401(k), IRA, cash brokerage account, mutual funds, pension or individual stocks who isn't extremely happy that half or more of their losses have been recouped over the past 9 months.

Unfortunately, with nearly everyone listening to the same radio station (WII-FM) we have devolved into a "What's In It For Me" (WII-FM) society. Many politicians, business leaders and average Joes, while half drunk and feeling they can speak honestly, will confess they're actually grateful, even relieved, the government did intervene in the markets, pushing them up.

I heard someone the other day spout a rather remarkable statement that pretty much sums it all up. "You can't worry about tommorrow's meal when you're starving today." The ultimate rationalization for doing what ever it takes to eat today, including destroying tomorrow.

SteveNYC's picture

You are right. Just goes to show how dependent on the government this country has become. Makes Europe look good.

Anonymous's picture

Hell, with the capricious, despotic manner in which the last SEC chair on a daily basis outlawed shorting of the stocks of the corporations his buddies "ran" (i.e., used as Ponzi fronts and stole from), we don't only make Europe look good we make Pakistan look good! We make Pakistan look like Switzerland. Learn from the Cherokee: America is a scam run for the wealthy. The Federal government is just the arm of the mafia that won.

Anonymous's picture

Not to take away from your point, but the Cherokee probably took a different lesson: all their wealth and assimilation (the Cherokee were probably the Native American tribe furthest on the road to adopting white culture as their own; there were even Cherokee slaveholders) weren't enough to protect them against the executive power of the state.

Anonymous's picture

How is that a different lesson? It's exactly the same, just drives home the point that there's nothing you can do to prevent the theft, even signing contracts, winning Supreme Court cases, and assimilating to the mafia's tacit "social contract".

Daedal's picture

A ponzi is only called a Ponzi when there are "victims" with money lost.I challenge anyone to find an average Joe who has money in a 401(k), IRA, cash brokerage account, mutual funds, pension or individual stocks who isn't extremely happy that half or more of their losses have been recouped over the past 9 months.

I'm not following? Kevin Bacon didn't have any realized losses until this year but that doesn't mean he wasn't part of a Ponzi scheme just because his statement stated he was experiencing a positive return.

Likewise, I'm sure when  Mr. Bacon saw his statements he was satisfied with the amount of bacon Madoff was bringing him. Nonetheless, the Ponzi scheme was in full bloom at that point.

Just because the Fed propped up 401k's doesn't mean that these very people will not be withdrawing a heavily devalued dollar once they start collecting their 401k's or whether or not they will face a much higher tax bracket upon doing so. Your conclusion applies aptly:

The ultimate rationalization for doing what ever it takes to eat today, including destroying tomorrow.

Cognitive Dissonance's picture

"A ponzi is only called a Ponzi when there are "victims" with money lost."

I wasn't speaking legally but rhetorically. People often determine what is good or bad based upon how they are affected. Very few people have the capacity to step away from their own self interest and actually take a stand that would hurt or harm themselves.

Why haven't "we the people" put up more of a fuss about the blatant governmental and corporate corruption that's being revealed on a daily basis?  Because the average person has made a mostly unconscious calculation that as bad as the corruption is, they are (directly or indirectly) benefiting from the corruption.

People seem to believe, correctly or not, that if the crooks are making money for themselves, "we the people" will also make some money. This perception of mutual benefit has been brilliantly supported by the artificially engineered stock market rise.

This is the perverse reason why for centuries the powers that be have very shrewdly connected the people's well being with the king's well being. Kill the king and you destroy yourself. This may or may not be the actual outcome if you kill the king but it's not facts we're dealing with here, it's perceptions and beliefs. Control the mind and you control the body.

Daedal's picture

This is the perverse reason why for centuries the powers that be have very shrewdly connected the people's well being with the king's well being. Kill the king and you destroy yourself.

Spot on -- I can't help but draw a comparison between your example and our nanny state. How can we fight the system if we get incentive checks (welfare, food stamps, cash for clunkers, social security, etc etc) not to do so?

trav777's picture

The dollar ponzi helps all of us out.

If we destroyed the FIRE economy, we'd all actually have to - shudder - WORK and produce things.

Instead we prefer to speculate and gamble.

