Will Bernanke Bow Out Before or AFTER Stocks Collapse?

Phoenix Capital Research's picture


Back in January, I noted that the Federal Reserve had subtly changed its language regarding the effectiveness of QE as a  monetary strategy.


The first indication came from the Fed’s December 2012 FOMC minutes (the meeting during which the Fed announced QE 4). Since this time there have been several key developments. They are:


  1. Bernanke has announced he will not be attending the Fed’s annual Jackson Hole meeting.


  1. The Fed’s favorite reporter at the Wall Street Journal, Jon Hilsenrath, has written a story indicating that the Fed is considering tapering off its QE efforts before the end of the year.


  1. Bernanke all but admitted that stocks are in a bubble as well as the possibility of a “sharp move.”


Regarding #1, Bernanke claims he can’t make the Jackson Hole meeting due to a scheduling conflict. This is akin to the President of the US announcing he cannot give the State of the Union address due to a scheduling conflict. It is, in a word, impossible.


Much rather, Bernanke is signaling that he is looking to step down at the end of his term as Fed Chairman in January 2014.


If this is the case, then Bernanke is likely thinking about his legacy. Will be leave the Fed with not a pinch of ammo left in its arsenal?


Not likely.


Which brings us to item #2. Jon Hilsenrath is the Fed’s favorite means of leaking its policies to gauge the public’s reaction. Indeed, Hilsenrath broadcasted the Fed’s QE 2, 3, and 4 announcements well in advance of the official Fed announcements.


With that in mind, Hilsenrath’s latest piece about the Fed tapering QE off before the end of the year is very likely a signal from the Fed.


If Bernanke is going to step down (as hinted by his decision to skip out on the Jackson Hole meeting) he’s not going to want to leave with the Fed going at QE 3 and QE 4 full throttle.


Instead his best bet would be to take his foot off the gas a little bit, giving his replacement a little room to maneuver if things get ugly.


And now onto item three, Bernanke’s dreaded “sharp move” for assets.


This is simply a guarded admission that stocks are in a bubble.


I want to draw your attention to the following:


  1. Margin debt levels (money borrowed to buy stocks) are at record highs.


  1. The S&P 500 has been in rally mode for 90 days without a single 3+day pullback (this is an all-time record… the second closest record is just 38 days of buying with no significant pullbacks in 1987).


  1. Tobin’s Q ratio (the single best predictor of major 20%+ corrections in the market) is registering readings similar to those that occurred during the bubbles of 2000 and 2008.


This confluence of indicators tells us point blank that stocks are in a bubble. If I know this, I can assure you that Ben Bernanke and the Fed know it. And this is why the Fed is in deep trouble.


For more market insights and investment ideas regarding the potential for a market correction, visit us at:




Best Regards,

Graham Summers



Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
mendigo's picture

If I recall correctly, prior to the reelection bernanke was warning that the fed could not resolve the economic problems on its own - the the government needed to take action as well.
And at one point boner was railing against the feds inflationary policies.
I am wondering, what happened?

ebworthen's picture

Bernanke will stay in, or he will do an Alan Greenspan and make muttering appearences blessing QE and further debt.

d edwards's picture

He will GO! All these wizards of manipulation always leave before the shit hits the fan so they don't get any on themselves!

lolmao500's picture

Who cares. When this whole scam goes kaboom, Bernanke will be hunted down like the mad dog he is and be put down like one.

mrdenis's picture

Most likely not ...I do believe he should be .but most  Americans have been taught (through public education) to be true  existentialist  ,to accecpt our doomed fate because nothing we do will can change it .... 

Money 4 Nothing's picture

Fade into obscurity the day of the crash... whistling down the sidewalk without security detail  franticly pressing the unlock button of a tightly clutched Mercedes key fob looking and listening for a report or any indication the get away car that was supposedly placed for him along the East curb of the 200 block of West Street promised by Jamie Dimon.

The blond wig is becomming unmanageable as sweat begins to matt the altered identity aid to his eye lashes and the taste of hairspray causes even more panic as the harsh memories of a drunken off the reservation night in Spain turned a night of lap dances and dope indulgence into a night shame and embarrasment for accidently steering 3 mid level employees and 2 newly made partners into a transexual night club for a couple romps in the VIP room. Shit went badley and thats the way he wants it to remain.

Okay, back to the Bernank in a fucking spot, Still clicking the remote for what seems an eternity with no results yet. Fucking Dimon! Prick bastard! This fucking car better be here because the freakish way I look, I will get hit on all the way home so public transportation is out of the question... SHIT!!!

