Bear Stearns

Reggie Middleton's picture

2010 Contrarian Prediction of the Disastrous Consequences of ZIRP & Free Money Policy In the Banking System, Year 5





In 2010, contrary to nearly every pundit, analyst and economist popularly published, I proclaimed ZIRP would starve the banks. Fast forward 5 years and banks are looking famished and things are getting worse 'casue more bailouts are coming before we finish ending the last bailout program (ZIRP) - The Federal Reserve has decided to let U.S. banks make limited use of municipal bonds to meet liquidity requirements

 
Tyler Durden's picture

Stan Druckenmiller's "Horrific Sense" Of Deja Vu: "I Know It's Tempting To Invest, But This Will End Very Badly"





“I just have the same horrific sense I had" before, Druckenmiller said to an audience at the Lost Tree Club in North Palm Beach, Florida (according to a transcript obtained by Bloomberg). "Our monetary policy is so much more reckless and so much more aggressively pushing the people in this room and everybody else out the risk curve that we’re doubling down on the same policy that really put us there."

 
Tyler Durden's picture

Can't Wait To Read Bernanke's Memoirs? Here Are All The Timeless Statements By The Former Fed Chairman





We know it will be next to impossible to wait until October when this book of toner repair and printer cartridge replacement wisdom comes out, here is a sampling of timeless soundbites by the former Fed Chairman and current blogger, that should be enough to hold readers over.

 
Tyler Durden's picture

Ben Bernanke Pens First Blog Post, Defends Fed, Says He "Was Concerned About Seniors"





"When I was chairman, more than one legislator accused me and my colleagues on the Fed’s policy-setting Federal Open Market Committee of “throwing seniors under the bus” (to use the words of one senator) by keeping interest rates low. The legislators were concerned about retirees living off their savings and able to obtain only very low rates of return on those savings. I was concerned about those seniors as well."

- Ben Bernanke first blog post

 
Tyler Durden's picture

Finally The "Very Serious People" Get It: QE Will "Permanently Impair Living Standards For Generations To Come"





"In the long run classical economics would tell us that the pricing distortions created by the current global regimes of QE will lead to a suboptimal allocation of capital and investment, which will result in lower output and lower standards of living over time. In fact, although U.S. equity prices are setting record highs, real median household incomes are 9 percent lower than 1999 highs. The report from Bank of America Merrill Lynch plainly supports the conclusion that QE and the associated currency depreciation is not leading to higher global output. The cost of QE is greater than the income lost to savers and investors. The long-term consequence of the new monetary orthodoxy is likely to permanently impair living standards for generations to come while creating a false illusion of reviving prosperity."

 
Tyler Durden's picture

Markets Vs Economy - The Great Disconnect





So, while the markets have surged to "all-time highs," the majority of Americans who have little, or no, vested interest in the financial markets have a markedly different view. Currently, mainstream analysts and economists keep hoping with each passing year that this will be the year the economy comes roaring back but each passing year has only led to disappointment. Like Humpty Dumpty, all the Fed stimulus and government support has failed to put the broken financial transmission system back together again. Eventually, the current disconnect between the economy and the markets will merge. Our bet is that such a convergence is not likely to be a pleasant one.

 
Tyler Durden's picture

Citi Warns Of "Dancing", "Music" And "Complicated Things" For The Second Time





When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”  
- Citigroup CEO Chuck Prince July 9, 2007

"Depressingly, our instinct is that those new forecasts are more likely too conservative than too aggressive. Longer-term, sweet dreams really aren't made of this."
- Citigroup Strategist Hans Lorenzen February 20, 2015

 
Tyler Durden's picture

Austria's 3rd Largest Bank Goes Full Bear Stearns: CEO Blames "Short Sellers" For Firm's Demise





You know it's bad when... you start blaming speculators. Very reminiscent of the "it's not us, we have a solid balance sheet, it's the short selling speculators" bullshit in the days before and after the stock crashes of American Insurance Group, Bear Stearns, Lehman Brothers and Merrill Lynch; mere days after his bank's bonds crashed, the CEO of Raiffeissen Bank (Austria's 3rd largest) has stated (unequivocally) that "panic was created artificially," blaming short-sellers for his bank's demise.

 
Tyler Durden's picture

The Fed Is Now Frontrunning Value Investors





The Fed has been supporting the market since the late 1980s. But there is an important difference between the actions of the Fed under Yellen versus Greenspan and Bernanke. In 2008, the Fed allowed Bear Stearns and Lehman Brothers to fail. Given the massive wipeout that followed, this decision is now viewed as a dangerous mistake. Having learned their lesson, the Fed is now rushing in to support the market in response to even routine 20% drops. In this way, the Fed is acting like a value investor who demands a small margin of safety before investing.... Since 2010, however, the Fed has changed tactics. The Fed is now reacting far more quickly. Small market selloffs are followed by immediate responses. By quickly riding to the rescue, the Fed is effectively front-running value investors.

 
Tyler Durden's picture

"Greece Is Bear Stearns. Italy Is Lehman" - 7 Quick Points On Europe





In a fundamentals-driven market you need to look at fund flows; in a Narrative-driven market you need to look at Narrative flows. With Draghi’s announcement last Thursday, there is no longer a marginal provider of market-supportive monetary policy Narrative. Or to put this in game theoretic terms, the 2nd derivative of the Narrative of Central Bank Omnipotence just flipped negative. We’ve shifted from an accelerating Narrative flow to a decelerating Narrative flow, and that inflection point in profoundly important in game-playing. The long grey slide of the Entropic Ending begins.

 
Tyler Durden's picture

"Leverage Mismatches" - Why Q-ECB May Not Be A Favorable Development





It’s not entirely clear what will happen in the near term, but the financial markets are already pushed to extremes by central-bank induced speculation. With speculators massively short the now steeply-depressed euro and yen, with equity margin debt still near record levels in a market valued at more than double its pre-bubble norms on historically reliable measures, and with several major European banks running at gross leverage ratios comparable to those of Bear Stearns and Lehman before the 2008 crisis, we're seeing an abundance of what we call "leveraged mismatches" - a preponderance one-way bets, using borrowed money, that permeates the entire financial system. With market internals and credit spreads behaving badly, while Treasury yields, oil and industrial commodity prices slide in a manner consistent with abrupt weakening in global economic activity, we can hardly bear to watch...

 
Tyler Durden's picture

The End Of The World Of Finance As We Know It





The world of investing as we’ve come to know it is over. Financial markets have been distorted to such an extent by the activities, the interventions, of central banks – and governments -, that they can no longer function, period. The difference between the past 6 years and today is that central banks can and will no longer prop up the illusionary world of finance. And that will cause an earthquake, a tsunami and a meteorite hit all in one. If oil can go down the way it has, and copper too, and iron ore, then so can stocks, and your pensions, and everything else.

 
Tyler Durden's picture

The Center's Got To Give





Thing is, that whole line about how lower oil prices were going to be a boost for our economies was ignorant from the start. And there’s still plenty people believing just that. That may explain those EU stock exchange gains. That sort of thing all comes from people who don’t understand to what extent oil is pivotal to our societies. We’re not in 2008 anymore, when an oil price drop actually helped us crawl out of a tight spot. We’re $50 trillion down the road, and there won’t be another $50 trillion, or another road. For all intents and purposes, we are the center today, and we cannot hold this way.

 
Reggie Middleton's picture

Toil, Trouble, Crash and Bubble! Monetizing The Biggest Crash of the Millenium?





In December I proclaimed that we'll likely see multiple crashes for 2015. I don't say this lightly & I have a track record on this topic that's foolish to ignore!

 
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