Gresham's Law - counterfeit is cheaper

WaterWings's picture

Ding! Then I could quit my job as the overnight mall security and stamp license plates instead.

Yes, the FIRE economy is a slow burn; lots of smokescreen.

Tomified's picture

No Victims? What about technical and fundamental traders who have seen every bearish pattern busted and ridiculous valuations? What about those who believe in free markets? What about  taxpayers, whose money is being shoveled to the upper echelons (those who own stocks)?

Definitely a Ponzi scheme. Everyone is all money good, only as long as it keeps going up. Should enough of them decide to withdraw their money, then losses all around are humongous. Either that or taxpayers become the last bagholder, just as they are with MBS.

 

 

Cognitive Dissonance's picture

"No Victims?"

I didn't say there are "no victims." I was talking about how people view crime based upon their own self interest. I'm speaking big picture here. Take a few steps back and look at human behavior with regard to what is considered good and bad. Most people have a severe deficit of empathy unless they themselves have been hurt.

I really wish people would take the time to read something a few times, let it sink in, give it some thought and then respond. Invariably people reading something the first time let their preconceived notions and points of view distort what they are reading. We all do it regardless of whether we admit it or not.

Anonymous's picture

Technical trading ought to be renamed "circle-jerking". Tell me what value technical trading adds to the economy.

Spot on with the fundamental traders, though. Seen any of them lately, or are they all buying gold, guns and grassland?

h3m1ngw4y's picture

i suggest you read the following:

http://www.safehaven.com/article/19444/trading-for-everyone

 please notice the following quote

Trading builds honor and integrity like few other things can. Why? You are completely at the mercy of your own decisions. When you make a trade that doesn't work out, and it happens often as losing is a major part of trading, you have no one to blame but yourself. Sadly we live in an era where personal responsibility and accountability are dying, people prefer to blame others for their own poor decisions.

so please put this into the context of your writing.

i like the idea beeing the only person responsible for my own actions. if you dont like the rigged markets, nobody is telling you to trade them.

if i make poor decisions, its my doing. by accepting this i choose freedom of decision over greed.

if you think otherwise (how the markets should work) you are part of the problem not the solution

nope-1004's picture

A ponzi is only called a Ponzi when there are "victims" with money lost.

 

A ponzi is only a PONZI when it becomes public knowledge that covert manipulation of financials was taking place.  A ponzi can still be called a ponzi if someone cashes out and wins, but by your definition, a victim who loses money is where the definition lies.

I disagree.  The economy today is one big PONZI.  Gov't intervention in equities, gov't backing insolvent balance sheets, PPT, manipulation of Gold, and desire to lower the price of oil (so that the mid east doesn't gain power) are all components of todays PONZI.

 

But if you want to stick to the "victim" definition, then didn't we all lose money when Ben backed the banks?  Aren't we all victims?

PONZI baby!

Cognitive Dissonance's picture

I'm not speaking legally or morally. I'm simply pointing out how people are conflicted and often incapable of seeing things from a disinterested point of view. I'm talking about human nature here, not legal definitions or actual damages.

It is in the best interest of a corrupt power structure to encourage selfishness in the people, usually through scarcity of resources. As long as people are chasing their own selfish motivations, they will not band together against the governments tyranny. This is what's going on in the world today. Selfish interests pursued by the citizens means more government and corporate corruption and tyranny.

The act of reaching out to work with others means you must stop (at least for a moment) pursuing your own self interests. This is why governments pit their own citizens against each other. We are so busy fighting for the last few scraps of food we don't take a moment to understand why we only have a few scraps of food. Divide and conquer externally morphs into divide and control internally.

Anonymous's picture

Which gives us the answer to why the gubmint would juice the markets - it's not so much about the money poured in - it's more about keeping the game going (not letting the people figure out the magnitude of the scam) so that they can retain power/stay out of jail, etc.

Anonymous's picture

check back with us by sept. 2010, and we'll see how many are still smiling.

Rick64's picture

I agree that most people are happy that the market recovered, but the way they did it was with taxpayer money giving unfair advantages to a few Banks and no transparency at all. Then they over did it to an extent where nobody believes their is any credibility to an actual recovery. They could have toned it down and let a little reality in. I think most people realize that some of it was necessary but overdone at the taxpayers expense.