His asscheeks are squeeking from the ammont of perspiration runnibg downbhis fat back regretting this, the day of all days I don't wear my Manpon! Double shit! calfs feeling the lactose effect of a forced trudge down a street with 75 fucking Mercedes on the Godamn.. I mean Goldman God forsaken complex.. desparation has turned to a cotton mouth as failure begins to set in thinking he may havevto c4oss the street and check that curbside... Fuck Jamie! I never liked that pompus prick from day 1! Thinks hevownes the fucking world or something! Schkuck half breed... 

From seemingly out of nowhere he hears a horn report! Oh fuck yea! Here we go... where are you.. coooome on.. GOT IT!! approaching the drivers door of a brand new black on black 2013 Mercedes CLA 45 AMG chromed out package sittin on 36 spoke dubb rims lookin fucking BOSS! Then reconsiders the ride for a sec and thinks out loud.. Don't tell me this belongs to Jamie!! God Damn it! Fuckers going to frame me for auto theft all because I fucked him pretty good back in 2009... Shit.. Ben Shlome walks towards the back of the car.. he gets a look at what state licence plate is advertised.. thinking a vanity plate would help clue me in on the owner.. thinking to himself.. if it says kikehalfbreed.. I'll know it's his ride..... hmmm.. NY tag.. okay.. reads the vanity plate...  What the... fuuuck! Who the FUCK gets a vanity plate that says..  1JEWCANOE.....!! Fucking respectable banker huh? Turns towards the drivers door and hears a drunkin exclamation... comes from the driverside rear smoked out window. !! Hey baby! Wanna take a ride with Wall Streets heavey ... belch... heavy hitters!?!?!? With a slicked up bald dome from sweating like a pig..Bernank pulls the matted wig hair away from his stickey eyes once again and asks.. with apprehension.. LLoyd? Lloyd!! What the fuck? Oh shit! It's The Bernank! Greenspawn! You deaf mother fucker! Open the door for the Bernwnk! My arms are too short and don't reach! Hurry.. door opens with the scent of brand new green tree airfresheners, leather and a funny plastic burning smell... not concerend removing the irritating soaked and wet blonde prop wig with relief.. sets down in the drivers seat.. looks over to his right.. Jamie is laughing sooo hard he cant even speak... Thanks for the hook up JD.. Good look about the ride out of here too!  Real solid bro.. you know, I would do the same for you.. Jamies laughing goes unabated..

Lloyd is in the back with Rodge with his tie fixed around his head yelling unintelligible gasped words and phrases at each other trying to regail a story he made up to the SEC just yesterday over the phone blah.. blahh what the fuck ever Lloyd.  damn!  he's fucking stoned!

Jamie...Still in posession of a brown cigar in his left hand smoldering embers dripping on the seat with a slit cut down it longways? Quite curious..?  shit that smells like a burning sandwich bag..

Turns the key to this fabulous luxury car rooted in ego and self endulgence which everyone in the car can fucking dig! Looks in the rearview and sees a familiar face.. Oh snap!! He exclaimes with delight.. Rajaratnam!! Fuck...dude! When they let you out!?! 

Rodger replies..  You could have pulled some fuciing strings for a Hindi banker you cock smoker! 

Bernank begins to pull out into traffic.. looking the wrong way.. as usual.. damn near bounces Bloomburg off the left fender with a stricken terror look on his face repeating.. open the door Lloyd! You little prick! You said get down here right away ....!  Looking behind Bloomburg..they all see a crowd of atleast 30 yelling pissed off New Yorkers in tow..

Bernank tosses the blonde wig out the window over the hood to Bloomburg and says.. put that on! They won't recognise you!

Bloomburg still trying to talk lloyd into opening the door again.. lloyd says.. Fuck you Bloomburg! Car is full anyway donning that rediculous looking tie on his head says.. your not a banker anyway cockbite! your just a wanna be control freak!  lloyd accuses Dimon for pre arranging the pissed off crowd ready to beat Bloomburg to a pulp.. you iverheard my conversation with Bloomburg?  Jamie still choking from the last toke... confesses.. Yea! I did! I front ran your call and had an angry mob tipped off that Bloomburg was meeting someone here alone! Hell lloyd!! You were just prankin him for a giggle!! I was trying to get him beat down!!! Car erupts in criminal psychpathic laughter..

Ben Shalom.. step on it and blow this popsicle stand.... Dubai HERE WE COME!!!


Tune in again for more shorts on ADVENTURES IN CONQUORING  CAPATALISM!!!


TheReplacement's picture

What a farce.  He's clearly going to have a brunette wig and not a blonde.  Sheesh.

-85 Billion a month until you fix it.

otto skorzeny's picture

Funny shit right there-kind of like if Hunter S Thompson(RIP) did an updated "Bonfire of the Vanities". Throw in a dead Aryan-looking coke whore and you're onto something.

WTFUD's picture

Before Bernanke resigns him and little Timmy G MUST have ankle bracelets attached to monitor their whereabouts. If /WHEN the SHTF then they must stand trial, name names and be held accountable.
Like the FBI guys who mysteriously jumped out of a helicopter soon after 'false flag' boston the same justice should be handed out.
Am i being too kind? probably! call me sentimental, shucks.

cynicalskeptic's picture

Ankle bracelets are too easy to get out of....

You want REAL incentives?  Implanted electrodes that give increasing shocks for every 100 points the Dow drops....... or every decrease in the value oif the $US or increase in unemployment 

How about trying that for every Fed. Treasury and financial industry exec?

TheReplacement's picture

How about the Islamic approach?  Amputation for theft.

Herdee's picture

Sooner or later the stock market (the spoiled little darling)will have to operate by itself.Bernanke has bought time basically.Time is a major component of an Option.He knows the biggest problem with the strategy is that the longer he waits the greater the pain will be.There hasn't really been that much cooperation from politicians either on endless trillion dollar deficits,so is he also signalling the Market that he is now prepared to force the hands of the politicians to control spending?If he doesn't do it,he knows that eventually the Market will do it for him.How much time does he have?Well,according to other Fed Members,they're signalling the bubble danger signal.I don't believe that there is any hope of political progress to change in order to get rid of deficits so I think that you have to look a little deeper into the signals because the politicians still don't get it.As well,past mistakes of  the Fed feeding too much liquidity into the banks with few controls has helped fuel the bubble.He told Washington that the Feds help isn't infinite.So,I think he's saying "so long suckers,now you deal with it."

Fredo Corleone's picture

Larry Summers, Bernanke's likely successor, is consigliere to the world central banking elite.

Bernanke could resign tomorrow; it matters not. Status quo must -- and shall -- be maintained.

El Hosel's picture

If Larry Summers replaces Bernanke, its only fair that the "Honorable" Jon Corzine replaces Obama. "New Normal" Bitchez.

FishHockers's picture

Send him to Gosnell

kchrisc's picture

This treasonous thieving piece of shit is already making plans for "exit stage left."

The real question is whether he can out run the guillotine.


SuperRay's picture

Jokes aside, he looks like shit.  Totally stressed.  Maybe he still has a shred of a conscious and realizes he's fucked things up beyond all recognition, or maybe it's just that his ego has been smashed into a billion pieces by the realization that he's gonna go down in whatever history may remain as the prime perpetrator of the collapse of the word economy.  He's gonna need alot of medical attention after he steps down.  Hope he has a good plan...

Chuck Walla's picture

Maybe he still has a shred of a conscious 

If he had a shred of conscience or decency or integrity, he never would have gotten the job. Weasels rule.


sodbuster's picture

Maybe he still has a shred of a conscious................if he did, he would have given his 12 gauge a blowjob, and exited like he should.

bank guy in Brussels's picture

Though I think what stresses these people out above all, is not so much their catastrophic failures

But the hell of experiencing that despite their supposedly-high positions, they are total slaves of their real bosses, the American ruling oligarch families

Some of them can get semi-adjusted to this, but some of them really begin to crack apart and look like hell, as they wish they never signed up to be the front-men for the luciferians

It is too late, they are on the inside of the devil's mafia ... but they wish they had made a different decision about life, long long ago

auric1234's picture

On the upside, so far he's been better central banker than Rudolf Havenstein.


BidnessMan's picture

Rudy did fine until 1921. It was 1922-1923 that things did not go so well.

AT's picture

Graham Summers is such a moron.

SuccorMoney's picture

Before, of course.  He learned that much from Greenspan.  If he's smart, he'll even get a book published before it hits the fan.

Heroic Couplet's picture

"Sell in May and go away." has long been a chant on Wall Street. Yesterday was 31May and some could be taking profits.

People who've lost jobs to offshoring don't give a crap if Wall Street does collapse. It means people connected to Wall Street go unemployed? Good. Overall, a country like the US that prints its own money isn't going "boogeyman."

spinone's picture

August 7th says Martin Armstong. 

HulkHogan's picture

So how does he say one can protect themselves? He hates cash, bonds, stocks, and gold.

monkeyboy's picture

buy a vineyard/winery.

invest in argentina

might have to subscribe to his newsletter...some great tips....